Experts Say Other Factors Are Causing Hiring Woes Not Unemployment Benefits

Fran Hunter owns a neighborhood bar and grill called Hunter’s Place on Main Street in Elkhart. She said she’s had a “Now Hiring” sign up for weeks. In that time, she’s only had one person apply.

“I’ve been here 37 years and I’ve never ever had a problem hiring help,” Hunter said. “But this has been really, really hard. I’m not getting applicants, I’m not getting anybody.”

Her theory why there’s no applicants? Government programs designed to get people through the pandemic.

After businesses complained they can’t find enough people to keep their doors open Indiana is set to become the latest state to bring back a requirement that unemployed workers will have to actively search for jobs to get benefits.

“Unemployment has been extended again, stimulus money again – you know, if you’ve got a couple of kids you’re really getting a lot of stimulus money,” Hunter said. “It’s good for them, but it’s bad for me.”

Hunter’s assumption is a common refrain from business owners, the reality is more complicated.

Micah Pollak, a professor of economics at Indiana University Northwest, said plenty of studies have shown that unemployment benefits are not, by and large, keeping people from taking jobs. Instead it boils down to wages.

“I think it’s kind of like a cop-out for business owners to say that because it puts all the blame on the workers and then they don’t take any responsibility for what’s happening,” Pollak said. “I mean, if a couple hundred dollars a week is enough to convince a worker not to work for you, then I think you need to question what kind of work environment and pay are you offering.”

Pollak said the hiring problems are simply more visible in the restaurant industry where servers often rely on tips to make ends meet and now are on the frontlines of dealing with the public during a public health crisis. 

But the pandemic isn’t just affecting restaurants – it’s affecting other, mostly in-person jobs, too. 

“Right now more are staying home, taking care of kids, taking care of family members, don’t want to go back to work, that’s people you can’t hire and bring into work,” Pollak said.

Crystal Nieves’s family in southern Indiana is a perfect example of that. Their child care fell through in the pandemic and, thanks to unemployment benefits, her husband can stay home to help with the kids. Case in point – the only time she could talk was while heading to pick up a child from school. 

"Sometimes I’m like you have to go get a job," she said. "But then whenever I’m looking at the reality of things and how things would add up, I’m like 'OK I guess you need to stay home a little bit longer.'"

Nieves is still working full-time, training new hires at poultry plant. So she knows first hand her company is severely understaffed and desperate to hire workers. But until they find affordable child care, her husband is better positioned at home.

“I can see the people need to go back to work, but then I can see the other side which is: it’s not that simple,” Nieves said.

Nieves is conflicted. But she said it boils down to needing some predictability – that’s the underlying factor economists say has caused all sorts of economic woes during the pandemic.

“So there’s so many variables that it’s truly a day-by-day, week-by-week, moment-by-moment [question of] what are we doing,” she said. 

But not everyone feels as conflicted as Nieves. 

One Hoosier who worked at an automotive plant said the boost to benefits gave him financial stability for the first time in his life, and it freed him from a job where he didn’t feel valued. We agreed not to use his name out of his fear he could lose unemployment benefits for not looking for work. 

“For me, it doesn’t bother me at all,” he said. “I feel like my labor has been exploited enough throughout my life, I don’t mind taking a little bit back.” 

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He hopes this moment, where workers are in high demand and short supply, could wake people up to labor issues he’s noticed for some time. Issues like better wages and benefits and, simply, just more respect. 

“Fellow workers in this country, we can rally together to get better conditions for everybody,” he said. “I think everybody can agree that workers deserve more of the pie.”

But before that happens, federal unemployment programs for Hoosiers may get cut off earlier than expected. Gov. Eric Holcomb is asking the Department of Workforce Development to do some research that’ll help him decide if Indiana should follow other conservative states in opting out.

Contact reporter Justin at jhicks@wvpe.org or follow him on Twitter at @Hicks_JustinM.