A weak jobs report on Friday added fuel to efforts in Florida and elsewhere to reduce access to unemployment benefits, which some state and industry leaders say has prevented people from returning to the workforce.
The country is in a striking situation with millions of unemployed and companies unable to find enough people to hire for wages. The inequality has prompted several states, including Florida, Montana and North Carolina, to tighten reporting requirements to receive unemployment benefits and close payments to people who reject work.
In some cases, states end access to federal pandemic unemployment benefits. The U.S. Chamber of Commerce called for an immediate end to a $ 300-a-week federal supplement. “The disappointing job report makes it clear that paying people not to work dampens what should be a stronger job market,”
President Joe Biden and Finance Minister Janet Yellen defended the job report – which showed employers added 266,000 jobs lower than expected in April – and said other factors such as health concerns and school closures explained that the lack of a job report kept people out of the workforce.
“I know some employers have trouble filling jobs. But what this report shows is that there is a much bigger problem,” Biden said. “Today’s report highlights, in my view, just how important the actions we take are: control for people in pain, support for small businesses, childcare and reopening of schools, support for helping families put food on the table, “Said Mr. Biden. “Our efforts are starting to work, but the climb is steep and we still have a long way to go.”
Ms Yellen said a number of sectors were suffering from supply chain problems, including the lack of semiconductors pushing US carmakers to use chips to control everything from brakes to airbags. “I do not think the addition to unemployment benefits is really the factor that makes a difference,” she said.
Last year, when the Covid-19 pandemic began and millions were laid off, many states suspended the requirement that people seek work while receiving jobless benefits. Today, about half of the states have restored their job search conditions for these rules, according to the job site ZipRecruiter.
North Carolina reinstated its job search requirements in March and in April published a tip sheet for employers explaining how to report people who reject jobs. In Florida, Republican Gov. Ron DeSantis said he planned to reintroduce a requirement that unemployment benefit recipients regularly update their job search efforts.
COMPANIES PROVIDING INCENTIVES TO LEARN WORKERS WITH COVID-19 STATE OPENINGS
People can lose their unemployment benefits if they do not meet the requirements. In the first quarter of this year, nearly 407,000 Americans were denied state benefits for not seeking work or certifying that they were available for work, according to Labor Department data. About 6,000 people were denied benefits for refusing what their states considered appropriate jobs.
The governors of Montana and South Carolina said this week that they would stop offering their residents an additional $ 300 a week federal benefits several months before this program ends in September. Republican Gov. Greg Gianforte of Montana said residents would instead be eligible for a $ 1,200 “return to work bonus” if they received unemployment benefits per capita. May 4 and then took a job and completed at least four paid weeks of work.
“I hear from too many employers across our state who cannot find workers,” Gianforte said. “Almost every sector of our economy is facing labor shortages.”
Trade groups, especially local restaurant associations, have lobbied for such changes. In Michigan, the state is tightening its oversight later this month, but lawmakers should act immediately, said Justin Winslow, president of the Michigan Restaurant & Lodging Association. Eric Terry, president of the Virginia Restaurant, Lodging & Travel Association, said he began pushing the state several weeks ago to do what it could to bring people off the sidelines. A restaurant in the state pays potential hires $ 50 to show up for an interview, Terry said.
Virginia had loosened the requirement that those who are unemployed conduct two job interviews a week last year during the pandemic. The state said it would reintroduce the requirement in the first week of June and recipients must report their searches weekly to continue receiving funding.
“Unemployment benefits are probably the biggest single issue,” Terry said of the lack of labor for restaurants and other employers in the hotel industry. “It’s a difficult process to get people to come in themselves to interview.”
Zach Schiller, research director at Policy Matters Ohio, a progressive think tank, said data contradicts the perception that lots of Americans prefer to live on unemployment insurance rather than find jobs. “The idea that we have a large number of people sitting and collecting unemployment benefits instead of going to work is a fallacy,” he said.
YELLEN DOWNPLAY FEAR $ 300 WORK SOLUTION PAYS THE INJURY JOB MARKET, SAYS CLOSED SCHOOLS A FACTOR
Federal data for the quarter ending Dec. 31 showed that 43% of unemployed Americans were exhausting their state benefits, while 57% who had received benefits returned to work or stopped claiming benefits before their eligibility ran out. In Ohio, about 21% of the unemployed spent their full 26 weeks on government benefits, according to the Labor Department.
Republicans opposed the $ 1.9 trillion Covid-19 stimulus package passed by Democrats earlier this year, giving $ 300 a week in additional jobless benefits until September. Republicans opposed the bill, saying it was fraught with deficit expenditures unrelated to the pandemic.
“Why is anyone surprised that the job reports did not live up to expectations?” Senator Marco Rubio (R., Fla.) Tweeted Friday. “I hear from #smallbusiness every day that they can not hire people because the government pays them not to go back to work.”
Democrats disagreed, saying the weak numbers reflected broader deficits in the economy. The $ 1.8 trillion childcare, education and paid leave proposal proposed by Biden last week proposes changes to the unemployment insurance system, including the creation of auto-triggers for more robust economic-based benefits.
“Anyone who points to the availability of unemployment benefits as the root cause of these cramped numbers ignores the clear evidence that workers throughout the pandemic returned to work regardless of the economic cost or health risk,” said House Ways and Means Committee chairman Richard E. Neal (D., Mass.).
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More people are joining the workforce, which may relieve some of the tightness of the labor market. In April, 430,000 people came out of the sidelines, increasing the workforce to 61.7%, up from 60.2% the year before.
Restaurant chain owners say their inability of full staff to make longer wait times at their thoroughfares and past closures at night, leading to lost sales. Independent restaurants limit the tables they can accommodate at customers due to lack of servers. The National Restaurant Association is pushing Congress to allow for more legal immigration as operators seek to hire tens of thousands of workers.
Wingstop Inc. CEO Charlie Morrison blamed high prices for chicken wings and the inability of the chains’ full-time suppliers while the federal benefits continue. It also drives up the starting salary, he said.
“The stimulation has a big impact on this,” Mr. Morrison. “It is difficult to find people to staff the job.
–Alex Leary and Andrew Restuccia contributed to this article.