PROVIDENCE — Rhode Island is preparing to bring back the requirement that you have to look for work and be available and able to do it while you’re collecting unemployment.
Acting Department of Labor and Training Director Matt Weldon said in an interview Tuesday that those rules, suspended at the outset of the COVID-19 pandemic, would be back in place “in the coming weeks.”
“Now that we’re heading into the best time we had been in the last year with the vaccine rollout, this is the time I’m talking to the governor about reinstating some of the rules,” Weldon said.
The rules were suspended at the beginning of the COVID-19 pandemic when people were laid off but had nowhere to look for work because the economy was shut down. Now, businesses are reopening and vaccines are available to everyone 16 and older.
“What we’re trying to do now is force some change to get people back into our economy,” Weldon said.
Under new Biden administration rules, there are circumstances under which people could refuse to work and stay on unemployment, like if working would jeopardize their health. But having to actively seek work while collecting unemployment is a state-level rule. Some states re-imposed them last year.
The possible change comes as Rhode Island businesses, from manufacturers to restaurants, say they’re struggling to find help — in part, they say, because people on unemployment aren’t required to look for work right now.
Some employers boosted pay, offered $1,000 referral bonuses for new hires and even offered free room at dormitories on site to get people to work. But they say they’re having little luck, and some restaurants say that even if the state allowed them to reopen, they wouldn’t be able to do it because they don’t have the staff for it.
Those businesses also say they’re having trouble competing with the government, which is boosting people’s unemployment checks by $300 a week into September. Some economists and experts are skeptical that extra unemployment is keeping people away from the Help Wanted ads, but restaurateurs in Rhode Island say they know what they know: Part-time workers, for example, have said they needed to limit their shifts so they wouldn’t lose out on unemployment, one proprietor said.
Weldon said while generous unemployment benefits could be part of the issue, people are also fearful that they might lose their entire connection with the safety net after a challenging year.
To address the issue, Weldon has helped craft a bill in the state General Assembly that advocates say would help.
Under the current system, if people make more than what they get in their weekly unemployment check, they’re not eligible for any unemployment money — including that extra $300 from the federal government.
The bill Weldon is supporting would allow people to work up to 150 percent of their normal benefit amount and still receive unemployment compensation, which means they’d be able to stay in the unemployment system, and keep the extra $300, while working and earning more. The bill would also allow people to work more without having money deducted, up to 50 percent of their weekly benefit rate.
“It would maybe encourage people concerned about losing on the safety net to get more shifts,” Weldon said.
State Representative Carol Hagan McEntee, a Democrat of Narragansett, has introduced the bill in the House. She’s heard from businesses in her district about how hard it is to find workers nowadays.
“This bill is really a win-win for the business community and the workers,” McEntee said.
According to DLT figures, as of March 13, there were 8,400 people collecting unemployment insurance who were previously employed in the accommodation and food services sector, of whom 1,550 were working part-time. The sector lost 11,300 jobs compared to its pre-pandemic level, and had only regained 65 percent of jobs lost during that time. All told, 67,867 people were receiving unemployment benefits in Rhode Island as of last week.
“It’s hard to understand from an employer’s perspective how there can be high unemployment when every place you go to, not just in the restaurant industry, has help wanted ads,” Bob Bacon, the owner of Gregg’s restaurants, said.
Across the four Gregg’s locations in Rhode Island, there are about 30 open spots, Bacon said, which is higher than usual. To keep people at work, they’ve offered bonuses to people who work 25 hours or more a week, funded through a federal tax credit. They’ve also recently started implementing a $1,000 bonus for employees who successfully refer a candidate.
Still, they’re having trouble. Some part-time people have refused additional hours because they want to keep their unemployment benefits. And “a lot of people will call up and make an appointment for an interview and then not show up,” Bacon said.
Kevin Durfee, owner of George’s of Galilee, a Narragansett seafood restaurant, said they’ve offered free housing in dormitories along the beach. They usually have 30 spots in those dorms for people on J1 visas. That visa program has been upended, though, so instead they’re offering them to local people to work for money and live for free along the beach. They’ve also boosted pay for skilled line cooks.
“We’re trying to throw any incentives we can,” Durfee said.
Durfee said he’s heard the solutions before: Simply raise wages significantly across the board and problem solved. It’s not so simple, Durfee said. Restaurants run on razor-thin margins, he said. If they raised wages significantly, they’d have to raise prices. The only restaurants that would be able to account for those costs would be huge national chains, he said. That would strangle local businesses.
In a normal summer, they’ll need about 200 employees. At this time of the year, they usually have 150 as they ramp up. They have fewer than 100 right now. Two recent virtual job fairs elicited exactly zero participants, Durfee said.
“To be honest with you, I’m all out of solutions,” Durfee said. “We’re just going to do the best we can.”
Some economists and progressive groups, though, are skeptical that the unemployment boost is keeping people from getting back into work.
Alan Krinsky, senior policy analyst for the Providence-based Economic Progress Institute, said there’s no data showing that generous unemployment benefits are stopping people from getting back into the labor force. A review by a member of a joint congressional economic committee last year said five studies, taken together, “strongly suggest” that the extra boost is not keeping people from looking for jobs. That was when the boost was $600. Now it’s only $300.
“There may be cases of it happening, but it’s not clear that this is a widespread kind of thing,” Krinsky said.
More broadly in the restaurant industry, there are issues with harassment over rules like masks and pay that is not enough for a living wage, Krinsky argued.
Sarah Bratko, the lobbyist for the Rhode Island Hospitality Association, said it’s also been difficult to find restaurant workers because people have left the industry. They’ve been dealing with transportation and childcare issues, and they weren’t sure when the pandemic would end. The lockdowns of last spring gave way to eased rules in the summer, but then a second wave in the winter led to a “pause” and more economic hardship.
“It’s kind of this perfect storm,” Bratko said.