California policymakers have a big decision to make when the UI interest clock starts ticking
SACRAMENTO, Calif., Aug. 5, 2021—The release today of NFIB’s monthly Jobs Report raises an interesting question for state lawmakers to consider when they return from summer recess August 16, said the state director for California’s leading small-business association, and it’s not one that surfaces from the report but lurks underneath
“Today’s Jobs Report does raise an interesting conundrum,” said John Kabateck, California state director for the National Federation of Independent Business (NFIB), which produces the monthly Jobs Report. “How have record highs in employee compensation not affected the equally record highs in unfilled job openings?
“I’m not honestly asking the Legislature to come up with an answer to that question. What I am asking for is an honest answer to a question equally, if not more important, to small-business owners that today’s Jobs Report serves as an excellent springboard for: Are you honestly gambling that the federal government will miraculously forgive the more than $23 billion California owes it in loan payments for money it used to keep the state’s unemployment trust fund solvent? If the feds don’t forgive the loans, the astronomic spikes in UI taxes that small businesses will have to pay will make the problem of finding employees pale by comparison.”
Kabateck pointed out that come September 6 interest on the loans starts to accrue at $2.27% if the loan is not paid in full, which is hardly likely, even though the state has never been more flushed with funds. Also on September 6, the extra $300 a week the federal government has slapped on top of state unemployment benefits comes to an end. A poll for Axios conducted by Morning Consult found 1.8 million Americans turning down jobs because of unemployment benefits.
Highlights from the Jobs Report
- July’s reading of unfilled job openings was 49%, a record high and far above the 48-year historical average of 22%
- Forty-three percent of owners have job openings for skilled workers (up three points) and 25% have openings for unskilled workers (up three points). In the construction industry, 59% of the job openings are for skilled workers. Sixty-six percent of construction firms reported few or no qualified applicants for their open positions.
- Seasonally adjusted, a net 38% reported raising compensation, down one point from June’s record high of 39%. A net 27% of owners plan to raise compensation in the next three months, up one point from June and a 48-year record high reading.
From NFIB Chief Economist Bill Dunkelberg
“Small business owners struggled to find qualified workers for their open positions, which has impaired business activity in the busy summer months. Owners are raising compensation to the highest levels in 48 years to attract needed employees.”
NFIB’s Jobs Report is a national snapshot not broken down by state. Today’s results were based on 1,440 respondents to the July survey of a random sample of NFIB’s member firms, surveyed through 7/30/2021. The NFIB Research Foundation has collected Small Business Economic Trends data with quarterly surveys since 1974 and monthly surveys since 1986.
Keep up with the latest on California small-business news at www.nfib.com/california, where this release can also be read, or by following NFIB on Twitter @NFIB_CA or on Facebook @NFIB.CA.
For 78 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since its founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.
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