NJ Financial News: Gov. Murphy Announces Abrupt End to Additional Weekly Unemployment Benefits

Governor Murphy announced yesterday that New Jersey will not opt to use any of the 6.2 billion allotted to it by the American Rescue Plan to continue paying weekly benefits through the PUA and PEUC.

This is a tricky topic to cover. While I’m sure no Monmouth County business owners wish for their employees to have less money, the staffing shortage I discussed is a very real situation that runs the risk of taking businesses under if they can’t operate as they have been accustomed to in years past (I’m completely exempting 2020 from that statement).

In this article I’ll cover the important details about this announcement, as well as some of the takeaways for business owners.

Is this important? Is this irrelevant?

Let’s take a look.

What Are the PUA and PEUC?

The PUA and PEUC were just a couple of many programs enacted at the height of the COVID crisis in 2020. The purpose of these programs was to increase the level of support that applicants got from unemployment insurance, as well as enlarging the pool of applicable recipients.

What Exactly Do they Do?

  • The PUA (Pandemic Unemployment Assistance) extends unemployment eligibility to those who would not normally be able to apply. Think freelancers, sole proprietors, those who quit their jobs, etc… We have an article on this topic, if you want to learn more.
  • The PEUC (Pandemic Emergency Unemployment Compensation) extends unemployment benefits for an additional 13 weeks past the point where they would normally be exhausted.

Why Is Governor Murphy Ending Supplemental UI Payments?

According to Gov. Murphy in his press conference where he announced their September 4th lapse, the PUA and PEUC would cost the state an estimated 314 million dollars each week. This means that the state will be saving over a billion dollars each month, decreasing our collective debt and hopefully preventing any increases to pay for these programs.

Beyond the dollars and cents, there’s the fact that NJ has the 5th largest unemployment rate in the nation. No matter where your beliefs lie on the political spectrum, it’s hard to argue that giving people money to stay home from work encourages them to go back.

President Biden had suggested that states suffering these high unemployment rates continue their expanded unemployment programs by using the money allotted to them in the American Rescue Plan.

Naturally, it’s a tough sell to make no improvements to the functionality of the state or infrastructure, and give $6.2 billion so people can stay home from work.

Don’t misunderstand me, I’m not belittling the suffering of the unemployed, it’s just that…they’re probably not the voting block Murphy is courting.

Murphy also stated, as was probably suggested by his PR staff, that “The proper way to extend federal UI benefits is through federal action, not a patchwork of state ones. And it should be noted here that no state is extending this benefit beyond Sept. 4.”

This gave him a duality of outs in this situation, where he can say ‘well, no one else is doing this in their states,’ as well as properly aligning with his political camp as he kicks the problem back up to Washington. This is certainly in lieu of simply saying “I’m not gonna do this, it’s time for it to end!”

I’m not yelling at the guy, I agree with him, but I’m always in favor of politicians being more straightforward than they tend to be.

To soften the blow, the Governor added “We recognize the impact that this will have on some families facing unemployment issues. To support New Jerseyans through suffering through the economic impacts of the pandemic we have invested in rent-assistance, food-assistance, child-care assistance, health-care affordability assistance, and other assistance programs we have set up and which are funded through billions of dollars of federal coronavirus relief programs.”

This will certainly curry favor with those that are losing one, maybe their only, source of revenue at the same time that it encourages them to get back to work.

Who’s Going To Be Affected By Supplemental Payments Ending?

It’s estimated that 500,000 New Jerseyans are still receiving funds under one or both of these programs. That means that 500,000 people who have been receiving money from the state, probably for a good while, are about to be looking for a job.

While they’re certainly the larger number, I believe the group that will be affected most will be business owners. It might be that the labor shortage has an expiration date, and that date is just a couple days away.

Takeaways for Business Owners

I know it might be tempting to shelf those higher wages, or bonuses you had been offering in attempt to attract quality labor, but take a minute before you do that. Remember, there are about to be many more workers in the market for a job, but there are also an unprecedented number of businesses looking to hire workers!

Don’t be surprised if you drop all the incentives, and still find yourself unable to land the talent you’re looking for. Workers have more leverage than at any time in anyone’s memory. People have learned how to do more with less, and, being straightforward, not every job is a great job.

Someone who’s had an extended break from brutal labor in the heat, or office work that can be mind-numbing on even the best of days, isn’t going to jump back into that situation that they’ve happily been away from. Make sure to remember that saying “nice work” isn’t enough, and the dollars have to accompany the appreciation.