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Economist says expiration of federal unemployment won't be 'miracle cure'

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Posted at 10:51 AM, Sep 07, 2021
and last updated 2021-09-07 10:51:14-04

VIRGINIA BEACH, Va. - A local economist predicts federal extended unemployment benefits won't solve all the challenges business are facing in hiring enough staff.

"The end of expanded unemployment benefits is not going to be the miracle cure for employers that can't find employees," said Dr. Bob McNab, an economist at Old Dominion University.

Over the weekend, federal unemployment benefits expired in Virginia, meaning people will no longer be eligible for an additional $300 per week from the federal government. They can still claim state unemployment benefits.

McNab says a significant number of people have left the workforce altogether because they decided to retire early, are taking care of a loved one or remain worried about the pandemic, among other reasons.

He says states that ended the federal benefits already saw lower job growth than those that kept them in place.

Still, with kids going back to school full time in the fall, more parents could be ready to return to work.

"After Labor Day, the incentives to return to work have increased," said McNab. "That means parents who are taking care of kids and people who are collecting unemployment benefits now have a greater incentive to get back to work rather than to stay on the sidelines."

At the Oceanfront, staffing has remained a challenge all summer.

"We're getting applicants, but it's hard to find people who really want to come to work," said John Uhrin, the general manager of the Schooner Inn. "Everybody has to show up and work a little bit harder to fill those voids."

Uhrin is hopeful the federal benefits expiring will help him find more employees as he's expecting a busy fall season.

"I would think it would have to help. That's been the biggest issue for us. We've been trying to compete against the federal government and private sector and just can't do it."

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