Congress approved a $300 weekly unemployment boost during the pandemic. Now employers say they can’t find workers, but are the benefits to blame?
There are plenty of anecdotal examples to back up each side. But just what is happening in the labor market — and the effect of the contentious $300 weekly federal boost extended by Congress in the most recent March stimulus package — remains unclear.
About half of economists say they are uncertain whether the supplement is a major disincentive for lower-wage workers, according to a survey published last week by the Initiative on Global Markets at the University of Chicago’s Booth School of Business. Some 28% believe that it is, while 16% feel it is not.
The $300 boost, as well as two other pandemic programs that provide benefits to independent contractors and others who don’t typically qualify and to those who’ve run out of their regular state benefits, is scheduled to last until early September in the states that are continuing the programs.
What is known is that the extra federal payment means that some people are making more on unemployment than they did at their jobs. Estimates range from about 25% to around 40% of laid-off workers being in this situation.
What the jobless say
Though there were a record-high 8.1 million job openings, as of March, some workers say many of these positions pay too little or are too far away for them to afford to accept or that the postings require skills or certifications they don’t have.
And still others continue to have difficulty securing full-time childcare because their providers may have shuttered or limited enrollment or because their kids are still attending school remotely.
Plus, the pandemic continues to weigh on some Americans, despite the increase in vaccinations and drop in cases. Some 3.8 million people said they are not working because they are concerned about getting or spreading the virus — which is down from 4.2 million in April, according to the Census Bureau.
What businesses say
Employers, who are eager to staff up as the economy reopens, say that they can’t find enough workers — in part because the generous supplement is keeping people on the sidelines.
“It’s not the reason, but it absolutely is a reason,” said Neil Bradley, chief policy officer at the US Chamber of Commerce, which has called for states to end the pandemic program.
There’s already some early evidence that the looming end to the supplement is having some intended effect, Bradley told CNN. He pointed to a report from Indeed that showed job search activity on the site increased on the day a state announced it would end pandemic benefits early. However, the bump vanished by the eighth day.
The $300 weekly supplement likely had “small but noticeable effects” on job search and worker availability in the first four months of this year, according to a recent study by the Federal Reserve Bank of San Francisco.
About 1 in 7 workers are not taking job offers because of the enhancement, according to study co-author Rob Valletta, associate research director at the San Francisco Fed.
The finding is an extrapolation from earlier research on last year’s $600 boost. But ending the current supplement likely won’t help employers a great deal, Valletta told CNN.
“Removing it is not going to increase employment growth by much,” he said of the $300 enhancement.
