State Policies Made Labor Shortage Worse

Senator Brad Farrin delivers this week’s Senate Republican radio address

Hello, I’m State Senator Brad Farrin.

After essentially losing an entire year of revenue in 2020 due to the absence of tourist visitors to our state, Maine’s restaurants and hotels had an opportunity to start rebounding this summer as the number of visitors returned to pre-pandemic levels.

However, while the tourists and their money came to see our beautiful state, our hospitality industry suffered another setback—the lack of a sufficient number of employees to capitalize on this restored demand.

Reports abound across the state of businesses that have reduced hours or closed entirely—some permanently—due to an inability to hire staff.

Rather than finding ways to alleviate this problem, policies from our state government have only worsened them. Back in mid-June for example, New Hampshire joined 25 other states in rejecting the $300 weekly federal bonus for unemployment claims.

Since then, the number of continued claims there has dropped by 28%. Maine, which did not reject the federal bonus, saw a drop of just 7.8% in claims.

Today, New Hampshire has the third lowest unemployment rate in the nation.

Back in 2018, Maine was still riding a wave of record low unemployment that had lasted a record-long period of time.

At its peak in 2016, Maine’s annual average rate was ranked 11th among states. During the pandemic, Maine fell to 23rd in the nation and remained there through June of this year.

Instead of dropping the bonus that rewards people for not working during a statewide labor shortage, Maine announced the “Back to Work” plan which pays a $1,500 bonus to those who leave unemployment and hold a job for eight weeks.

The problem is, by staying on unemployment, that same person can earn an extra $2,400 in federal bonuses over that same time period.

This week the Department of Labor reported that “more than 400” claimants were “provisionally eligible” for this program, which had been scheduled to end on August 6. This represents a mere 1% of the claimants in all of the various state and federally funded unemployment programs.

While 400 claimants took advantage of the program to return to work over the past six weeks, more than 1,000 Mainers filed new unemployment claims just last week.

Taxing people who work in order to pay people who do not is not an effective, long-term government policy.

Failed state policies have limited the recovery of businesses and their employees who had all that they needed to return to prosperity this summer until the government stepped in.

Again, I am State Senator Brad Farrin representing District 3. I hope you and your family have a safe and enjoyable weekend!

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