Arizona incentives may lure back workers, but hurdles remain

Posted 5/15/21

Experts are hopeful Gov. Ducey’s new cash incentives will lead to more Arizonans getting off unemployment and returning to regular full-time jobs.

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Arizona incentives may lure back workers, but hurdles remain


Experts are hopeful Arizona Gov. Doug Ducey’s plan for cash incentives will lure to more Arizonans to get off unemployment and return to regular full-time jobs.

At the same time, one local economist says there are more issues keeping people away from work.

On May 13, Gov. Ducey announced Arizona will no longer be taking the Federal Pandemic Unemployment Compensation, and instead will offer one-time bonuses to returning workers, along with child care support, educational opportunities and rental assistance.

According to a press release, Arizona will offer a $2,000 bonus for eligible workers — with a goal of getting as many Arizonans as possible to rejoin the workforce by Labor Day, Sept. 6.

Nowhere is the lack of workers more acute than in the restaurant industry, where leaders say they have had a hard time finding employees across the board.
Steve Chucri, president and CEO of the Arizona Restaurant Association, said he supports the governor’s actions.

Mr. Chucri has said Valley restaurants have had trouble finding workers because he believes some Arizonans were collecting a weekly unemployment check that equals about $540 when factoring in $300 from federal pandemic relief efforts.

He said the move by Mr. Ducey is “a step in the right direction” and the governor “recognizes” the issue.

Some employers are going to great lengths to hire new employees. According to published reports, a McDonald’s in Tampa paid $50 to applicants who showed up for a job interview.

In Arizona, Mr. Chucri said wages could increase in the restaurant industry over time to help further incentivize people to return to the workforce.

“We are trying to do all we can to get people motivated and get them to come to work,” Mr. Chucri said.

Last month, statistics from San Francisco-based marketing software firm Zenreach showed a nationwide trend where restaurants and retail shops have seen a 90-day increase in business of 47.42% above last year’s numbers.

Valley retailers in cities such as Phoenix, Mesa and Chandler have seen a 38.66% jump.

Yet, some Valley restaurateurs reported struggling to find help.

In the meantime, business has been booming with more people being vaccinated and wanting to eat out. Michael Rusconi, owner of Rusconi’s American Kitchen in Phoenix, is one of the Valley’s restaurant owners struggling to find help.

The restaurant owner said the current crop of talent “is sketchy at best,” and most who schedule an interview fail to show up.

Elliott Pollack, CEO of Scottsdale-based economic and consulting firm Elliott D. Pollack & Co., said the initial incentives triggered predictable responses.

“By the way, there’s nothing wrong with what people did,” Mr. Pollack said. “They were reacting to the incentives given to them. That’s what people do.”
He said, in general, the move by Arizona’s governor is a plus and said he expects the incentive will result in a “higher rate of people” returning to work in the coming weeks.

Still, Mr. Pollack said that might not include everyone.

Some retail workers — who have a median income of $16.82 per hour — might not be motivated by $3 more they would make getting off the couch. The median income for hospitality workers is $12.29 an hour before tips while unemployment benefits have equaled to about $13.50 per hour, he said.

“For $3 (an hour more), am I going back to work?” Pollack asked. “Overall, the answer is no.”
Mr. Pollack said other industries have competed well against the restaurant industry to get employees.
At Amazon, the company is offering a $1,000 sign-on bonus for seasonal warehouse team member positions in Tolleson and West Phoenix, according to its website. The hourly rate is listed at up to $17 per hour.

“New hires who show proof of their Covid-19 vaccination earn a $100 bonus their first day,” the website said.
Bonus payouts at Amazon occur in two installments — $500 payable after 30 days and $500 after 90 days.

For some people, matters such as child care remain an issue, but Mr. Pollack said the cash payout could coax some back.

“The $2,000 might take care of that for a little while,” he said.

Some economists say they don’t believe the unemployment benefits are creating a worker shortage.
Published reports said William Spriggs, chief economist for AFL-CIO labor federation, said employers haven’t found people looking for jobs.

Mr. Spriggs said the pandemic caused networks that restaurant owners usually used — such as hiring friends and neighbors of current workers — to break down since some original employees at eateries never returned.

Mr. Chucri doesn’t agree with that idea.

“I bet there’s some truth to that,” said Mr. Chucri. “ ...It’s too much of a general statement. It’s a spoke, not the hub of the wheel.”

In the long run, Mr. Pollack said he anticipates employment in all aspects will return in a revitalized economy.

“There will be plenty of jobs for virtually everybody.”