By Nicholas P. Flint
Employers across Georgia and indeed the U.S. are struggling in the fight against our country's self-inflicted labor shortages and increasing prices of products from chicken to lumber. The double-whammy is hitting small businesses especially hard, who are less able than their (curiously pro-federal dole-out) multinational counterparts, to absorb these higher product costs while dealing with a workforce who makes more money from government subsidies while staying at home than going into the workplace.
When it comes to the labor shortage, the Wall Street Journal's own editorial board has taken to pleading (see https://www.wsj.com/articles/a-good-worker-is-hard-to-find-11622845855 and https://www.wsj.com/articles/the-great-american-labor-shortage-11623191784) for the Biden Administration and Congress to stop the additional ladling out of cash to Americans to the tune of $300 a week, which literally has created the financial incentive for people to stay home on the couch and not work.
The good news, as one of the WSJ articles notes, is that 25 states decided to stop accepting these additional federal unemployment benefits. Thankfully, Georgia is one of them, and starting next week (June 27th to be exact) the state will no longer participate in the federal unemployment programs enacted under the CARES Act.
Small businesses across Georgia should soon be able to breathe a collective sigh of relief, at least when it comes to labor shortages, as workers who have stayed home to collect unemployment will be forced back into the workplace now that their pipeline of "free money" is being cut off . Georgia businesses should be prepared. From ensuring employee handbooks and employment agreements are up-to-date and comply with state and federal laws, to the logistics of drafting and enforcing non-competes and other restrictive covenant agreements, to office space and human resources considerations in a post-pandemic world, Georgia businesses should be ready for an influx of job applications in the near future.
Of course, none of this bodes for the next item on the agenda which threatens employers in the future: Universal basic income. As the WSJ editorial board points out, such a concept will in practice have the same effect as the federal unemployment handouts under the cover of COVID: "[T]he threshold wage or salary required for workers, especially the young and unskilled, to enter the workforce would rise considerably. Add commuting and other costs as well as lost leisure, and more people will choose not to work. This means fewer opportunities to rise up the income ladder, and more dependence on government." Another problem for another day in the life of a small business owner.
Nicholas Flint is an attorney with Flint, Connolly & Walker, LLP who represents clients on a variety of corporate and transactional matters. In addition to his transactional practice, Mr. Flint routinely serves as a general business and legal advisor to his clients, counseling on matters such as corporate governance, labor and employment law, executive compensation, regulatory compliance, and commercial contracts.