Charlotte-Area Businesses And Workers Prepare For Expiration Of Unemployment Assistance
On Labor Day, federal pandemic-related unemployment benefits expire. They include three programs established in March of 2020 as part of the CARES Act. For more on the programs and what they're ending might mean for unemployed workers and Charlotte's economy, WFAE's "Morning Edition" host Marshall Terry talks to Bruce Clarke of Catapult, a group that works with employers across the state. He joins as part of our series Rebuilding Charlotte.
Marshall Terry: Welcome to the program.
Bruce Clarke: Thank you, Marshall. Good to be with you.
Terry: There are a lot of letters involved when we talk about these programs. So let's go through each of them, if you will, starting with the Pandemic Unemployment Assistance Program. That's PUA. What is that, exactly?
Clarke: Yeah, it's a really unique program that allowed freelancers, contract workers -- you think of them as 1099 workers, people that don't have an "employer," so to speak — to file for and collect unemployment. Normally they do not receive, are not eligible for unemployment because nobody's paying unemployment taxes into the system on their behalf. So, a very unique program.
Terry: Let's move on to another one of the programs. The next one is the Pandemic Emergency Unemployment Compensation program, or PEUC. Now, that extended how long people received unemployment, right?
Clarke: It did. It did extend how long people receive unemployment because it really varies by state. Some states, North Carolina is one, are typically around 12 weeks of normal unemployment based on the unemployment rate at the time. Some states default to about 26 weeks. So this extended the state benefit for 26 weeks, and in some cases longer than that.
Terry: Now, at the end of this particular program, some states are offering an extended period of benefits. Is North Carolina one of the states that's doing that?
Clarke: No, North Carolina is not going beyond where we are today.
Terry: And I want to move on to the final program that we're talking about here. That is the Federal Pandemic Unemployment Compensation program, or FPUC. Now that was the extra $300 that some states like South Carolina cut off early, right?
Clarke: Yes, that's true. And it began in its early life in March of 2020 at $600 per week, and then it morphed into $300 a week when that program ended and was extended at the lower level.
Terry: Is North Carolina providing any additional benefits to help unemployed workers who will no longer receive any of this assistance?
Clarke: North Carolina has not yet chosen to use, in particular, any of the other federal pandemic funds for this purpose. The state could choose to do that, but so far has not chosen to do that.
Terry: Well, with these programs ending, what impact do you see on the local economy?
"Employers lost some of the ability to dictate the terms — to dictate the where, the when, the how, the how much, the what — of the job."
Clarke: Well, I think more people will return to work, no question about that. I think that, however — I saw a columnist use this phrase and I really appreciated this phrase, he said that people do not want to return to their old jobs on the old terms. And so terms are changing at work. Employers lost some of the ability to dictate the terms — to dictate the where, the when, the how, the how much, the what — of the job. Not entirely, but they lost some ability to dictate that. And it's going to take a while for this transition to occur.
Terry: Are employers becoming more flexible? Becoming more malleable about what they do allow their workers to do now?
Clarke: Of course they are, if they can. We have one member company that really stands out in my mind. They are a manufacturer and they have now 12 different, distinct work shifts. And let that settle in: a manufacturer with 12 shifts. And they really had to do that in order to match up to the available work pool. Those that, for instance, can only work three days a week or only on the weekend. You know, they're having to be malleable and in some cases finding it's not as difficult as they once thought. You know, everything becomes easier when you do it repeatedly. But there's a lot of creativity that's required.
Terry: How concerned are employers about the labor shortage as we head into the fall?
Clarke: Oh, very concerned. Very concerned, Marshall. I don't know if you have been like me when you walk down a city street and how often do you see a sign that says, "Be patient. We're understaffed." They're very concerned. They can't do the volume they were doing before, but they still have the rent in most cases that they had before. Their cost of materials and food and goods and labor is increasing. Can they raise their prices?
Of course, they're all concerned. And this is not just hospitality and not just retail. This is in every part of the economy that we're having this availability of labor and the escalation of price squeeze.
Terry: What are you hearing as far as the sense of when things will return to normal? And I am doing the air quotes right now because what does "normal" look like? But you understand what I'm saying. What's the sense that you're getting from the businesses that you work with?
Clarke: I think people have stopped predicting. I think there was a prediction earlier this year as COVID seemed to be subsiding under the pressure of the vaccines. But I believe people have stopped predicting. I hear people talk about six months, a year-and-a-half, three years. And I just don't have a good prediction, and I haven't heard one yet.
Terry: What advice do you have for someone who is losing these benefits?
"People are not a spigot. People are not a reservoir of water that you could turn a valve and they began to flow. It's just not going to be that quick or that black and white."
Clarke: What's happened really, Marshall, I think, is that the $600 and then the $300 really didn't create mass laziness. I don't buy into that theory. I think it just made a wide range of alternative decisions possible. Somebody could say, hey, I'm afraid of the virus. I don't like the mandate. I need to move to be closer to family to get child care with family. I enjoy no commute. My family has learned we can live on less because we have less expense, as well — like child care. I'm going to school now with some of these unemployment incentives to go back to school.
All these sorts of reasons, the $600 and $300 made it more possible to choose those alternative paths. So it's going to take some time for people to unwind some of those behaviors and some of those patterns that they've created now that the $300 is ending. People are not a spigot. People are not a reservoir of water that you could turn a valve and they began to flow. It's just not going to be that quick or that black and white.
Terry: All right. Thank you for joining us.
Clarke: Thank you. It's great to be with you.
Terry: That's Bruce Clarke of Catapult, a group that works with employers across North Carolina.
This conversation was produced as part of our series Rebuilding Charlotte, WFAE's look at how life has changed and the challenges ahead because of the pandemic.