Business

Texas Ended Some Unemployment Benefits So People Would Look For Jobs. Workers Say It’s Not That Simple

Critics say the benefits are a disincentive for people to return to work, but there are likely other issues at play.

A customer wears a mask and looks at their cell phone as they carry their order past a now hiring sign at an eatery in Richardson, Texas, Wednesday, Sept. 2, 2020. The U.S. unemployment rate fell sharply in August to 8.4% from 10.2% even as hiring slowed in August as employers added the fewest jobs since the pandemic began.

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Unemployed workers in Texas are no longer eligible for an extra $300 per week from the federal government and other pandemic unemployment benefits, after Gov. Greg Abbott officially opted out of the federal program Saturday.

With employers having a hard time finding workers — even as the availability of COVID-19 vaccines is helping people return to the workplace safely — Abbott said the move was meant to spur people to look for jobs. It was supported by the Texas Association of Business, whose members said the benefits are a barrier to hiring.

The program, among other things, provided an extra $300 per week in state unemployment benefits. But critics of the program have said that those benefits are a disincentive to return to work.

“It's the philosophy that you want to get people back to work and if there's extra compensation, which is what this money is – it's above and beyond what unemployment insurance is – that you get in a situation where it could become an incentive to not seek work when it's available,” said Steve Werner, chair of the Department of Management and Leadership at the University of Houston's Bauer College of Business.

But while there are more open jobs than unemployed workers right now nationwide, the trend is likely more complicated, according to Werner. Some people may be staying out of the workforce because they’re changing industries or want to continue working remotely but are not being accommodated by their employers.

At Tex-Mex restaurant El Arroyo in Austin – best known for its daily changing humorous signs – company President Ellis Winstanley agrees that the issue is more complex.

“People have got little kids, they've got child care issues,” he said. “And people have got medical concerns. They want to see that a significant portion of the population is vaccinated before they go back.”

El Arroyo made it through the worst of the pandemic without layoffs and even raised employees' salaries to above minimum wage to make up for the loss in tips, Winstanley said.

For his business, finding employees hasn't been that big of an issue, other than a period in the spring.

“People were going back to consume in restaurants faster than people could be hired and trained,” he said. “But it's pretty much leveled out now.”

Just 49% of Texans 12 and older are vaccinated, a number far off from where most health experts agree is needed to control the spread of the virus. But the widespread availability of the vaccine has nonetheless brought confidence to business owners who have struggled to stay open during a pandemic-related recession that caused near-record unemployment and the loss of millions of jobs.

Texas unemployment has steadily dropped to 6.5% in May, according to the U.S. Bureau of Labor Statistics.

But not everyone has been able to find work. In Houston, Mark Grady, a stage electrician for the Houston Grand Opera, has essentially been out of a job and relied on unemployment benefits since March 2020.

When Abbott pulled Texas out of the federal relief benefits, that also removed state benefits for some who lost their jobs due to the pandemic, including those who were contractors or self-employed.

“The unemployment going away at this time for us, it's brutal,” Grady said. “It's right when we needed it.”

July and August are the performing arts industry's slowest months in Houston, Grady said, and while work is expected to come back strong in the fall, there are almost no jobs for Houston stage workers this summer.

And, he said, it's not as easy as just working a low-skilled job in the meantime.

“Our employers are trying to get us as much as we can, but it's sporadic work,” Grady said. “If we go take a restaurant job and my primary employer calls me and says I need you to come in tomorrow, do I quit the other job?”

With the state unemployment and the additional $300 a week, Grady said he was making about 80% of his previous income. Now he's worried he will have close to nothing.

He said he’s doing what he can to find work for the summer — even traveling to other cities — to pay his bills.

“Just trying to figure out how we're going to get by for the next two months,” he said. “That's really what it is for us.”

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Florian Martin

Florian Martin

Business Reporter

Florian Martin is currently the News 88.7 business reporter. Florian’s stories can frequently be heard on other public radio stations throughout Texas and on NPR nationwide. Some of them have earned him awards from Texas AP Broadcasters, the Houston Press Club, National Association of Real Estate Editors, and Public Radio...

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