When the COVID-19 pandemic hit in March 2020, it quickly became clear that people would need assistance as countless jobs were cut back or eliminated. In those early days of the outbreak, it was the correct policy to help people who lost their livelihoods through no fault of their own. When the government ordered businesses to close, it was necessary to provide a lifeline to those owners and employees who were left with no options. But as the pandemic has greatly eased with the widespread availability of vaccines and declining infection numbers, businesses are roaring back to life with the prospect for one of the biggest economic summers on record for Cape Cod. That has resulted in a desperate need for labor, even beyond the normal challenges all Cape Cod businesses have during their peak hiring season. Unfortunately, the ongoing policies that include federal wage subsidies of $300/week and a state unemployment compensation package that is one of the most generous in the nation have created an unprecedented disincentive to work in Massachusetts.
At a time when Cape Cod businesses are ready to rebound from the most devastating economic hit in their history, they now face an equally ominous future as it has become nearly impossible to staff their companies with the labor needed to operate and serve the upcoming summer demand. There is no debate that the current federal and state unemployment/pandemic relief plans are the number one reason businesses are unable to hire. Prospective employees have told many employers that they have no incentive to return to work and can “earn” more money staying on unemployment. The main competitor in securing critical labor for Cape Cod businesses has become the state and federal government – not other restaurants, hotels, and retailers, etc. Consider this: According to Forbes Magazine’s online stimulus calculator, the average weekly unemployment benefit in Massachusetts is $471. Combine that with the extra $300 a week being paid through September and the average weekly wage for a person collecting all available benefits is $771 per week, or $3,084 a month. That translates into $19.27 per hour.
The state and federal governments are arguably paying some people nearly $20 an hour not to work, when there are thousands of jobs going unfilled. As additional evidence of what has become a disincentive for people to work, consider the current unemployment rates. According to numbers released by the Massachusetts Executive Office of Labor and Workforce Development, the Cape & Islands region unemployment rate was 6.6 percent in May, higher than the state average of 6.1 percent. And the Cape Cod rate was tied with Bristol County for the fifth highest jobless rate in the state. The disconnect is clear. Barnstable County still has a comparatively high unemployment rate, but employers still report a record number of job vacancies they are unable to fill.
While other factors are in play when it comes to the Cape’s labor crisis, such as a need for housing, the undeniable main factor is the amount of stimulus money people continue to be paid. People who already live on Cape Cod and don’t need seasonal housing are staying out of the workforce. In the early days of the pandemic, assistance from the government was a life-saving necessity that allowed families to keep food on the table. In the summer of 2021, that amount of “free money” being handed out has created one of the biggest disincentives to work modern society has ever seen. It’s time for the government to stop creating an environment where there is no reason to return to work.
Matt Pitta is Director of Communication for The Davenport Companies, a fourth-generation, family-owned business that employs more than 1,300 people at more than a dozen companies throughout New England, including commercial and residential real estate, assisted living, construction, a variety of service businesses and six resort hotels.