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AZ governor ends federal unemployment subsidy that is 'barrier to getting people back to work'

Posted at 7:06 PM, May 13, 2021
and last updated 2021-05-13 22:49:35-04

Governor Doug Ducey announced Thursday he will end the federal pandemic unemployment subsidy on July 10, and join a list of Republican governors who turned down the money because they believe it’s hindering efforts to get people off unemployment.

In a message tweeted Thursday morning the governor said, “Small business simply cannot compete. Unemployment benefits are an important safety net but we can’t let them be a barrier to getting people back to work.”

“We would put out an ad and get 30 responses in a day. Now we’d be lucky to get 4 responses in a week,” said Phil Johnson, the owner of Trap Haus Barbeque on Roosevelt Street in Phoenix.

You can smell the barbeque a block away. The restaurant survived the pandemic with its reputation for great food and offering curbside service, but as the city opens up and more people are going out to eat, Johnson can’t find enough servers.

He is operating at half of the staff he needs, so for his employees, it means overtime, no vacations and being closed an extra day.

“Now that things are opening, now my struggle is to make sure people are coming into work and keeping a proper staff for the customer service base,” Johnson says.

RELATED: What does Gov. Ducey's unemployment benefits change mean for Arizonans?

In Arizona, people on employment currently receive $540 a week; $300 from the federal government plus the $240 they receive in assistance from Arizona.

Arizona pays out the 2nd lowest amount in unemployment benefits in the nation. It may not seem like a lot of money, but in the governor’s view, it’s enough to keep people from applying for jobs at restaurants and in the hospitality industry.

The governor says his Get Back to Work Plan is specifically targeted to entice more workers to return to the restaurant and hospitality industries. Eligible workers can receive a $2,000 dollar bonus if they stay on the job for at least eight weeks. The state will also provide workers assistance with child care, educational opportunities and rental assistance.

“I don’t believe it’s a silver bullet, but I certainly believe it’s a step in the right direction,” said Steve Chucri, President and C.E.O. of the Arizona Restaurant Association.

Chucri says there is no simple explanation for the lack of workers.

According to a study done for the Arizona Restaurant Association, some people left the state, some got new jobs, some either got COVID-19, cared for someone who did or are fearful of coming back to work and contracting the virus.

“To put your finger on one thing is next to impossible. But you have to remember 80% of the workforce got laid off in the first days of COVID-19. If you told me what would happen I would have laughed at you back then,” Chucri said.

The governor will use $300 million dollars in federal pandemic relief money to fund the Get Back to Work Plan.

Not everyone thinks what he is doing is a good idea.

The Arizona Center for Economic Progress calls it a “cruel, misguided decision scapegoats and coerces workers into accepting substandard jobs. Arizona’s economic recovery is far from over, and expanded unemployment benefits are crucial to that recovery.”