States that stopped federal pandemic benefits see rapid job recovery gains

While the Wuhan coronavirus (COVID-19) pandemic saw record levels of unemployment in the United States, several states are now seeing their job markets recover at a faster rate after ending unemployment benefits.

Twenty-six states have opted out of the expanded unemployment benefits program ahead of its Sept. 6 expiration, 25 of which have Republican governors.

Many economists have pondered whether the federal unemployment benefits have really discouraged workers from returning to the labor force. But they also acknowledged that a variety of factors contributed to the current labor shortage.

Goldman Sachs Chief Economist Jan Hatzius said the expiration of the unemployment benefits “will likely provide a tailwind to hiring in the coming months.” The economist wrote in a June 11 report: “Our baseline assumption is that expiring [federal unemployment] benefits will boost job growth by over 150,000 in July and over 400,000 in September.” However, Hatzius noted that these figures still have “high uncertainty” around them.

Meanwhile, U.S. employment marketplace ZipRecruiter noted a rapid rise in job applications in states that prematurely ended their enhanced benefits program. ZipRecruiter Labor Economist Julia Pollak told the Epoch Times: “Job search sites have more frequent data on job search activity and are a valuable source of information on what’s going on in real time.”

Pollak said following the Memorial Day holiday week that ended June 5, job searches and applications in states that ended the enhanced benefits program saw an uptick. “But it is too soon to tell for sure,” she added.

The effect of states prematurely ending the extra $300 weekly pandemic unemployment benefits would not be fully visible until early August 2021 – when the jobs report for July is published. But in those states that did so, reports noted that both continued and initial unemployment benefit claims saw a decline. (Related: As extra unemployment benefits run out, laid-off workers scramble to look for jobs amid coronavirus pandemic.)

Workers find it more lucrative to go on welfare than get a job

Despite employers having trouble filling job openings, millions of Americans still remain unemployed. In April of this year, employers posted a record 9.3 million job openings as the economy continued to bounce back amid the pandemic.

President Joe Biden put forward a simple solution to the glut of unemployed Americans – paying them a higher wage. During a June 24 White House press briefing, he told employers to “pay their workers more” to solve the issue of companies failing to find suitable employees for job openings. “This is the employees’ bargaining chip now. [Employers] are going to have to compete and start paying hard-working people a decent wage,” Biden said.

But employers have said they cannot compete with federal unemployment benefits that reward people for staying home instead of working. Thus, the U.S. Chamber of Commerce (USCC) has called for all remaining states to end the $300 weekly unemployment benefit early to address “the country’s ever-worsening workforce crisis.”

USCC Executive Vice President and Chief Policy Officer Neil Bradley said in a June 8 press release: “America’s great economic resurgence is being held back by an unprecedented workforce shortage – and it’s getting worse.”

Aside from calling for the premature end of the weekly unemployment supplement, the press release also called for governors to pour coronavirus relief money into programs for rapid job training programs.

Talking to the Epoch Times, New York-based HomeGrounds provided an online platform for coffee hobbyists. While it aimed to ride on a digital boom caused by the pandemic, the lack of staff members derailed its plans. (Related: Florida McDonald’s forced to pay applicants $50 just to show up to interview because unemployment benefits are more lucrative.)

“We’ve tried any number of tactics … [but] we have found no magic bullet,” said HomeGrounds CEO Alex Mastin. “You’d think a digital business would be the easiest for finding workers during and after the pandemic. It’s been such a trial.”

Meanwhile, Pennsylvania-based market research firm Focus Insite provided recruitment services for focus groups, online studied and interviews. Its CEO and founder Jim Jacobs said: “Since we have fully transitioned to a 100 percent remote company, we are specifically looking to recruit from only business-friendly states moving forward.”

Jacobs also lamented the difficulty of looking for suitable employees in Pennsylvania, saying that the Keystone State “has been brutal with the extension of [unemployment] benefits.” He continued: “We have hired 20 people this year, but it gets harder and harder. Why would people work when they can make $47,000 a year on unemployment [benefits]?”

Visit Pandemic.news to read more articles about the federal government’s pandemic unemployment benefits.

Sources include:

TheEpochTimes.com

BusinessInsider.com

USChamber.com