Amid a worsening COVID-19 outbreak, Louisiana on Saturday will end its participation in the federal government’s pandemic unemployment programs, cutting off jobless benefits for more than 150,000 residents and slashing payments in half for thousands more who remain out-of-work.
Louisiana residents will no longer receive an extra $300 a week on top of the state’s maximum $247 benefit. The state will also pull out of federal programs that provided jobless aid to self-employed workers and gig workers and allowed people to get jobless benefits past the 26-week state cap.
The benefits were made available by Congress until Labor Day, but Gov. John Bel Edwards, a Democrat, ordered Louisiana to stop accepting the federal payments effective July 31 in exchange for support from GOP lawmakers and business groups for a permanent $28 hike to the state’s weekly unemployment benefits, beginning in six months.
The move spells the end to jobless aid for nearly 86,000 residents who make their living as self-employed contractors, musicians, tour guides or gig workers. Another 65,000 residents who have exceeded the state’s 26-week-long limit on unemployment benefits will also get the boot, according to data from the Louisiana Workforce Commission.
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For the 35,000 residents who will remain on unemployment rolls, weekly checks will be cut in half – as Louisiana joins 25 Republican-led states that have rejected the $300 supplemental payments under pressure from business groups who argue the payments are discouraging employees from returning to work.
Companies have been trying to fill millions of jobs as the country's vaccination program has started to bring parts of the economy back online. It's been especially difficult to find workers in lower-paid jobs in hospitality, but the same has been true in health care, public sanitation and other sectors.
“Our core mission has always been putting Louisianans to work, but that is more important now than ever,” Workforce Commission Secretary Ava Cates said in a statement. “What matters right now is helping people provide for themselves and their families and making sure Louisiana comes back stronger than ever.”
But with cases of COVID-19 rising at their fastest rate since the pandemic began, some workers, particularly within the state’s tourism industry, are questioning whether now is the right time to purge the unemployment rolls, especially as Edwards encourages residents to stay away from crowds to avoid spreading the virus.
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“This is going to have biblical repercussions, and the result will be more homelessness and poverty, on top of a pandemic,” said David Lord, 66, who works as a tour guide in New Orleans’ French Quarter and has seen his bookings drop off since the pandemic heated back up. “It’s just bottoming out again, like it did last summer.”
Adding to the COVID-19 surge, August is historically a slow month for tourism in Louisiana, with its punishing heat, focus on back-to-school prep and prevalence of hurricanes. Lord, who has a heart condition that puts him at higher risk of complications from the virus, receives benefits under the gig-worker program and will no longer qualify for payments.
When Edwards announced his support for the compromise in June, he said he was trying to strike a “reasonable balance” between helping the jobless and assisting businesses having trouble finding workers. Still, Edwards said tourism jobs were his “biggest concern, because until tourism is back, many of those jobs are not going to be fully back.”
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Kelly Schulz, a spokesperson for New Orleans and Company, the city’s marketing organization, said the tourism industry is back, “though certainly not at 100 percent.” She said there’s no indication, at the moment, that the latest surge in COVID-19 will negatively impact recovery in the hospitality industry, adding that there haven’t been any major event cancellations to-date.
The possibility of a statewide indoor mask mandate is unlikely to dissuade tourists from traveling to New Orleans, Shultz said, however, she said the industry’s full recovery is tied to the state’s vaccination campaign.
“The tourism industry is not going to fully recover unless we get more and more people vaccinated,” Schultz said, adding that there are about 25,000 “great jobs” available in hospitality at the moment.
Ten business groups representing Louisiana’s contractors, retailers, gas stations, restaurants, homebuilders, convenience stores sent a letter to Edwards in May urging him to nix the federal benefits, blaming the payments for a worker shortage.
“We believe this additional benefit was an important short-term solution to help individuals who were adversely impacted at the start of the pandemic,” the groups wrote. “However, 13 months later, many employers are finding it near impossible to fully staff their business, which impacts the supply chain and timely delivery of goods and services.”
Jan Moller, executive director at the left-leaning Louisiana Budget Project, which advocates for low- to moderate- income families, said the idea that people are using the federal benefits "as excuse to sit at home to do nothing is false." He said that there isn't a worker shortage, there's a "good-paying jobs shortage."
"Obviously, the timing is deeply unfortunate for these benefits to end," Moller said. "Clearly the Legislature didn’t know this was coming, nobody knew this was coming, but that’s little comfort to people whose jobs might be at risk or whose job prospects might be lessened because we could be entering another period of lower economic activity because of this surge."
The Baton Rouge metro area has added back 18,300 jobs compared to June 2020, when pandemic-related restrictions cut into the job market.