Unemployment benefits ended, but hiring did not increase in September

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The labor force shrank last month for the first time since May, signaling that more and more people are choosing to sit on the sidelines and not actively look for work, according to the federal employment report released on Friday.

“If unemployment benefits were the engine of labor market dynamics, you wouldn’t have seen this effect,” said Gordon Gray, director of fiscal policy at the American Action Forum, a right-wing think tank .

The jobs report, which disappointed on several fronts, came at a time when the country was grappling with both high levels of coronavirus cases and a return to school for millions of children.

Have you lost your unemployment benefits in the event of a pandemic? Tell us about it.
While experts caution against drawing conclusions from one or two months of data, September’s jobs report provides even more evidence that pandemic unemployment benefits don’t have much contributed to the country’s labor shortage. Other factors – including childcare issues, virus fears and workers’ reassessment of their life goals – play a major role in making people stay home, economists said.
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The latest report undermines the argument made by many Republicans and business owners that the country’s economic recovery was being held back by a federal safety net they deemed too generous.

The governors of 26 states – all but one Republican – have chosen to end at least one of the three pandemic unemployment programs in June or July, saying it would help solve staff shortages. (Courts in two states subsequently required officials to maintain benefits until early September.)
However, after that, employment did not grow much faster in those states, previous studies and government data revealed.

Historic benefit increase ends

The unprecedented expansion of the nation’s unemployment system by Congress came to an end in early September, nearly 18 months after lawmakers came to the aid of millions of Americans who lost their jobs at the start of the pandemic.

A key part of the relief effort was a weekly federal supplement for those out of work. Initially, the unemployed received a weekly Increase of $ 600 from April to July 2020. Congress then revived the improvement in late December, but reduced it to $ 300 per week.

Lawmakers also created two other measures to help the unemployed when the coronavirus hit. The Pandemic Unemployment Assistance Program provided payments for freelancers, self-employed workers, independent contractors and some people affected by the epidemic, while the Emergency Pandemic Unemployment Compensation Program extended payments for those who exhausted their regular state benefits.

The expiration of the programs last month left more than 8 million people without any unemployment benefits, while 2.7 million others lost the federal weekly boost of $ 300 but continued to receive payments from state, according to Century Foundation estimates.

They joined the estimated 2.7 million Americans who were deprived of some or all of their benefits in states that chose to end at least one of the programs earlier.

Many business owners struggled for months to hire more workers, citing generous compensation as the main cause.

“A lot of people wanted these benefits reduced because they thought it would make it easier to hire at lower wages. But the baseline data doesn’t tell us that is what happened,” Aaron said. Sojourner, labor economist at the University of Minnesota. of the September employment report.

Other companies offer signing bonuses, perks, iPhones, and other incentives, as well as higher pay. But the mismatch between job vacancies and available workers persists.

Hiring is expected to increase

The expiration of benefits could indeed lead to more people accepting jobs, but that will take time, experts said.

Although there was a record 10.9 million job postings in July, the economic recovery has slowed a bit in recent months, with the latest increase in Covid-19 cases prompting consumers to withdraw. The number of cases, hospitalizations and deaths are finally falling again.

In addition, some parents continue to struggle with childcare issues and some workers fear taking positions where they must deal with the public.

Nearly 5 million people said they were not working because they were caring for out-of-school or daycare children, and 3.2 million said they feared contracting or spreading the virus, according to the census household pulse survey carried out in the second half of September. .

Others just need the time to find the right job.

“Of course people want to go to work and they go back to work,” said Andrew Stettner, senior researcher at the Century Foundation. “But it’s not something that happens quickly.”

While Congress is not expected to revive pandemic programs, lawmakers could channel more funds to help laid-off workers return to the workforce through training, internships, employment supports and employment. other measures, he said.

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