Are high unemployment benefits responsible for low jobs report?
- The Bureau of Labor Statistics reported a 6.1% unemployment rate for April 2021 which is “down considerably” from the high of 15 percent the previous year. However, the numbers are still higher than pre-pandemics numbers at 3.5 percent.
- The Americans Rescue Plan initiated in March was approved to send workers an additional $300 in benefits per week until September 6. Unemployment assistance was given a boost from 50 weeks to 73 weeks.
- Some states like Montana and South Carolina opted out of the unemployment benefits to boost their states’ labor shortage. Governor Henry McMaster said, “This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits.”
- As of May 10, 2021, 261,599,381 vaccines have been administered to Americas; 46% have at least one dose while 34.8% have been fully vaccinated.
While there may be a small sector of society comfortable staying at home and living off of government benefits indefinitely, most people want to find meaningful work. Prior to the pandemic, the economy wasn’t working for many people; low wages and expensive childcare made working simply too expensive. Anecdotal stories of people using this time and assistance to better themselves and look for more meaningful work are abundant. Stagnant wages and dead-end jobs are the real culprits here, not desperately needed pandemic assistance. Simply because positions are becoming available as the economy opens back up does not mean that they can be filled immediately.
While it’s tempting to think about work only in terms of salary, which hypothetically could be replaced by aid, the reality is that we receive a wide range of benefits from employment that cannot simply be replaced by temporary assistance. This proves that people are forgoing employment for other reasons than the availability of benefits. Many of us get our healthcare through our employers, as well as retirement savings through company-sponsored 401Ks. People receive childcare, gym memberships, retail discounts, and other ancillary benefits in addition to their salaries. Many people are forgoing all of these additions, showing that government benefits aren’t the main factor.
Finally, there is still an active pandemic taking place, and the threat of contracting a potentially life-threatening illness is keeping some people on the sidelines, particularly those in high-risk categories. A little less than half of the population still has not received a single vaccine dose, and those individuals may have real concerns about public safety.
Though it was originally necessary for affected workers to receive unemployment throughout the pandemic, this has created a problem where many are reluctant to return to work and forfeit their current benefits, resulting in a lower than anticipated April jobs report. Unemployment benefits have been substantially high throughout the nation. Qualifying individuals receive approximately $500-$700 per week in benefits, including an additional $300 under the American Rescue Plan Act.
In some cases, individuals receive more collecting unemployment than from working. While others may be eager to return to the workforce in the near future, some might consider holding off doing so until pandemic-related unemployment benefits end in September. Aggravating the issue is the fact that as many Americans have received unemployment at some point during the pandemic, even more have received stimulus checks. This adds to a sense of financial security that causes many to remain unemployed.
With society returning to normal, lucrative unemployment is surely the main cause for the unavailability of workers, as concerns surrounding the virus itself should be decreasing with vaccines available. Some states have even announced they will soon cancel the additional $300 benefit amount to combat labor shortages.
Unemployed individuals cannot be solely blamed for being unmotivated to work. In many states, those receiving unemployment benefits have not needed to prove that they are actively seeking employment, as is usually the requirement. This requirement is set to change soon in several states, but it's easy to see why so many have not returned to work: their government has provided them a means to receive a comfortable income without any urgency to find a job.