Central Minnesota business survey shows unemployment benefits hamper hiring

Respondents to a survey of central Minnesota businesses reported that expanded unemployment benefits hinder hiring efforts.

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Thursday’s initial weekly jobless claims report from the Labor Department dropped to 406,000, the lowest since March 2020.

The same report, however, also showed over 12 million continuing claims for expanded benefits, while the nation sees 8 million unfilled job openings. Some analysts believe the seemingly endless unemployment benefits are distorting the labor market.

Since Minnesota relaxed pandemic-related restrictions in early May and stimulus money arrived about two months ago, the St. Cloud Metropolitan Area gained over 1,300 jobs, yet the labor force grew by only about 240 workers.

Respondents to a survey of central Minnesota businesses — constituting St. Cloud, St. Joseph, Sartell, Sauk Rapids and Waite Park — reported that expanded unemployment benefits hinder hiring efforts, cause companies to lose clients, decrease production, and/or disrupt expansion plans.

Released Wednesday by the Greater St. Cloud Development Corp., the survey shows more than half of the 215 respondents have up to seven open positions and a quarter have 14 or more; the hardest-to-fill jobs were positions earning $15 to $25 an hour. About 40% said less than half the applicants offered jobs accepted them.

Also, nearly half of survey respondents said it takes more than six weeks to fill open jobs.

“It’s complex. It’s not an easy fix but it is important that we recognize there are some serious gaps and there are folks that are choosing not to take jobs,” GSDC President Patti Gartland told the Star Tribune this week. “The pendulum is swinging. Times have changed. But the benefits structure, the qualification structure and the enforcement structure hasn’t.”

In a press release about the survey results, longtime St. Cloud Area Chamber of Commerce President Teresa Bohnen encouraged rapid action by the state to address the issues.

“Our local businesses can’t afford to simply wait out this crisis until expanded federal unemployment benefits end on Sept. 6,” Bohnen said in a press release. “We need the state to take the steps under its control to make a positive difference.”

St. Cloud business owners want St. Paul to follow the example of red states in ending pandemic unemployment benefits sooner than the fall since businesses may not otherwise survive.

Bohnen and Gartland met with local legislators this week. They hope state leadership can better enforce requirements for recipients to qualify for unemployment benefits; establish a process for companies to report non-responsive applicants; add incentives for people to return to work; and more.

Local businesses claim most available jobs pay better than government benefits do, though they require in-person work. While increasing wages can get people to work, the past year shows many prefer taking similar or slightly less pay to stay home.