A growing number of Republican-led states are rejectingmeant to help Americans during the pandemic, a move they say will help business owners who can’t find staff. But President Joe Biden said Monday that the enhanced federal benefits aren’t why people aren’t going back to work.
“The line has been because of the generous unemployment benefits, that it’s a major factor in labor shortages. Americans want to work. Americans want to work.” Biden said at the White House Monday. “I think the people claiming Americans won’t work even if they find a good and fair opportunity underestimate the American people.”
Anyone collecting unemployment who is offered a “suitable job” must take that job or lose unemployment benefits, Biden said, with several exceptions that mean people do not have to choose between their safety and a paycheck.
But officials in Montana, South Carolina and Arkansas have announced they will exit the program by the end of June. Montana Governor Greg Gianforte said the “vast expansion of federal unemployment benefits is now doing more harm than good.”
Arizona’s governor reinstated some requirements waived during the pandemic for unemployed workers to receive benefits. Vermont’s work search requirements for those receiving benefits were also reinstated as of this week.
And other states are pondering similar measures, in light of the Friday report from the Department of Labor showing that the economy added 266,000 jobs in April, far fewer than the 1 million experts expected.
On Sunday, Utah Governor Spencer Cox told CNN he thinks exiting pandemic-related unemployment benefits is a good idea, arguing the recent lower-than-expected jobs report is “what happens when we pay people not to work.”
But the president disagreed, saying Monday there are still 8 million fewer jobs than when the pandemic started. He called those benefits a “lifeline.” The American Rescue Plan passed in March extended $300 unemployment benefits through early September.
“We’ll insist that the law is followed with respect to benefits,” Biden said Monday. “But we’re not going to turn our backs on our fellow Americans.”
Several studies have examined the connection between benefits and unemployed people returning to work. In February, a study by JPMorgan Chase Institute found little evidence that increased benefits discouraged people from returning to the job. It found after Congress boosted supplemental insurance to $600 last spring at the onset of the pandemic, many jobless workers who received the money returned to work before the supplement expired.
Speaking at the White House press briefing Friday, Treasury Secretary Janet Yellen also claimed data does not support the argument that increased unemployment benefits are leading to a workforce shortage. She said when they looked at states and sectors where supplemental benefits were high, there weren’t lower job finding rates as the argument would suggest, and in fact it was the “exact opposite.”
A separate study by the Federal Reserve Bank of Chicago looking at unemployment insurance and job searching using data from 2013 through 2019 found those receiving unemployment benefits search more intensely for work over those not receiving benefits and once benefits drop off, search efforts drop steeply.
White House Press Secretary Jen Psaki said Monday “bigger factors” are keeping people home than increased unemployment benefits. She said vaccination rates, childcare and school reopenings all have an impact. And employers, she said, need to pay a “livable working wage.”