Labor Day is especially meaningful for many small businesses across the U.S. Monday, because the day brings hope that many struggling to stay open can actually start addressing the horrible labor shortage that has staggered small businesses since the pandemic.
Labor Day on Monday just happens to coincide with the end of the enhanced federal unemployment benefits that were paying literally millions of people not to work.
The end of the mailbox money for so many capable of working but choosing not to because they could make more with the free handouts means job applications should begin to be filed out at restaurants, construction companies, hotels, and other service related jobs across the county.
You don’t have to be an MIT honors grad to be able to do this math. There are 10.1 million jobs available nationwide right now, and starting on Labor Day, approximately 11.2 million people will be seeing some form of unemployment payments ending.
If you were wondering just how it could possibly make sense for people to choose not to work, here’s why. The enhanced form of federal unemployment paid $300 weekly. That was on top of state unemployment payments, which was nearly $400 per week. That’s almost $3K of tax-free money each month.
There were also other ways the government was helping people make what was an easy decision to not work for many. There was monthly child credits and food stamps too.
Goldman Sachs did a study that showed there was clear evidence that the increased and expanded benefits led to the worker shortage.
Jim Balis, the CEO of a restaurant chain that operates almost 500 restaurants told the Wall Street Journal that his experience was applications in non-benefit states rose by 20% when the free money stopped.
Labor Day. Working has been a foreign concept to many the past year or so, but now with the gravy train of free money shutting down, the economy should see some positive benefits.