More than 300,000 Massachusetts workers who lost jobs during the pandemic are about to cash their last unemployment checks this week, but experts are not expecting the end of pandemic-related jobless benefits to solve the state’s labor shortage.
In more than 20 states that stopped pandemic unemployment assistance in June, there was only a small increase in new hiring, according to research conducted by Arin Dube, an economist at UMass-Amherst.
“We should expect a relatively small share of those 300,000 individuals losing unemployment benefits to find a job in the next couple of months,” Dube told GBH News. “That could both hurt the pocketbooks of these families and also feed back into lower spending and possibly lower job creation in the economy.”
Dube’s study also documented a drop in spending in those states where people suddenly lost significant income and then didn’t get comparable jobs to replace it.
A leading trade group, Associated Industries of Massachusetts, is also not expecting to see a surge in hiring with the expiration of pandemic unemployment benefits.
“The persistent labor shortages that we're seeing are complex,” said Christopher Geehern, executive vice president at Associated Industries of Massachusetts. “Benefits are probably some part of it. But there are also issues with people not having access to child care ... and people concerned about safety.”
Advocates are scrambling to connect hundreds of thousands of people losing unemployment checks with other aid such as food benefits, cash assistance and subsidies for rent and mortgages. Many organizations are also directing people to job retraining, but that won’t be a quick fix, said Sharon Scott-Chandler, chief operating officer at Action for Boston Community Development.
“You do a six-week or a three-month program: It takes some time to get somebody skilled, or even some minimal skills, to get them into jobs,” said Scott-Chandler.
She added that the end of pandemic jobless aid comes on the heels of an expiring moratorium on evictions — and in the middle of rising COVID-19 cases fueled by the delta variant.
These events have all hit cities and people of color much harder, advocates said. Unemployment rates in Massachusetts are 7% for whites but 11.8% for Hispanics and 9.8% for Blacks.
Victoria Negus at Massachusetts Law Reform Institute estimated that 175,000 people losing their unemployment benefits this week had been self-employed or worked in service jobs.
“The service industry, this gig economy, we know, historically has employed a lot of Black and brown workers across the state,” she said.
