The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Tag: unemployment data

Republican Complaint: Workers Don't Flock To Poverty-Wage Jobs

Reprinted with permission from American Independent

Republican lawmakers are blaming disappointing jobs numbers on unemployment benefits they claim incentivize employees to avoid returning to work — all while ignoring pleas for a higher minimum wage that might solve the supposed problem.

The Bureau of Labor Statistics estimated on Friday that employers added 266,000 jobs in April — significantly less growth than the previous month — with the unemployment rate remaining almost unchanged at 6.1 percent.

Though administration officials say there is no evidence of a connection, Republican lawmakers were quick to blame this slowdown on the emergency unemployment benefits that were passed as part of President Joe Biden's COVID relief package, the American Rescue Plan. Because the federal government is giving jobless Americans an extra $300 a week, they argued, it must mean people are finding unemployment more lucrative than the jobs available to them.

"People don't want to go back to work. We've sent them so much money, that they compare what they could receive by staying home versus going back to work," Senate Minority Leader Mitch McConnell told Kentucky public television on Sunday. "Every employer I've heard from in Kentucky is having trouble getting people back to work. Enough is enough!"

"Truth: 4 of 10 unemployed get more $ to stay home than work," Texas Rep. Kevin Brady tweeted on Sunday.

"The US economy can't recover from the pandemic if small businesses can't fill jobs bc able bodied adults are paid more by the gov't to stay home & collect unemployment," Rep. Lee Zeldin of New York claimed the same day.

Other Republicans blasted the unemployment benefits as nonsensical, suggesting the jobs numbers were avoidable.

"How can anyone expect job growth when we are paying people more money to stay home and do nothing with expanded unemployment benefits?" Colorado Rep. Lauren Boebert tweeted. "Common sense tells you people will stay home if they're making MORE money that way than working!"

"For months, I've warned of the consequences of the federal government paying Americans more to stay home than go back to their jobs," tweeted Florida Sen. Rick Scott. "Now, businesses across Florida have reopened but are struggling to find enough workers."

And Texas Rep. Pete Sessions claimed in a tweet on Friday, "The slight uptick in the unemployment rate and minimal jobs added to the economy validates that the federal government's unemployment benefits disincentivize individuals from taking jobs. Why work when the government can pay you to watch Netflix?"

Some GOP-run states have responded to the hiring slowdown by reducing the unemployment benefits for their constituents, to supposedly force them back to work. The Republican governors of Arkansas, Montana, and South Carolina, for example, have moved to stop taking the $300-a-week federal subsidy and others are considering doing the same. Montana Gov. Greg Gianforte tweeted Friday that "No-work bonuses won't get Americans back to work."

The U.S. Chamber of Commerce demanded Friday that the federal government stop the subsidy entirely. "The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market," Neil Bradley, the trade group's executive vice president and chief policy officer, said in a press statement.

But while GOP lawmakers and lobbyists for big business are frustrated that people aren't scrambling to take low-wage jobs that don't pay a living wage, they seem uninterested in addressing the problem. Though some Democratic lawmakers have pointed to recent Republican backlash to argue for an immediate $15 federal minimum wage, the idea is wholly unpopular with conservative lawmakers.

Republican in the House and Senate, for instance, opposed such an increase earlier in the year.

Virginia Rep. Don Beyer, chair of the Joint Economic Committee, said in an email on Monday that it was "not surprising to hear some of those who opposed unemployment benefits all along trying to cast blame on this vital assistance for workers," noting that many of the job gains in April were in the leisure and hospitality sector — "the same sector that was the source of the anecdotes about supposed labor shortages."

In addition to getting everyone vaccinated, Beyer wrote, "Congress should work to ensure workers have access to affordable child care more and are paid a living wage; these and other policy changes in the American Jobs Plan and American Rescue Plan will fuel sustained growth that will benefit everyone."

Other Democrats have used the moment to make a similar push.

"It's crazy that people are not being able to make a fair wage that pays more than unemployment benefits," Rep. Ro Khanna of California told MSNBC on Friday. "What that says is we've gotta get to $15 wages in this country so people are able to make a living wage at their jobs and I think that would solve the issue."

"Don't blame the workers who aren't rushing back to frontline jobs to make $7.25/hour. Blame the companies who aren't willing to pay them a living wage," tweeted Washington Rep. Pramila Jayapal, urging colleagues to "focus on RAISING minimum wage instead of LOWERING unemployment benefits."

Experts agree that raising wages could be a boon to the economy.

David Cooper, senior economic analyst at the Economic Policy Institute, told The American Independent Foundation that with the economy still 8.2 million jobs behind pre-pandemic levels, it was not the time to be cutting back unemployment benefits.

"There are far more people looking for work and unable to find it than there are employers unable to fill vacancies, and pulling back on [unemployment insurance] will only slow down the recovery," he said. "To the extent that employers in some industries — like restaurants and leisure and hospitality — are having trouble finding staff, they need to take a hard look at the wages and quality of those jobs. Those industries are notoriously some of the lowest paying industries in the economy."

He added, "I don't think anyone should be surprised that some people might not be eager to take difficult jobs that are even harder now — and that might put their health at risk — if employers aren't offering better pay and benefits than they were offering prior to the pandemic."

"Many low-wage workers are being asked to do more — they're enforcing mask rules for customers and spending more time cleaning, but they're still only making $2.13 an hour plus tips," Lily Roberts, managing director for the Economic Policy Program at the Center for American Progress, said in an email.

"If their kids are in hybrid school or their childcare closed, they'll probably save money by staying home," she continued. "We can get people back to work by having safe and healthy workplaces, in-person care or education for kids, and fair pay for workers."

Michael Madowitz, a Center for American Progress economist, added separately, "We know higher wages bring people into the labor force, especially parents who need to earn enough to afford child care before they can take a job."

Published with permission of The American Independent Foundation.

‘Ominous Signs’ Loom Over US Economy — And Workers Still Struggle

Reprinted with permission from Alternet.

President Donald Trump hasn’t been shy about citing economic data, pointing out how much unemployment has decreased in the U.S. and insisting that he is responsible — never mind the fact that unemployment was already down to 4.7 percent in December 2016, President Barack Obama’s last full month in office. Trump inherited an economic recovery; he didn’t create one singlehandedly.

But while the 3.7 percent unemployment rate the Bureau of Labor Statistics (BLS) gave for June is certainly an improvement over the financial misery and devastation that Obama coped with in 2009 and 2010 during the worst of the Great Recession, there are some troubling signs in current economic data — and those signs are examined in recent articles published by the Washington Post, the New York Times, and Bloomberg News.

Sen. Elizabeth Warren and Sen. Bernie Sanders have both been complaining that most of the economic gains of the Trump era have gone to Americans at the top — and Heather Long, in the Washington Post, notes that 40 percent of Americans still say they are struggling to pay their bills. Long notes that although the “stock market is at record levels” and the current “economic expansion” is the longest in U.S. history, this is a “two-tier recovery.”

And the lower tier, according to Long, is seeing “paltry or volatile wage growth, rising expenses for housing, health care and education, and increased levels of personal debt.”

Long observes that according to Matthew Mish (head of credit strategy for the investment bank UBS) the 40 percent of Americans Mish considers the “lower tier” is struggling to make ends meet.

Neil Irwin, in the New York Times, cites some good news: “Employers added a robust 224,000 jobs, the Labor Department said, up from a revised 72,000 in May.” But Irwin goes on to cite some bad news as well — for example, Irwin writes, “average hourly earnings have risen only 3.1 percent over the last year.”

Irwin reports, “Even as low as the unemployment rate is, employers don’t seem to be bidding up the wages to get workers.” The Times reporter stresses that although “the American job market is steady and solid,” wages aren’t increasing enough for “the average American worker.”

He also noted the financial markets are sending “ominous signs about the global economy.”

The Great Recession was the worst economic downturn since the Great Depression of the 1930s. When Obama was sworn in as president in January 2009, he inherited the worst economy of any president since Democrat Franklin Delano Roosevelt (who took office in 1933 after his landslide victory over Republican incumbent President Herbert Hoover in 1932).

The Great Recession left millions of Americans financially scarred. And Karl W. Smith (a former economics professor at the University of North Carolina) explains in Bloomberg News that although “the job market is still going strong,” the U.S. economy still isn’t “fully healed” in 2019.

“For most workers,” Smith warns, “wages are rising only modestly. That implies there has been an ample supply of people outside the job market who can be pulled back in not because they are being offered more money, but because now, employers are giving them the opportunity.”

In other words, those workers are being underpaid, but being underpaid is a step up from the extended unemployment of the Great Recession.

“The job market is still going strong,” Smith reports. “But until we see labor’s share of income rising and increasing numbers of people choosing work over school and retirement, the job market won’t be fully healed.”

IMAGE: Fast-food workers and their supporters join a nationwide protest for higher wages and union rights outside McDonald’s in Los Angeles, California. REUTERS/Lucy Nicholson