Chamber calls on states to scrap $300 boost to jobless benefits

The U.S. Chamber of Commerce called Friday for states to stop offering a $300 weekly boost to unemployment insurance payments in the wake of April’s below-expectations jobs report.

The influential business trade group argued that the additional support for jobless workers is preventing Americans from seeking employment and should be pulled back before it is set to expire in September.

“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” said Chamber Executive Vice President Neil Bradley.

“We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions poses to our economic recovery from the pandemic.”

The Labor Department reported Friday that the U.S. added just 266,000 jobs last month, well below the 1 million-plus gain projected by economists. The significant undershoot came after months of businesses across the U.S. reporting difficulty hiring workers, which some have attributed to enhanced unemployment benefits extended by President Biden in March.

“One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit. Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working,” Bradley said.

The Republican governors of Montana and South Carolina announced earlier this week that their states will stop offering the $300 boost and several other expanded jobless aid programs in June, and other GOP-led states are expected to follow suit after April’s report.

Even so, economists have challenged the notion that more generous jobless benefits are the biggest obstacle for businesses struggling to hire workers.

Employment in the leisure and hospitality sector, one of the biggest sources of labor shortage anecdotes, grew by 330,000 jobs in April. 

Labor force participation also rose 0.2 percent, an encouraging sign after it plunged at the start of the pandemic, but remains restrained likely due to lingering health concerns and parents being forced to care for children who are unable to return to in-person school or day care.

“The economy has proven easier to put into a pandemic-induced coma than to awaken. Employers and employees remain skittish after a year of false starts,” wrote Diane Swonk, chief economist at Grant Thornton, in a Friday analysis.

“We need to see a move closer to herd immunity for everyone to feel reassured that when we reopen, we will stay open.”

Biden economic officials and Democratic lawmakers have also argued that one lackluster jobs report is not enough evidence to support pulling back jobless aid.

“Our economy is still missing about 8 million jobs from before the pandemic took hold. It is important to keep in mind that month-to-month job growth can be volatile,” wrote Cecilia Rouse, chair of the White House Council of Economic Advisors, in a Friday blog post.

Rep. Don Beyer (D-Va.), chairman of the Joint Economic Committee, argued that the jobs data “underscore the uncertainty that still exists as a result of the economic damage caused by the pandemic.”

“Progress is being made, but it is clear that we have a long way to go before our economy is back on solid ground,” he said.