There’s lots of good news for the New Hampshire labor force this Labor Day. So why is a progressive group suing to force Gov. Chris Sununu to keep handing out unemployment bonuses? Bonuses that some economists have linked to the ongoing labor shortage that is hurting the economy?
New Hampshire’s unemployment rate has fallen to 2.9 percent, about half the national rate of 5.2 percent. Granite State businesses are struggling to fill nearly 39,000 job openings — double the number before COVID-19 hit.
Not only is unemployment low and labor demand high, but wages are also soaring. At a national level, hourly worker pay rose again in August, and wages have jumped 4.3 percent over the past year alone.
Nationally, some 10 million jobs are unfilled even as millions of potential workers receive both state and federal unemployment checks.
“The labor shortage is a big puzzle for economists, but some of the pieces are well known,” writes Jeffrey Bartash at MarketWatch. “For one thing, millions of people are still collecting unemployment benefits that in many cases pay more than their old jobs did. That’s because the federal government is temporarily doling out extra money to the unemployed during the pandemic.”
After saying he would keep the federal benefits coming, Sununu reversed course in May, under pressure from business owners insisting the labor market needed more supply, not more unemployment subsidies. Sununu didn’t just end the stay-home payouts. He converted the federal funds into bonuses for employees who went back to work.
“Everyone is looking to hire. Wages are starting at $15 or $20 an hour. This is an awesome opportunity for our citizens to get back to work,” Sununu said at the time. “Every employer I talk to is looking for workers. They’re desperate for not just the $300 to go away, which it will as soon as it can on June 19, but also now, we’re kind of reversing course a little bit in a positive way and adding a stipend — an incentive — to get folks back to work.”
Now, the liberal activist organization, Granite State Progress, is suing the state of New Hampshire for withholding those federal unemployment benefits. It’s part of a national campaign liberals are waging against work mandates. Those benefits are scheduled to end this week regardless because Congress declined to extend them.
The lawsuit, which got its first hearing on Friday in the Hillsborough Superior Court in Nashua – at the start of the Labor Day weekend – seeks to have the extended unemployment benefits started under the CARES Act last year reinstated retroactively.
Zandra Rice Hawkins, executive director of Granite State Progress, said ending the unemployment benefit has no relation to helping the workforce. Instead, she insists it hurts families.
“Cutting unemployment benefits didn’t lead to significant job gains, it led to more financial uncertainty for already stressed Granite State families,” said Rice Hawkins. “There are real barriers to workforce re-entry, including childcare and other caregiving responsibilities, health issues, transportation, finding employment that matches your skills and training, and other such factors. The Sununu administration could have focused on any of those instead of taking away people’s benefits.”
In May, then-CEO of the New Hampshire Business and Industry Association Jim Roche lobbied Sununu to end the benefits early because they created an “economic drag.”
“(The benefits) make it easier for some unemployed individuals to choose to stay at home rather than return to work,” Roche said.
Granite State Progress, a 501 (c) 4 political lobbying organization, is backing the lawsuit against the state as part of its overall lobbying efforts. Granite State Progress has led public relations campaigns backing gun restrictions, in support of transgender rights, and against Department of Education Commissioner Frank Edelblut because of his conservative political views. It also runs a website that tracks state representatives who are part of the libertarian Free State Project.
“We work year-round to challenge conservative propaganda and make sure that progressive perspectives are heard,” Granite State Progress states in its mission statement.
The lawsuit is one of 15 other lawsuits activists have brought against Republican governors over the early end of the CARES Act unemployment benefits.
The New Hampshire lawsuit focuses on the Pandemic Unemployment Assistance (PUA), in the CARES Act. The PUA covers workers who are not eligible for regular unemployment insurance benefits, such as self-employed people, independent contractors, gig workers, and people who started a job too recently before becoming unemployed.
Attorney Mike Perez, representing four unemployed Granite Staters in the lawsuit, said the goal is to get the PUA reinstated in New Hampshire and retroactive benefit for his clients.
“We did ask New Hampshire Employment Security to reinstate PUA before filing suit, but we have not heard back from them in response to that request,” Perez said in a statement.
The question some are asking is why Perez’s clients aren’t filling one of the many unfilled New Hampshire jobs?
Judge Jacalyn Colburn is expected to issue a ruling in the case in the coming days.
