(The Center Square) – A federal program that provided an additional $300 weekly to people who received unemployment benefits came to an end over the weekend in Virginia and every other state that had been providing the benefits.
The federal government initially introduced the extra money amid soaring unemployment numbers caused by state restrictions to reduce COVID-19 spread, which limited working opportunities. Because most restrictions have come to an end, some members of the business community have reported difficulty finding workers when some people have chosen to collect the higher unemployment benefits instead.
Per an order from President Joe Biden, the extra benefits ended this weekend. Some states had stopped providing the benefits early as a means to incentivize people to work, rather than stay home.
The change will likely be a benefit for businesses, but it will not solve all of the staffing shortage issues, according to Robert Melvin, the director of government affairs at the Virginia Restaurant, Lodging & Travel Association.
Melvin told The Center Square that staffing shortages have been a multifaceted issue and pandemic unemployment benefits have only been one factor. He said the change could be helpful to some restaurants, hotels and campgrounds who have been struggling to find workers, but that the data he has seen does not suggest it will help that much.
Even without the extra benefits, Melvin said the state needs to do more to reintroduce people into the workforce, such as funding workforce development programs. He said state-funded programs could help get potential workers trained or getting them certifications to enter industries that have been hurt the worst by the pandemic would be beneficial.
As the delta variant continues to spread, Melvin said businesses have sponsored less travel, which has damaged the lodging industry. He said government mandates have not really been getting in the way at this point, but that the state could provide the industry with additional relief.
When the General Assembly allocated its money from the American Rescue Plan in August, lawmakers earmarked $353 million to help small businesses. They provided $250 million for the Rebuild VA economic recovery fund, which provides grants to businesses economically hurt by the COVID-19 pandemic. They also included $50 million for travel and hospitality and $53 million for the Industrial Revitalization Fund and the Virginia Main Street program.
Lawmakers provided $862 million for the Unemployment Insurance Trust Fund to prevent an immediate tax hike on businesses, which would have kicked in to replenish the fund. More funding might be necessary to prevent a future tax hike.