U.S. Rep. Josh Gottheimer is asking the Murphy administration to consider $500 payments to residents as a means to alleviate the months-long labor shortage which threatens to stall the COVID-19 economic recovery.
Under the proposal, the state would use the funds from its $6.2 billion of federal relief from the Biden administration to give bonuses to workers to re-enter the workforce.
Business owners have lamented an inability to hire enough workers as COVID-19 restrictions are lifted, thereby holding back their ability to fully reopen.
Job gains have stalled in New Jersey since the spring, according to the state Department of Labor and Workforce Development, and many businesses have limited operations. Gottheimer said that Empress Diner, where his press event was held on June 14, would typically stay open 24/7, but limited its operations to just 12 hours.
Restaurants and bars, hotels and retail have been among the hardest hit, and many businesses on the Jersey Shore worry that the labor shortage could pummel their operations and profits this summer.
“You come back to work by Aug. 1, we give you a $500 back-to-work incentive to stay on the job at least through Sept. 1,” said Gottheimer, a Democrat representing the state’s 5th Congressional District.
Gov. Phil Murphy, when asked about it at his regular COVID-19 press briefing the same day, did not specifically endorse that or any proposal on how to use those funds.
“It’s a good idea, but it’s too early to [sic], again we want to make sure we get this right, we spend that money responsibly, we have the ability to spend it over a period of years,” Murphy said. “Just want to make sure we get a good budget and that we get the federal money in a really good place.”
His administration and Democratic lawmakers have been largely mute on what specifically the federal funds would be used for, beyond broad goals for the money. The state is looking at a $10 billion surplus, and those funds have not been formally committed. Murphy has until June 30 to sign a spending plan for the next year.
Broadly speaking, the money can be used to pay for a state’s COVID-19 response and recovery and to offset lost tax revenue. Gottheimer said that a $500 bonus would fall within the guidelines for how states can use the money.
Coming up short
The exact cause of the labor shortage is up for debate. Business groups and conservative lawmakers contend that the shortage is caused by the $300 per week in federal supplemental unemployment relief, which critics contend allows people to stay home rather than return to work.
Labor rights organizations contend that unsafe working conditions both before and during the COVID-19 pandemic, as well as subpar pay, are keeping people home.
Murphy and his administration have resisted the notion that the shortages are solely the result of the $300, and calls for discontinuing the federal supplement as has been done in many Republican states.
“I think it’s a product of a number of different reasons. Some folks point to the $300 temporary unemployment benefit. Feels like that may be part of it. Others would point to … lack of consistent ability to get childcare, or the fact that we’re still in the school year” with some amount of remote learning the governor said on June 14.
Lawmakers are proposing a series of tax credits to help businesses absorb some of the costs with hiring, including wage increases that might need to be offered in order to hire back the workforce.