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September employment figures released on Friday suggest that GOP governors who decided to end federal unemployment benefits fell short of their goal of reviving the economy from its pandemic-era quagmire – which is what experts predicted months ago.
According to the Bureau of Labor, employers reported 194,000 new jobs, a far cry from the 500,000-plus expected by analysts. The labor force has also declined by 183,000 since August, although unemployment edged down from 5.2% to 4.8%.
President Biden rebuffed claims that the numbers indicate a serious level of contraction, pointing out that the unemployment rate has not fallen below 5% since the start of the pandemic. Biden also noted that average monthly job growth is still around 600,000 under his leadership, suggesting the administration is slowly but steadily bringing the economy back to health.
“The monthly total has rebounded, but if you look at the trend it’s solid,” Biden said.
Recently, the debate around monthly job growth has translated into clearly political lines, as Salon’s Brett Bachman reported in May, when the Labor Department released a similar batch of jobs figures. less than stellar.
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Back then, pundits and conservative politicians aggressively pounced on unemployment benefits, suggesting with little evidence that Americans were no longer motivated to work, causing a massive ‘labor shortage’. . In the months that followed, more than two dozen Republican governors decided to end their federal unemployment programs, promising an economic rebound in return.
This week’s numbers, however, appear to work against such promises.
Last month, Axios reported that states that cut benefits saw about half of the job growth enjoyed by states that maintained the program. Neil Irwin, senior economic correspondent for the New York Times, echoed a similar sentiment this week, citing “no increase in labor force participation” despite “labor shortage issues that many groups companies “have provoked.
In an analysis on Friday, Matt Bruenig, founder of the People’s Policy Project, highlighted the large gap between the number of people who lost their unemployment benefits in September (around 8 million) and the number of people who found work ( approximately 194,000).
“194,000 jobs is less than 3% of the people who were taken off unemployment insurance lists in September,” Breunig said. “At this rate, it would take 3.5 years for the added jobs to equal the number of people who lost their UI benefits in the event of a pandemic. “
It’s unclear exactly why September’s numbers fell so far below analysts’ expectations, but many have speculated that the pandemic continues to dampen economic growth. Over the summer, many schools were scheduled to reopen in September, but a further rise in COVID-19 cases dashed those hopes, potentially leading to a wave of economic cutbacks.
“All the evidence points to a pandemic [unemployment benefits] not being the primary factor, ”Nick Bunker, director of economic research for North America at the Indeed Hiring Lab, told CNBC.“ The best guess at the moment is that it’s the pandemic itself. “
According to NPR, the number of jobs may be artificially depressed due to sudden seasonal changes in hiring schools.
Some analysts have found that cutting benefits may even have contributed to the underperformance of the labor market.
Peter McCrory, economist at JPMorgan Chase Bank, wrote that “the loss of benefits is associated with a modest decline in job growth, income growth and labor force participation.”
Others have speculated that workers are readjusting their work priorities amid the pandemic. According to a Pew poll, about 66% of unemployed Americans have seriously considered changing jobs.
“It’s not just money, sitting on both sides of the ladder,” Melissa Swift, global leader in workforce transformation at consultancy Korn Ferry, told Axios, citing the challenges of working with an understaffed team, juggling parenthood and work, or being the only person of color in the workplace. “We have essentially depleted the global workforce in the last year or so. One of the ways people deal with burnout is by changing employers.”
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