U.S. companies are hiring, at a historic pace, nearly 11 million jobs in July, according to the latest government data. However, more than nine million people were receiving improved unemployment benefits from the reduction of these benefits due to the pandemic, an apparent disconnect that has killed lawmakers, policy experts and business people.
It all comes down to this: if there are more job opportunities than unemployed workers, why aren’t more people coming out of unemployment benefits? And why companies struggle to find employees to wait for tables, receive orders and drive buses? The number of job openings in the United States rose to an all-time high of 10.9 million at the end of July, up from 10.2 million in June, according to data released Wednesday by the Department of Labor’s Job Openings and Labor Turnover Survey (JOLTS).
“For economists, this is a big mystery: if companies try to expand and there are a lot of unemployed workers, in normal times we would see a lot of employment growth,” said Luke Pardue, economist de Gusto, a company that manages payroll and other services for small and medium-sized businesses. “This match is not happening”.
Many business owners and dozens of Republican governors have blamed the improved unemployment benefits for keeping workers on the sidelines. In his view, too many unemployed workers opted to raise an extra $ 300 in weekly unemployment benefits instead of finding work, prompting 25 Republican-led states to cut unemployment benefits soon in an effort to boost growth. pushing workers to withdraw from unemployment benefits.
Yet that has not happened, with several economic studies finding states that reduced aid to the pandemic without early employment it did not experience stronger job growth than those who maintained the aid until Labor Day weekend, when federal benefits expired. This suggests that there are other factors in addition to unemployment benefits, with economists pointing to a complicated mix of changing priorities for workers and concerns about rising COVID-19 infection rates. as the highly contagious Delta variant spreads across the country.
“The big factor for most job seekers is still the pandemic,” noted Nick Bunker, research director at Indeed Hiring Lab. “Concern about the coronavirus will make people less willing to immediately take up a job than in the past.”
Of course, the latest data on job offers comes from the end of July, before the Delta variant caused an excessive size. peak of infections across the country. The latest increase in cases may affect the image of job offers in August, when employment grows slowed abruptly amid an increase in infections, although JOLTS data will not be released until October, economists noted.
The end of pandemic unemployment
The disconnect between job opportunities and unemployed workers is only growing more urgently, as the increased unemployment benefit ended on 6 September. 9.1 million people from the programs. Some of these workers are likely to return to the workforce, with Goldman Sachs analysts estimating that the expiration of profits could increase employment growth by 1.5 million new positions from September to the end of the year . But health issues may outweigh financial considerations, they added.
“Our findings also suggest that many workers who have left the workforce since the start of the pandemic did so for non-financial reasons, such as concern about COVID, and may be slow to return to the workforce. even after [unemployment] the benefits end, ”analysts wrote.
This means that employers can continue to struggle to find qualified people to fill these 10.9 million vacancies, at least in the short term. This is due to the fact that the economy and public health are increasingly linked: when workers do not feel safe returning to work and customers reduce spending due to fears of COVID, this generates a drag on the economy, Pardue said.
“This uncertainty is really what will slow down the economy,” he added. “Many companies are wary of expanding if cases increase or if we see more restrictions or stoppages in the winter. What we will see in the coming months is not motivated by unemployment [aid] but by the pandemic. “
There are already indications that workers are out of the labor market due to COVID concerns. About 3.2 million Americans told the census office that they did not work between August 2 and 16 due to fears of COVID infection, 30% more than the previous census voting period during the last two weeks of July.
Texas: “I lost everything we had”
Meanwhile, several unemployed workers in Texas, where Gov. Greg Abbott cut aid to work due to the pandemic on June 26, told CBS MoneyWatch that the end of support made their lives more economically precarious without help them secure work.
“When [unemployment benefits] ended soon, we basically lost everything we own, ”said Kamilla Mills, 59, of Denison, Texas, who sold posters for major corporate events and school events before the pandemic, a business that has dried up during the crisis.He lost his home, and now lives in a motel, he said.
Mills ’job search has generated customer service openings that pay about $ 10 an hour, which she says are not enough to cover living expenses such as rent, which has risen sharply in her region since beginning of the pandemic. And he said it’s hard to even score an interview, considering a number of potential hires flooding the market with their resumes.
Before the pandemic, he added, “I had a comfortable life.” Now, when asked to describe her financial situation, she replied, “One step away from becoming homeless.”
Another Texas worker, Ashley Frankum, 34, of Aransas Pass, said her husband recently found a job as a cook after becoming unemployed. But she is still looking for a job after being fired from her job as a behavioral referral specialist for a company. who handled mental health coverage claims, and the couple is currently battling eviction from their home.
“Without jobs in the area, you no longer have or are qualified,” he said.
Frankum said he doesn’t understand why Abbott cut aid early, as it came from federal funding instead of state coffers. “If we pay federal taxes and the federal government offers resources to not fight, I’m not sure why it would block the way,” he said.
Quitting smoking is on the rise
Another cause of the disconnect between job offers and unemployed workers could be due to a mismatch in skills between what employers are looking for and what employees have to offer, Pardue noted. Companies are moving more and more towards technology and automation than before the pandemic and may be looking for employees with these skills or a track record of adapting to them.
And some workers continue to struggle with daycare and schools, mostly because COVID outbreaks cause quarantine and remote schooling for students across the country. This allows parents of young children to return to work, given the uncertainty about their children’s schedules over the coming months.
Of course, there are some benefits to the current disconnect, at least for workers. Labor market dynamics provide more power to employees, with nearly 4 million people leaving their jobs in July, up from 3.9 million in June, according to the latest JOLTS data. This suggests that many Americans have enough confidence in their prospects to look for something new and that pays better.
“Waivers are high by historical standards, as workers may be concerned about rising cases of covides or finding better jobs,” said Elise Gould, an economist at the Institute for Economic Policy. left, in a blog post.
“With reports from the Associated Press.”