To some, it may not feel like it, but Pennsylvania’s economy is in crisis. The most recent Department of Labor data from June shows that nationwide, about 14,000 fewer people applied for unemployment benefits than the month prior. Meanwhile, in Pennsylvania, about 14,000 more people applied for unemployment benefits. We are going the exact opposite direction of the rest of the country.
Don’t be fooled by those politicians or commentators who brag about “soaring economic growth” while comparing June 2021 to June 2020. They might as well compare it to the Great Depression. Who would measure economic growth against a lockdown-economy?
Far too many businesses are still not fully-opened. Many businesses are struggling because too many employees are refusing to return to work. And business owners cannot find anyone to replace them—even when offering higher wages and signing bonuses.
Unfortunately, there is no sense of urgency among many of Pennsylvania’s leaders to fix these problems. One cannot help but to begin to reach the conclusion that the governor and many legislators either don’t think there is a problem, or they are using this crisis as political leverage to enact their ideologically-driven agenda: more powerful government and higher-taxes.
It’s not as though the solutions to this government-created situation aren’t simple and obvious.
Pennsylvania remains among the minority of states still paying people to stay home by offering unemployment payments plus $300 extra from the federal government. The governor and his allies are rewarding those staying at home and harming those working, with many having to work harder, longer hours.
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Pennsylvania’s combined unemployment payments contribute to the national problem uncovered by the US Chamber: At least 16% of those on unemployment self-report that they are making more money staying on unemployment.
This policy is forcing small businesses to go into a bidding war with the government, further punishing local business owners struggling to get supplies, deal with inflation, and reach their revenue targets.
At the same time, some larger or economically stronger companies are offering higher salaries and adapting to automation, when possible. As a result, small business owners are getting squeezed, twice. First, by the government and second, by larger competitors able to capitalize on the difficult economic environment.
Politicians who shrug their shoulders and cavalierly say, “If you want your employees back, pay them more” are displaying arrogance met only by their ignorance of economics. Small businesses, which are often the businesses the government forced to close the longest, are the least able to fight this two-front battle. And if they lose, we all lose.
According to the most recently published data by the U.S. Bureau of Labor Statistics, there is approximately one job for every person unemployed. Covid vaccines are free of charge and widely available. For the vast majority of able-bodied people, it’s well-past time to go back to work. The governor ought to stop paying people $300 extra each week to stay at home.
There is another way to get our economy to full-strength. Pennsylvania ought to join the majority of states offering liability protection to business owners who comply with CDC guidance for safe-operations. One of the reasons that major employers are hesitant to invite employees back to headquarters is fear of being sued.
This delayed return has ripple effects across our state.
First, the longer full re-opening is delayed, the more imperiled commercial real estate becomes. If that part of our economy fails in 2021 or 2022, the impacts will be widely felt. Second, the longer that corporate offices aren’t full, the more our cities, towns and, office parks become shopping deserts. Third, all of the coffee shops, dry cleaners, restaurants and gas stations dependent on people going into the office will continue to operate at a deficit. This is happening in month-17 of “two-weeks to flatten the curve.”
Common sense and fairness make the case for limited liability protection. If a business fully complies with CDC guidelines, then they would be protected from lawsuits. While the legal costs of defending a lawsuit harm major employers, they can cripple and destroy family-owned businesses, costing $30,000-$200,000 or more to “win” a lawsuit that should never have been filed.
It’s past time for the governor to work with legislators to embrace common-sense policies that are working in most states. It’s past time for the governor to encourage work and reopening, and reward good corporate-citizenship. Failure to do so will prove that either they are out of touch, or their goals and values are anti-small business. They must change policies, or we need new policy-makers.
Guy Ciarrocchi is the CEO of the Chester County Chamber of Business & Industry. Learn more at JoinChescoChamber.org