UC Bonuses Scrutinized as Workforce Shortage Continues

Edited from the PA Chamber of Business & Industry

A national workforce shortage is having a negative impact on businesses struggling to recover in the wake of the COVID-19 pandemic.  With unemployment rates higher than pre-pandemic levels, several states are choosing to withdraw from a federal unemployment compensation benefit enhancement program in order to incentivize more individuals to return to the workforce.  Notably, last week, Louisiana became the first state with a Democrat governor to pull back from the federal program.

In a statement, PA Chamber President and CEO Gene Barr called the current workforce shortage a “crisis” for the business community and urged Pennsylvania to scale back its participation in the federal benefit enhancement program.

“As evidenced by Louisiana’s recent decision to withdraw from the federal program, this isn’t a partisan issue,” Barr said.  “It’s simple math.  The private sector cannot compete against federal benefit enhancements that are in many cases paying individuals more than what they made in wages.”

A recent U.S. Chamber survey found a significant number of respondents – more than half – are not in a hurry to return to work and 16 percent say the money they are receiving from unemployment benefits and other government programs makes it ‘not worth looking for work.’

House Bill 508 would phase out Pennsylvania’s participation in the federal unemployment compensation enhancements and implement a Back-to-Work Bonus Program to incentivize individuals to return to work. The bill has passed out of committee and is currently awaiting consideration by the full House. While the PA Chamber is supporting the legislation, the Board of The Columbia Montour Chamber is opposing back-to-work bonuses as inappropriate and unnecessary.