A disappointing April jobs report following months of reported hiring struggles among businesses is fueling a Republican push to end enhanced unemployment aid programs extended by President Biden in March.
GOP governors and lawmakers are taking steps to scrap a $300 weekly boost to jobless benefits and other programs created at the onset of the pandemic that expanded aid to millions of unemployed Americans.
Republicans, who have long been critical of generous jobless benefits, are seizing on April’s lackluster employment gain as proof that pandemic-related programs are hindering what should be a booming recovery.
Sen. Roger Marshall (R-Kan.) said Friday he will introduce a bill to phase out the $300 weekly boost, set to expire in September, by the end of the month. The U.S. Chamber of Commerce also called for the end of the $300 supplement in light of the jobs miss.
The Republican governors of Montana and South Carolina had already announced plans to end their states’ participation in pandemic jobless aid programs, and other GOP-controlled states are expected to follow suit.
“Even though President Biden inherited a strong economic recovery, it’s clear his job-killing policies are hurting working families and Main Street businesses,” said Rep. Kevin Brady (R-Texas), ranking member on the House Ways and Means Committee.
Critics of enhanced unemployment aid have grown increasingly alarmed about its potential impact on the recovery after businesses across the country reported trouble hiring workers.
Economists, however, say it’s not that simple.
While some unemployed workers may be receiving more money through jobless aid than the median wage in their state, many economists say that dynamic is not the only or even the main reason why businesses are having trouble finding applicants.
“The case that labor shortages are slowing jobs growth is stronger today than it was yesterday, however the jury is still out on how much enhanced unemployment benefits are a contributing factor,” Daniel Zhao, senior economist at Glassdoor, said in an email.
“Ultimately, the pandemic is the largest single factor driving these labor shortages. If not for the pandemic, we would have millions of unemployed workers competing for jobs that are in short supply,” Zhao added.
The onset of the COVID-19 pandemic roiled the U.S. labor force in unprecedented ways, evaporating more than 21 million jobs in two months. While the U.S. has since regained roughly 12 million jobs, millions of Americans who were forced out of the labor force have not yet returned for pandemic-related reasons.
Just more than half of all U.S. adults have gotten at least one dose of a COVID-19 vaccine as of April, according to a Kaiser Family Foundation poll released Thursday. That means many working-age Americans — potential colleagues and customers — have not yet been vaccinated.
Roughly 5 million U.S. women are also unable to go back to work because of a child in need of care, a number difficult to whittle down without adequate school and daycare openings.
“Childcare needs and avoiding health risks are challenges we’ve seen throughout the pandemic that are not easily solved by one-time bonuses or even higher wages,” Zhao said. “Therefore any pre-crisis strategies that typically help attract workers may not be as effective during the pandemic.”
President Biden and administration officials expressed confidence that job creation would pick back up as vaccinations accelerate, childcare options reopen, and the economy works out the kinks of the recovery.
“It may be bumpy from month to month for a variety of factors,” Treasury Secretary Janet Yellen said at the White House. “One should never take one month’s data as an underlying trend.”
Yellen also argued that if enhanced unemployment benefits were suppressing hiring, states with lower median wages would have higher rates of joblessness since the additional benefits would make a greater income difference.
“In fact what you see is the exact opposite,” Yellen said. “We have had a very unusual hit to our economy, and the road back is going to be somewhat bumpy.”
Congressional attempts to end expanded jobless aid are destined for failure without clearer evidence that workers have been disincentivized from coming back. But state autonomy over unemployment insurance means Republican governors can pull out of pandemic programs on their own, raising concerns among those who support generous benefits.
“Enhanced jobless benefits helped save the economy by ensuring millions of families could pay rent and buy groceries during this crisis. Cutting off all benefits while millions of workers have not yet been able to return to work could cause tremendous financial pain and sabotage our economic recovery,” said Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, in a Friday statement.
And even some right-leaning economists have urged caution before making major policy changes based on one month of data and anecdotes.
“The labor shortage has multiple plausible causes, many of which are highly understandable and not remotely blameworthy,” tweeted Alan Cole, senior economist for Republicans on the Joint Economic Committee.
“But the fact that there’s multiple plausible causes makes it harder to argue about any specific one.”