South Florida Sun-Sentinel (Sunday)

Hopes of a worker influx squashed

Fed aid cutoff hasn’t led to more people headed back to work

- By Christophe­r Rugaber and Casey Smith

INDIANAPOL­IS — Earlier this year, an insistent cry arose from business leaders and Republican governors: Cut off a $300a-week federal supplement for unemployed Americans. Many people, they argued, would then come off the sidelines and take the millions of jobs that employers were desperate to fill.

Yet three months after half the states began ending that federal payment, there’s been no significan­t influx of job seekers.

In states that cut off the

$300 check, the workforce — the number of people who either have a job or are looking for one — has risen no more than it has in the states that maintained the payment. That federal aid, along with two jobless aid programs that served gig workers and the long-term unemployed, ended nationally Sept. 6. Yet America’s overall workforce shrank that month.

“Policymake­rs were pinning too many hopes on ending unemployme­nt insurance as a labor market boost,” said Fiona Greig, managing director of the JPMorgan Chase Institute, which used JPMorgan bank account data to study the issue. “The work disincenti­ve effects were clearly small.”

Labor shortages have persisted longer than many economists expected, deepening a mystery at the heart of the job market. Companies are eager to add workers and have posted a near-record number of available jobs. Unemployme­nt remains elevated. The economy still has 5 million fewer jobs than it did before the pandemic. Yet job growth slowed in August and September.

An analysis of state-bystate data by The Associated Press found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than they did in the 25 states that cut off the payment early, most of them in June. The $300a-week federal check, on top of regular state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

An earlier study by Arindrajit Dube, an economist at University of Massachuse­tts, Amherst, and several colleagues found that the states that cut off the $300 federal payment saw a small increase in the number of unemployed taking jobs. But it also found that it didn’t draw more people off the sidelines to look for work.

Economists point to a range of factors that are likely keeping millions of former recipients of federal jobless aid from returning to the workforce. Many Americans in public-facing jobs still fear contractin­g COVID-19, for example. Some families lack child care.

Indeed, the pandemic appears to have caused a reevaluati­on of priorities, with some people deciding to spend more time with family and others insistent on working remotely or gaining more flexible hours.

Some former recipients, especially older, more affluent ones, have decided to retire earlier than planned. With Americans’ overall home values and stock portfolios having surged since the pandemic struck, Fed officials estimate that up to 2 million more people have retired since then than

otherwise would have.

And after having received three stimulus checks in 18 months, plus federal jobless aid in some cases, most households have larger cash cushions than they did before the pandemic. Greig and her colleagues at JPMorgan found in a study that the median bank balance for the poorest one-quarter of households has jumped 70% since

COVID-19 hit. A result is that some people are taking time to consider their options before rushing back into the job market.

Graham Berryman, a

44-year-old resident of Springfiel­d, Missouri, has been living off savings since Missouri cut off the $300a-week federal jobless payment in June. He has had temporary work reviewing documents for law firms in the past. But he hasn’t found anything permanent since

August 2020.

“I’m not lazy,” Berryman said. “I am unemployed. That does not mean I’m lazy. Just because someone cannot find suitable work in their profession doesn’t mean they’re trash to be thrown away.”

Exacerbati­ng the labor shortfall, a record number of people quit their jobs in August, in some cases spurred by the prospect of higher pay elsewhere.

In Wyoming, fewer people are in the workforce now than when the state cut off all emergency jobless aid. Fear of contractin­g COVID19 likely discourage­d some people from seeking jobs, Wenlin Liu, chief economist at the state Economic Analysis Division, said last week.

Wyoming has one of the lowest vaccinatio­n rates in the country, he noted, and has been a COVID-19 hotspot since late summer.

The surge in infections, Liu said, may be causing some parents to keep their children home.

State Rep. Landon Brown, a Republican, defended the cutoff of federal unemployme­nt aid.

“Wyoming,” Brown said, “is not interested in continuing to allow the federal government to keep people away from jobs, paying them as much to stay home in some cases as to go and get a job.”

Mississipp­i ended all emergency jobless aid on June 12. Yet it had fewer people working in August than in May.

In Tupelo this month, a job fair attracted 60 companies, including a recruiter from VT Halter Marine, a shipbuilde­r located 300 miles south. About 150 to 200 job seekers also attended, fewer than some businesses had hoped.

 ?? ROGELIO V. SOLIS/AP ?? Ariel Jones, a United Parcel Service human resources intern, hands out an informatio­n sheet during a job fair Oct. 12 in Tupelo, Mississipp­i.
ROGELIO V. SOLIS/AP Ariel Jones, a United Parcel Service human resources intern, hands out an informatio­n sheet during a job fair Oct. 12 in Tupelo, Mississipp­i.

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