{"id":113527,"date":"2021-05-04T17:13:28","date_gmt":"2021-05-04T17:13:28","guid":{"rendered":"https:\/\/fin2me.com\/?p=113527"},"modified":"2021-05-04T17:13:28","modified_gmt":"2021-05-04T17:13:28","slug":"unemployment-benefits-are-not-creating-a-worker-shortage","status":"publish","type":"post","link":"https:\/\/fin2me.com\/politics\/unemployment-benefits-are-not-creating-a-worker-shortage\/","title":{"rendered":"Unemployment Benefits Are Not Creating A Worker Shortage"},"content":{"rendered":"

As the U.S. economy bounces back from the COVID-induced downturn, some employers say they\u2019re having a hard time finding workers. GOP lawmakers like Rep. David Rouzer (N.C.) <\/span>blame the safety net<\/span>.<\/span><\/p>\n

\u201cThis is what happens when you extend unemployment benefits too long and add a $1400 stimulus payment,\u201d Rouzer said on Twitter last week, posting a photo from a Hardee\u2019s that said it was closed for lack of staff. \u201cRight when employers need workers to fully open back up, few can be found.\u201d<\/span><\/p>\n

It\u2019s a dubious argument. Republicans said this same thing last year when Congress passed a big relief bill that added $600 per week to state unemployment benefits for four months.<\/span><\/p>\n

Democrats \u201care going to make the next four months impossible for small businesses to hire,\u201d Sen. Lindsey Graham (R-S.C.) said.<\/span><\/p>\n

\u201cThis bill creates an incentive for people to be unemployed for the next four months,\u201d Sen. Rick Scott (R-Fla.) said.<\/p>\n

Sen. Ben Sasse (R-Neb.) said the benefits would \u201cknock this nation still harder in the coming months by unintentionally increasing unemployment.\u201d<\/span><\/p>\n

At the time, millions of workers were losing their jobs every week, and nobody knew how bad things would get. But a few weeks after the initial lockdowns, businesses started recalling workers, millions returned to their jobs despite the extra benefits, and the jobless rate plunged. A spate of <\/span>academic studies<\/span> found the extra benefits <\/span>weren\u2019t stopping people from going back to work<\/span> after all.<\/span><\/p>\n

At $300 per week, the federal supplement is half what it was last year, but the criticism is twice as intense even though the previous doomsaying didn\u2019t pan out.<\/span><\/p>\n

\u201cPeople get paid more not to work than to work,\u201d Sen. Bill Cassidy (R-La.) told HuffPost, referring to the extra federal benefits. \u201cEconomists talk about that, but anecdotally, it\u2019s clear.\u201d<\/span><\/p>\n

It\u2019s true that the benefits amount to more than prior wages for some workers. It\u2019s just that the extra money <\/span>doesn\u2019t seem to have held workers back<\/span>.<\/span><\/p>\n

The unemployment complaint fits a broader Republican argument that Democrats under President Joe Biden are out to destroy the American work ethic with their proposals for new parent benefits and affordable child care.<\/span><\/p>\n

\u201cThink about what the Democrats have done,\u201d Rep. Kevin McCarthy (R-Calif.), the House Republican leader, tweeted over the weekend. \u201cThey have demonized work so Americans would become dependent on big government.\u201d<\/span><\/p>\n

While some employers may be struggling to hire for one reason or another right now, economists say generous unemployment benefits are not the cause.<\/span><\/p>\n

If demand for workers were exceeding supply, then the price of labor would be shooting up. But as Federal Reserve Chairman Jerome Powell said last week, overall wage growth <\/span>hasn\u2019t increased<\/span>. \u201cWe don\u2019t see wages moving up yet, and presumably we would see that in a really tight labor market,\u201d Powell said at a press conference. \u201cAnd we may well start to see that.\u201d<\/span><\/p>\n

For now, unemployment remains elevated, at 6%, compared to 3.5% before the pandemic, and there were 4 million more unemployed people in March 2021 than in February 2020. That data reflects people who are trying to find jobs, not those who have removed themselves from the workforce for a number of reasons, like a lack of child care. Yet some business owners still say there are no willing workers out there.<\/span><\/p>\n

Chef Andrew Gruel, owner of the Slapfish restaurant franchise, took to Twitter last week to declare \u201c<\/span>there are no employees available in California<\/span>.\u201d Gruel said his eateries were offering $21 per hour but couldn\u2019t find any takers. The top reason? \u201cThey are making enough on unemployment and would rather not work.\u201d<\/span><\/p>\n

William Spriggs isn\u2019t buying that. The chief economist at the AFL-CIO labor federation, Spriggs said it is \u201cself-evident\u201d that millions of people are trying to find work. Just because an employer hasn\u2019t found them yet \u2015 at the wages the employer is willing to pay \u2015 doesn\u2019t mean the workers aren\u2019t out there.<\/span><\/p>\n

Spriggs said the normal hiring networks that employers rely on were blown up by the pandemic. Some employers who received forgivable government loans were able to keep their workers on the payroll, but many firms simply let them go during lockdown. A year later many of those workers have taken other jobs, moved on or\u00a0<\/span>even died<\/span>.<\/span><\/p>\n

\u201cThey tend to recruit using networks \u2015 friends and relatives of people they already hire,\u201d Spriggs said. \u201cAnd the problem when we decided we would handle this by separating people from their employer is we broke up those networks.\u201d<\/span><\/p>\n

Workers understand that unemployment benefits do not last forever, Spriggs noted. The federal benefits will expire in the fall.<\/p>\n

He also said employers may be reluctant to pay the \u201cmarket clearing wage\u201d \u2015 the pay necessary to attract workers to all the available work, especially at a time when many jobs have become more difficult and stressful due to the pandemic. \u201cThen they get shocked when they try to expand and find out, \u2018I have to raise my wage,\u2019\u201d Spriggs said.<\/span><\/p>\n

(HuffPost tried to ask the Hardee\u2019s restaurant in Rouzer\u2019s tweet how much it had raised its starting pay to attract new workers, but no one answered the phone there.)<\/span><\/p>\n

Powell, for his part, acknowledged some employers may be struggling to find people who want to work for them. He said workers might be wary of virus exposure, or are running into other obstacles to returning to work. In other words, there\u2019s still a plague going on.<\/span><\/p>\n

\u201cOne big factor would be schools aren\u2019t open yet, so there are people who are at home taking care of their children that would like to be back in the workforce, but can\u2019t be yet,\u201d he said.<\/span><\/p>\n

In the aftermath of the Great Recession, many employers <\/span>lamented<\/span> that they couldn\u2019t find workers, even amid high levels of unemployment, prompting some commentators to proclaim a lack of skills among American workers. (The federal government wasn\u2019t boosting weekly jobless pay at the time.)<\/span><\/p>\n

\u201cBut what we saw was that labor supply generally showed up,\u201d Powell recalled. \u201cIn other words, if you were worried about running out of workers, it seemed like we never did, you know?\u201d<\/span><\/p>\n

The loudest complaints of a worker shortage now seem to come from restaurants, as more people resume their pre-pandemic dining-out habits thanks to widespread vaccination.\u00a0<\/span><\/p>\n

The National Restaurant Association, an industry lobbying group, says a variety of factors, not just benefits, contribute to hiring difficulties. \u201cWith fewer people in the workforce, the stimulus supports still in place, worker safety concerns, the need for caregivers to remain at home, and much greater competition with other industries for workers, operators are returning to pre-pandemic recruitment techniques for hiring,\u201d the association\u2019s Hudson Riehle said in a statement.<\/p>\n

Wages may have risen a bit faster than average this year in the hospitality industry, according to the government\u2019s <\/span>employment cost index<\/span>, though state minimum wage laws may have played a role. In general, restaurant work doesn\u2019t pay very much, with <\/span>median wages around $11 for servers in 2020<\/span>, compared to more than $20 across all occupations.<\/span><\/p>\n

Many restaurant jobs are also much different than they used to be, with more outside seating, for example, plus masks and new cleaning protocols. Not to mention new risks of getting sick. Some restaurant workers recently told Eater that they are willing to work \u2015 they just want pay that <\/span>reflects the hazards<\/span>.<\/span><\/p>\n

It\u2019s difficult to square the notion of a shortage of food service workers with the strong job growth in that industry, said Heidi Shierholz, former chief economist at the Labor Department now with the Economic Policy Institute. Dining and drinking establishments added <\/span>176,000 jobs in March, the biggest gain in any sector.\u00a0<\/span><\/p>\n

\u201cI\u2019m sure that labor supply is lower than it would be if we didn\u2019t have COVID, but that doesn\u2019t mean there\u2019s a labor shortage,\u201d Shierholz said.<\/span><\/p>\n

Cary Christiansen, of Topsfield, Massachusetts, worked as a varsity softball coach before the pandemic. She said the job hasn\u2019t come back yet, but summer league will start in June; she\u2019s also applied for another job as a dispatcher and is waiting to hear back.<\/span><\/p>\n

In the meantime, Christiansen, 55, said she and her husband have been able to pay their mortgage and make car payments thanks to unemployment benefits, but that other bills, including for health insurance, have gone unpaid. She\u2019s expanded her garden and started raising chickens, but still needs to find a job, and could wind up back in the restaurant industry, something she said she hasn\u2019t done since 1986.<\/span><\/p>\n

\u201cIf this other job doesn\u2019t pan out in the local community I\u2019m just going to go back to bartending,\u201d she said.<\/span><\/p>\n

RELATED…<\/h3>\n

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As the U.S. economy bounces back from the COVID-induced downturn, some employers say they\u2019re having a hard time finding workers. GOP lawmakers like Rep. 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