Jobs: Stability, Not Benefit Cuts
Terry H. Schwadron
Aug. 10, 2021
Last Friday’s job report had very encouraging words and a big warning about the unknowns of a coronavirus surge — little of which served to stem partisan reinterpretation of the figures as either promise of recovery or the downfall of America, depending on where one stands.
Like almost every other public issue, the jobs numbers are more a weaponizable tool for partisan promotion than a reflection of where we stand.
Caveats aside to remember that one month does not make a trend, the Bureau of Labor Statistics reported out a continuing increase in jobs, some 934,000 in June, outpacing the usual expectations, and dropping the nation’s unemployment rate a half-percentage point to 5.4%. Notable job gains occurred in leisure and hospitality, in local government education, and in professional and business services, which is no surprise.
These figures came as many Republican-leaning states prematurely cut off extended coronavirus-related unemployment benefits, and, so, the beat goes on about whether one side or the other was more correct about the effects of doing so.
The Washington Post decided to take a deeper look, and found that states that cut unemployment early actually are not seeing a hiring boom. But the news outlet did find a difference in who is getting hired. Basically, any teen hiring increases that had been reported in earlier months are giving way to workers 25 and older.
According to an analysis from website Indeed.com, which tracks employment listings, in a dozen Republican-voting states ending unemployment benefits early, job hunting has been muted, suggesting the policy may not be working as planned.
Rather, what seems to work is higher wages, more promises of worker safety and stability, the last of which is proving more ephemeral as mutations of the pandemic virus continue to battle against the effects of the vaccine-hesitant.
Clearly, that’s not what we’re hearing from supportive right-leaning news sites.
Studying the Numbers
The Post hired payroll processer Gusto to look more deeply at job trends. It found that same age split among small restaurants and hospitality businesses in states such as Missouri, among those states to end extra benefits early, and neighboring Kansas, where the benefits are still in effect. Kansas is seeing more response to restaurant opening from teens.
Overall, the offset between those over 25 and teens is about the same, suggesting that low-income jobs are having trouble making a lot of job progress.
Teen unemployment is at its lowest level since the 1950s, according to the BLS. Teenagers often don’t qualify for unemployment assistance.
The federal unemployment programs offering unemployed workers an extra $300 a week are coming to an end on Sept. 6 in any case. It has become standard Republican fare to insist that jobs are lagging because U.S. workers prefer the payments to actual jobs, not that employers don’t offer enough. Democrats consistently have argued that unemployment benefits — as well as student loan repayment waivers and eviction blocking — are a needed lifeline to help people still unable to return to work or those hoping to find a better job.
Employers are arguing that they lack the staff they need, but don’t want to get squeezed by rising worker pay.
One answer apparently has been to hire more teens who are less experienced and more willing to work for low wages.
In any event, early data suggests that cutting the benefits given to Americans who lost their jobs during the pandemic has not led to a big pickup in hiring. The 20 states that reduced benefits in June had the same pace of hiring as the mostly Democrat-led states, according to state-level data from the Labor Department. Survey data from the Census Bureau and Gusto’s small-business payroll data show similar results.
With covid numbers increasing again, issues like health coverage and affordable child-care are resurfacing.
Bottom line, in adjoining states, Missouri’s early end to unemployment is not boosting jobs any faster than Kansas’ opposite decision.
Reality vs. Slogans
Job searches are about 4% below the national average in Alaska, Iowa, Mississippi and Missouri, which stopped paying the federal benefits as of June 12, according to the recent analysis. What Missouri has seen is more “serious” job candidates, the report said, meaning more people who do follow up. They also have seen more candidates with less restaurant experience. Total employment in Missouri rose by 4,200 jobs in June with a slight increase in hospitality jobs, according to the Labor Department, while in Kansas, overall employment increased by 8,100 in June and was flat in the hospitality industry.
ResourceOne, a recruiting firm that works in Missouri and Kansas, said in Kansas, follow-up calls are ignored, while in Missouri, they do. That company also saw that restaurants are beginning to drop pay rates in Missouri as jobs are filled.
Unsaid in all this is that some industries — pharmaceuticals come to mind — do just fine in a pandemic, while those that are customer-dependent, like restaurants, do not. And there are tons of job categories that do not particularly lend themselves to Zoom work, including the performing arts, that are totally dependent on a stable and predictable return to work with understandable and enforceable rules, that are not even being tracked by monthly government measures.
More important to job seekers may be the resistance among Republican governors like those in Florida and Texas to allow local governments and schools to set local coronavirus-related standards like mask-wearing and vaccine requirements.
Clearly, the policies here are attuned to the marketplace, which, in turn, is listening to very conflicting and changing information about pandemic dangers. Some workers clearly are reluctant to return to jobs in which they encounter a lot of people. None of this addresses that, as CNBC reports, there are about a million more jobs out there than there are job seekers — a condition that should have us looking a ton more seriously at expanding our legalized immigration policies.
What is clear is that we need to pay more attention to the actual job hiring than to all the political banner-waving about the effects of cutting off unemployment benefits to force people back to work.
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