The National Federation of Independent Business (NFIB)’s monthly jobs report for July shows that 49% of positions are unfilled statewide, which is above the 48-year historical average of 22%, according to a press release.
NFIB’s California state director John Kabateck blames workers depending on unemployment and federal pandemic benefits for income instead of a job.
“Small business owners are unable to compete with the $300 a week in federal dollars, which many employees are receiving on top of state unemployment dollars,” Kabateck told the Southern California Record. “They are creating a bigger and bigger balance for the Unemployment Insurance Trust Fund and to compound that problem, we are finding many small business owners are grappling with workers not coming back to work because they are finding a much cushier scenario at home by receiving government dollars.”
The unemployment rate in California is currently 7.7%, according to the state’s Employment Development Department (EDD).
“There is place and position for unemployment benefits in America,” Kabateck said. “For people who have hit hard times, it should serve as a very temporary safety net until people get back on their feet. It should not be an elongated couch for people to lay back and rest their laurels and their hopes and future on.”
The state’s Unemployment Insurance (UI) Trust Fund is financed through payroll taxes but it became insolvent after 1.3 million unemployed workers applied for weekly benefits during the pandemic and the state availed itself of federal loans in order to continue to pay the money, according to a California Legislative Analyst’s Office (LAO) report.
“If our state leaders continue to kick the can down the road and refuse to pay down this exorbitant unemployment credit card bill that California owes, then the debt will not fall on the backs of our government, it will fall directly on the backs of main street mom and pop businesses,” Kabateck said.
The state owes some $21 billion in federal loans that were used to bolster the UI trust fund, according to media reports.
“Come September 6, interest starts to accrue at 2.27% if the loan is not paid in full,” Kabateck said.
The NFIB is calling on the state legislature to acknowledge and address the debt.
“Our lawmakers rebuffed Gov. Newsom’s $1 billion-plus budget allocation and decided to put it in the court of our federal government,” Kabateck added. “They are putting all of their faith and hopes in one basket that the federal government will pay this down eventually. Unfortunately, we have seen no sign from the Biden administration or Congress that they intend to do that anytime in the future.”