Federal unemployment payments of $300 a week have served a necessary function throughout the coronavirus pandemic, but evidence suggests they have outlived their usefulness. The supply and demand of economics can be complex, but here is the situation in simplistic terms: Jobs are available, and too many people are unwilling to take them.
The pandemic has played havoc with the economy, leading many businesses to close either temporarily or permanently. Robust government support — including help for businesses through the Paycheck Protection Program and help for displaced workers through increased unemployment payments — has helped keep a recession from turning into a depression.
But putting people to work is the key to overcoming the downturn, and policymakers now should incentivize employment.
On Tuesday, the federal Job Openings and Labor Turnover Survey indicated that U.S. employers posted a record number of available jobs in March. Job openings rose nearly 8 percent to 8.1 million — the highest number on records that date to December 2000. Yet overall hiring that month rose less than 4 percent, to 6 million.
This information follows a jobs report last week that was far weaker than expected. Employers in April saw a net gain of 266,000 employees — sharply lower than the March numbers and far fewer than economists expected.
The reasons are varied. Government surveys indicate that nearly 3 million would-be workers are reluctant to seek employment — especially in service industries, where many jobs are available — out of fear of catching the virus. And many parents — particularly women — have dropped out of the workforce because child care is unavailable or unaffordable.
A further reduction of COVID-19 infection rates as people become vaccinated will help stem the fear. And legislative solutions are needed to make child care more tenable. In addition, the reopening of schools will reduce the need for child care and allow more people to enter the workforce.
Those solutions are months or years away. But an immediate step would be to remove the federal unemployment payments for those who are capable of working.
Since early in the pandemic, the federal government has provided $300 a week to workers who qualify for unemployment, adding it to state assistance. The payments were necessary to absorb the economic shock of the pandemic, helping suddenly displaced workers put food on the table and pay for necessities.
The $1.9 trillion pandemic relief bill signed by President Joe Biden extended those payments to Sept. 6. But several states already have passed legislation to halt the payments in June, arguing that they are hampering job growth.
Biden said: “The law is clear. If you’re receiving unemployment benefits and you’re offered a suitable job, you can’t refuse that job and just keep getting unemployment benefits.” He added that the administration will work with states to impose the rules, but enforcement is difficult and time-consuming.
In Clark County, short-term unemployment claims have gradually declined, but long-term unemployment has grown. “Compared with early- and mid-December, we’ve had roughly the same number of claims, but far fewer regular claims and more extended claims,” regional economist Scott Bailey said in March.
Policymaking can move at a glacial pace, but the pandemic has required quick action that often changes direction. Congress should repeal the supplemental unemployment benefits.