Where are the workers? Stopping unemployment assistance does not cause any influx

INDIANAPOLIS – Earlier this year, Republican business leaders and governors urged to remove a federal supplement of $ 300 per week for unemployed Americans. Many people, they said, would then leave the sidelines and take the millions of jobs that employers were desperate to fill.

Yet three months after half of the states began ending this federal payment, there has been no significant influx of job seekers.

In states that cut the $ 300 check, the labor force – the number of people who have or are looking for a job – has not increased more than in states that have maintained the payment. This federal assistance, along with two unemployment assistance programs that served concert workers and the long-term unemployed, ended nationally on September 6. Yet the overall United States workforce actually shrank that month.

“Policymakers were placing too much hope on the end of UI to stimulate the labor market,” said Fiona Greig, chief executive of the JPMorgan Chase Institute, which used data from JPMorgan’s bank accounts to study the question. “The deterrent effects at work were clearly weak. “

Labor shortages have persisted longer than many economists anticipated, deepening a mystery at the heart of the labor market. Companies are eager to add workers and have posted a near record number of available jobs. Unemployment remains high. The economy still has 5 million fewer jobs than before the pandemic. Yet job growth slowed in August and September.

A state-by-state analysis of data by the Associated Press found that enrollments in the 25 states that maintained the $ 300 payment actually increased slightly more from May to September, according to data released Friday, than in the 25 States that cut prepayment, most in June. The federal check for $ 300 a week, in addition to state unemployment assistance, meant that many unemployed people were receiving more benefits than they were earning in their old jobs.

An earlier study by Arindrajit Dube, an economist at the University of Massachusetts Amherst and several colleagues found that states that removed the $ 300 federal payment saw a small increase in the number of unemployed taking a job. But he also found that he did not attract more people to the sidelines to look for work.

Economists point to a series of factors that are likely preventing millions of former unemployed federal aid recipients from returning to the workforce. Many Americans in public jobs are still concerned about contracting COVID-19, for example. Some families lack child care.

Other people, like Rachel Montgomery of Anderson, Indiana, have come to cherish the opportunity to spend more time with their family and feel they can get away with it financially, at least for now. Montgomery, a 37-year-old mother, said she had become much “more picky” about where she was ready to work after losing a restaurant job last year. The loss of the federal payment of $ 300 per week did not change his mind. She will receive a few more weeks of public unemployment assistance.

“Once you’ve stayed home with your kids and family like this, who physically wants to have to go back to work? ” she said. “Looking and watching I told myself that I’m not going to sacrifice pay or flexibility by working remotely when I know I’m qualified to do certain things. But it also means that it takes longer to find these kinds of jobs.

Indeed, the pandemic appears to have caused a reassessment of priorities, with some people deciding to spend more time with their families and others insisting on working remotely or gaining more flexible hours.

Some former beneficiaries, especially the older and better-off, have decided to retire earlier than they expected. As the overall value of Americans’ homes and stock portfolios has risen since the pandemic, Fed officials estimate as many as 2 million more people have retired since then.

And after receiving three stimulus checks in 18 months, plus federal unemployment assistance in some cases, most households have bigger cash buffers than before the pandemic.

Greig and his colleagues at JPMorgan found in a study that the median bank balance of the poorest quarter of households had jumped 70% since the COVID hit. The result is that some people take the time to think about their options before rushing back into the workforce.

Graham Berryman, a 44-year-old Springfield, Missouri resident, has been living off his savings since Missouri removed the $ 300-per-week federal unemployment payment in June. He has had a temporary job reviewing documents for law firms in the past. But he hasn’t found anything permanent since August 2020.

“I’m not lazy,” Berryman said. “I’m unemployed. That doesn’t mean I’m lazy. Just because someone can’t find suitable work in their profession doesn’t mean they’re a trash to throw away.

Likewise, some couples have decided that they can get by on one income, rather than two, at least temporarily.

Nationally, the proportion of women who were working or looking for work in September fell for a second consecutive month, proof that many parents – mostly mothers – are still unable to manage their childcare duties to return. at work.

Child care staff have declined, reducing the care available. And while schools have reopened for in-person learning, frequent closures due to COVID outbreaks have been disruptive for some working parents.

Exacerbating the labor shortage, a record number of people left their jobs in August, spurred in some cases by the prospect of wage increases elsewhere.

In Missouri, a group of businesses, still frustrated with labor shortages more than three months after the state cut federal unemployment checks by $ 300 a week, paid billboards in Springfield who said, “Get your butt off!” ” and get. TO. Job.”

The state has not seen any growth in its workforce since the end of emergency benefits.

“We don’t know where people are,” said Brad Parke, general manager of Greek Corner Screen Printing and Embroidery, which helped pay for the billboards. “Obviously, they’re not at work. Apparently they are at home.

Richard von Glahn, director of policy at Missouri Jobs With Justice, an advocacy group, has suggested that many people on the fringes of the workforce want more benefits or the flexibility to care for children.

“People don’t want to go back” to the pre-pandemic workforce, said von Glahn. “Employers have a role to play in creating a work environment and in providing a package that gives workers the safety they need. ”

In Wyoming, there are fewer people in the workforce today than when the state cut all emergency unemployment assistance. Fear of contracting COVID-19 has likely discouraged some people from seeking employment, Wenlin Liu, chief economist in the state’s Economic Analysis Division, said last week.

Wyoming has one of the lowest vaccination rates in the country, he noted, and has been a COVID-19 hotspot since late summer. The upsurge in infections, Liu said, may cause some parents to keep their children at home.

State Representative Landon Brown, a Republican, defended stopping federal unemployment assistance.

“Wyoming,” said Brown, “is not interested in continuing to allow the federal government to take people away from jobs, paying them as much to stay home in some cases as it does to go looking for a job.”

Mississippi ended all emergency unemployment assistance on June 12. Yet there were fewer people working in August than in May. In Tupelo last week, a job fair drew 60 companies, including a recruiter from VT Halter Marine, a shipbuilder 300 miles to the south. Around 150 to 200 job seekers also participated, less than some companies had hoped.

Adam Todd had organized the job fair for the Mississippi Department of Employment Security, which helps people find jobs and distributes unemployment benefits. The agency has received “calls of desperation,” said Todd, “from companies needing to recruit workers during the pandemic.

“We’re at a different time than we’ve been for a very long time,” Todd said. “The job seeker is really in the driver’s seat right now. ”


Smith is a member of the Associated Press / Report for America Statehouse News Initiative corps. Report for America is a national, nonprofit service program that places reporters in local newsrooms to cover undercover issues.


Rugaber reported from Arlington, Virginia. AP writers Emily Wagster Pettus in Jackson, Mississippi, Mead Gruver in Cheyenne, Wyoming, and Summer Ballentine in Jefferson City, Missouri, contributed to this report.

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