Some companies in Florida and Alabama are still struggling to find staff months after the states cut enhanced COVID-19 unemployment benefits

A help wanted sign that reads "Now Hiring!" in the window of the PetSmart location along 5th Street Highway in Muhlenberg Twp. Thursday morning August 26, 2021.
Enhanced jobless benefits have been cut nationwide as of Monday.

  • Some companies are struggling to hire staff months after their states cut enhanced jobless benefits.
  • One Florida restaurant said it hired high school students and got staff to work more overtime.
  • Workers say they want higher pay, better benefits, and a different work environment.
  • See more stories on Insider’s business page.

Some companies in states that cut enhanced unemployment benefits months ago say they’re still struggling to find workers.

The Ledger reported that some companies in Polk County, central Florida, were struggling to find enough workers more than two months after the state cut the extra benefits. Insider has reported on a similar situation in Alabama, which cut enhanced benefits in mid-June.

The enhanced federal unemployment benefits, which were introduced in March last year at the outset of the pandemic, expire across the US on Monday. The added benefits include a $300 weekly supplemental payment to unemployed individuals through the Federal Pandemic Unemployment Compensation program (FPUC).

Some states have already cut the enhanced benefits. Florida Gov. Ron DeSantis cancelled FPUC on June 26, prompting a lawsuit from residents who said that without the benefits they couldn’t afford housing, utilities, food, healthcare, and childcare.

Some business owners hope that cutting the enhanced benefits will mark the beginning of the end for a crippling labor shortage that has caused companies to slash opening hours, limit operations, and raise prices.

It’s too early to see what impact the end of supplemental benefits has had on Florida’s employment rate, but business leaders and owners told The Ledger that the labor shortage continued to hurt them.

“Anywhere you go out into the community, you see help wanted signs and you see businesses doing all types of strategies to encourage people to apply and interview,” Cory Skeates, CEO of the Lakeland Chamber of Commerce, told the publication.

Ray Sykes, who owns the Italian restaurant Arabellas in Winter Haven, told The Ledger he was still struggling to find staff as more and more people want to dine out. Now the restaurant has cut the number of reservations it takes on weekends and service is slower, Sykes said. He said he had to hire workers still at high school who have little to no experience. Current staff are working overtime, and managers are having to work six days a week, he said.

In late August, at least three Chick-fil-A restaurants in Alabama closed their dining rooms because they didn’t have enough employees to keep them open, and two more started shutting early “due to extremely short staffing.” Some applicants didn’t show up to interviews, or accepted roles “only to resign within their first couple weeks,” one of the restaurants said.

Peter Ricci, head of Florida Atlantic University’s hospitality and tourism management program, previously told Insider that blaming the tight labor market on supplemental unemployment benefits was a short-term view.

He said that it actually stemmed from issues “that have been laying low for years.” Workers say that low pay, bad benefits, and a lack of flexible hours are causing them to quit their jobs in droves. One former bartender told Insider he pivoted to a career in tech so he could work more sociable hours and spend more time with his wife.

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Today is the last day that many unemployed workers can claim federal benefits – and states probably won’t be renewing them

Unemployment protest
  • Saturday, September 4 is the last day many jobless people can claim federal unemployment benefits.
  • At least 7.5 million people are going to lose a steady source of income at a perilous stage in the pandemic.
  • Congress and President Biden have shown no interest in renewing the benefits.
  • See more stories on Insider’s business page.

Federal unemployment benefits expire on September 6, but many unemployed Americans will be claiming them for the last time today.

That’s because the expiration comes on Monday, making it so many workers can’t claim benefits for the week following September 6. Instead, as Insider previously reported, they can only claim benefits for the prior week – and many states end their claim weeks on Saturday or Sunday.

It’s not just the additional $300 weekly distribution that jobless workers are set to lose. Also expiring are two different pandemic-era programs that expanded both who’s eligible for benefits and how long they can receive them.

That means that newly eligible unemployed gig workers and freelancers will completely lose their benefits, as well as those who were still receiving benefits after exhausting their states’ allocation.

Those groups of people will be deprived of a steady source of income as the Delta variant sparks a surge of infections and hospitalizations in many parts of the country. The development is renewing concerns among many economists that the new pandemic wave could set back the recovery.

“I feel like they should not end any benefits until at least there is a vaccine for all ages of the people in America,” Amanda Rinehart, an unemployed mother in Pennsylvania, previously told Insider. Her child is at high risk for COVID-19 and too young to receive a vaccine, meaning Rinehart will have to continue to stay at home to oversee virtual learning.

Most Democrats aren’t interested in renewing the federal aid, which many economists credit with propping up the economy and workers through perilous stretches of the pandemic. Early rumblings from progressive lawmakers like Rep. Alexandria Ocasio-Cortez – who opened the door on pushing for an extension – have subsided. Republicans are staunchly opposed to the bulked-up benefits, arguing the generous aid is dissuading people from seeking new jobs.

In an August letter, Treasury Secretary Janet Yellen and Labor Secretary Marty Walsh confirmed that federal benefits would end on September 6. However, the letter also said that states could use leftover funds from the American Rescue Plan to extend benefits on their own. Further guidance from the Department of Labor obtained by Insider said states could issue one-time or period payments to impacted workers.

But no states have committed to extending benefits. California has issued one-time stimulus payments to a majority of its residents, partially subsidized by Biden’s first stimulus package.

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Democrats are unlikely to extend federal unemployment benefits after they expire in 2 weeks

unemployment insurance weekly benefits stimulus checks recession job losses coronavirus pandemic
Carlos Ponce joins a protest in in Miami Springs, Florida, asking senators to continue unemployment benefits past July 31, 2020.

  • House Dems don’t have current plans to extend federal unemployment benefits, which end in two weeks.
  • House Budget Chair John Yarmuth told Insider another extension has not been part of future spending talks.
  • The Biden administration recently told states they could use leftover stimulus dollars to extend jobless benefits on their own.
  • See more stories on Insider’s business page.

House Democrats are unlikely to include an extension of federal unemployment benefits in their planned $3.5 trillion spending package, according to House Budget Chair John Yarmuth.

“I haven’t heard any interest in extending [enhanced unemployment insurance],” the Kentucky Democrat told Insider. “It’s not been part of the discussion.”

All pandemic aid programs for those experiencing joblessness are slated to expire at the federal level in two weeks. That includes Pandemic Unemployment Assistance for gig workers and freelancers, along with another federal initiative providing payments to people who maxed out state benefits. A recent analysis from the left-leaning Century Foundation projected 7.5 million people would lose all unemployment aid after Sept. 6, the expiration date.

Yarmuth’s remarks serve as a candid assessment of a UI extension’s odds among House Democrats. Senate Democrats are also unlikely to pursue an extension due to resistance from moderates in their ranks.

Sen. Joe Manchin of West Virginia told Insider earlier this month he didn’t support extending enhanced unemployment insurance.

“I’m done with extensions. The economy is coming back,” he said. Other moderates including Sen. Angus King of Maine also indicated recently he was reluctant to back it.

Democrats are using an arduous process known as reconciliation to secure passage of a $3.5 trillion spending plan to bypass Republican opposition, but it requires that Democrats don’t break ranks.

The Biden administration recently told states they could use leftover aid money from the $1.9 trillion stimulus law to extend jobless benefits on their own.

While some have blamed the COVID-19 unemployment benefits for sluggish job growth in recent months, a July analysis found that people did not immediately return to work in some states that cut the federal unemployment insurance early.

Economists say that the risk of getting infected along with school closures and a lack of childcare are among the factors impeding people’s ability to return to work.

​​New research in August found that ending unemployment benefits early led to significantly less spending – a nearly $2 billion drop across the states that cut the benefits in June. And as federal benefits are cut starting in September, researchers predict the rollback could lead to $8 billion less in spending throughout September and October.

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Fox News’ Laura Ingraham suggests cutting off federal unemployment benefits to push people back to work: ‘Hunger is a pretty powerful thing’

Lauren Ingraham Jon Taffer
Fox News host Lauren Ingraham and “Bar Rescue” host Jon Taffer.

  • Fox News host Lauren Ingraham had a suggestion to push people back to work.
  • “What if we just cut off the unemployment?” she said, adding, “Hunger is a pretty powerful thing.”
  • Three separate analyses indicate that cutting off unemployment benefits didn’t lead to substantial job growth.
  • See more stories on Insider’s business page.

Fox News host Lauren Ingraham had a suggestion on her program Thursday evening to bolster employment growth.

“What if we just cut off the unemployment?” she said, adding, “Hunger is a pretty powerful thing.”

She veered between acknowledging the hardship some people face and encouraging them to find a job. “I’m talking about people who can work, and refuse to work,” she said.

Bar Rescue host Jon Taffer responded: “They only feed a military dog at night, because a hungry dog is an obedient dog. Well, if we are not causing people to be hungry to work, then we’re providing them with all the meals they need sitting at home.”

However, 26 mostly GOP-led states have already cut off federal unemployment benefits in a bid to press people back to work. The results of that step may not be having the intended results.

Three different analyses from UKG, Homebase, and Indeed indicated that cutting off jobless benefits didn’t lead to a substantial increase in employment or job growth.

The Homebase analysis also indicated employment grew faster in states that kept the jobless benefits compared to those that ended them early.

Two components of the shortages, per a recent Morgan Stanley note, include school closures and a mismatch between the industries that are hiring and the workers seeking jobs.

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Half of all US states are scrapping stimulus-era jobless benefits, cutting off 4 million workers from federal aid

GettyImages protest dc covid-19 stimulus relief
Demonstrators rally near the Capitol Hill residence of Senate Majority Leader Mitch McConnell, R-Ky., to call for the extension of unemployment benefits on July 22.

  • 25 states are pulling the plug on federal jobless benefits enacted during the earliest days of the pandemic.
  • The GOP-run states are halting the flow of jobless aid to 4 million jobless people.
  • A top Democrat suggested he was drafting a plan for the federal government to step in and provide aid.
  • See more stories on Insider’s business page.

Half of all US states are moving to scrap federal unemployment programs over the summer.

Twenty-five GOP-run states are pulling the plug on federal unemployment benefits several months before their scheduled termination in September. Republican governors and lawmakers argue the $300 weekly jobless aid is keeping people from searching for jobs.

Maryland was the latest on Tuesday. Gov. Larry Hogan announced the state would end its participation in federal benefits effective July 3. The coronavirus relief programs were set up in the earliest days of the pandemic last year during a surge in unemployment.

“While these federal programs provided important temporary relief, vaccines and jobs are now in good supply,” Hogan said in a statement. “And we have a critical problem where businesses across our state are trying to hire more people, but many are facing severe worker shortages.”

The labor story is probably a bit more complicated than that. Everything from COVID fears to childcare to a mismatch between the workers seeking roles and open jobs is likely contributing to the current situation.

A JPMorgan note last week said politics was playing a major factor in moves to halt the stimulus relief measures. “It therefore looks like politics, rather than economics, is driving early decisions to end these programs,” the bank said.

Regardless of the factors, though, the decision to prematurely end federal benefits will impact 4 million workers, according to an estimate from Andrew Stettner at the liberal-leaning Century Foundation.

And a good chunk of those workers will lose their benefits completely. That’s because they’re on Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC), two federal programs that expanded the eligibility for benefits and how long workers could receive them.

One of those workers is Susan Hardy, 70. She lives in West Virginia, where federal benefits will end on June 19 – just a little over two weeks away. Hardy is a longtime independent contractor working in gas and oil title research, and has been receiving PUA benefits since she was laid off from a project.

Susan Hardy
Susan Hardy.

“I sent messages to the governor begging him not to do that. At least let us go till September,” Hardy said. “It looks like my job, my work, could open back up a little bit in October, or maybe by November. At least going to September would allow me to get through more of the difficult periods before hopefully things will open up.”

But the Labor Department has recently concluded it cannot step in to prevent the loss of benefits for unemployed workers. Chair of the Senate Finance Committee Ron Wyden told Politico in an interview published Wednesday he was eyeing a new plan for the government to intervene.

“If it takes changing the law, I’ll change the law,” he said. A spokesperson for the Senate Finance Committee declined to comment further.

In the meantime, workers like Hardy – who said she made less on unemployment than in her prior work – are facing down an unemployment cliff in the coming weeks.

“Our work has not opened up. I mean, they want to say, go to work, go to work, go to work,” Hardy said. “But if your work is not there, you cannot go to work. And we need those – I realize it’s only till September, it’s not that much longer – but September definitely beats June.”

Are you unemployed and have a story you want to share? Contact these reporters at jkaplan@insider.com and jzeballos@insider.com.

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There’s no help coming anytime soon for the millions about to lose federal unemployment benefits in two dozen GOP states

Joe Biden sad
President Joe Biden.

  • At least 24 red states are starting to end their federal jobless benefits within weeks.
  • The moves will impact 4 million people on unemployment, with about half losing all government aid.
  • The Labor Department has concluded it has limited authority to step in to keep aid flowing.
  • See more stories on Insider’s business page.

Almost half of all US states have decided to end their participation in federal unemployment benefits, setting up some workers to receive drastically reduced payments – and others without any federal relief coming through the door.

Twenty-four GOP-run states are moving to slash federal unemployment benefits within weeks, citing a so-called labor shortage and lack of hiring. Governors in those states are ending programs set up in the early in the pandemic, which added federal cash onto state unemployment checks and extended the weeks people were eligible for aid. Nebraska was the latest to pull the plug on all stimulus jobless aid programs, on Tuesday.

The measures will slash jobless aid from 4 million people, per an estimate from Andrew Stettner at the liberal-leaning Century Foundation. That projection means that nearly one in four of all Americans receiving unemployment are poised to experience some reduction in their benefits.

One of them is Scott Heide, a 35-year-old in Florida. His state’s governor, Ron DeSantis, announced this week that the state would be terminating its participation in the extra $300 in weekly federal benefits effective June 26.

Heide told Insider that he’s been on unemployment for almost a year. When he lost his job, he also lost his health insurance, and has had to pay over $800 a month for COBRA insurance since. He had to leave his apartment and move back in with his parents.

The original $600 supplement “really made a big difference,” he said, but that expired after just a few months. Then, Biden’s American Rescue Plan added in a $300 benefit. “That was like my lifeline” for paying bills, Heide said. But at a certain point he said he knew it was a “matter of time” before DeSantis went down the same road as other GOP governors.

“It’s just really tough because I’m trying to get a job, but it’s not that easy. And I feel like I’m being punished for no reason when it’s out of my control if somebody offers me a job. All I can do is apply,” Heide said.

Florida is an anomaly among the GOP states moving to end federal benefits in that it’s only stopping the additional $300 – for now, at least – and keeping in place programs that expand unemployment eligibility and the number of weeks recipients can access benefits.

In other states, about 2.1 million workers on those programs – Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) – will lose their benefits entirely, per Stettner’s calculations.

Some advocates and politicians have said that Biden’s Labor Department has an obligation to step in and provide PUA benefits, arguing that it’s mandated under the CARES Act.

Sen. Bernie Sanders wrote a letter to Labor Secretary Marty Walsh pressing the Labor Department to continue paying out benefits on its own.

Other Democrats have called on the agency to continue exploring options without specifically urging them to distribute the aid.

“I think the administration should be looking under every rock, and every nook and cranny for ways to protect the vulnerable,” Wyden said in an interview on Tuesday. He suggested he was looking at “next steps.”

Yet it appears that the Biden administration won’t be able to prevent a lapse in unemployment aid in the GOP states. The Labor Department has concluded it’s probably unable to help pay out the benefits, an administration official told Insider last week, given that unemployment systems are administered as a federal and state partnership built on agreement from the states.

The Labor Department did not immediately respond to a request for comment.

“I think there is still going to be litigation on this topic,” Stettner told Insider. “The real legal question is whether DOL has the authority to force states to pay benefits or find a way to get them out themselves.”

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Biden isn’t stepping in to stop 20 GOP-led states from yanking federal unemployment within weeks

Joe Biden sad
President Joe Biden.

  • The Biden administration isn’t stepping in to prevent the loss of jobless aid in GOP-led states.
  • Around 3.4 million people are set to lose some federal aid starting next month.
  • A White House official told Insider the Biden administration wants to strike a “balance” between workers and employers amid a labor shortage.
  • See more stories on Insider’s business page.

At least 20 Republican-led states are terminating federal unemployment aid programs starting in June in an effort to force more people back to work – Texas became the largest one yet on Monday. Some Democrats urged the Biden administration to step in and prevent this from happening, but there’s no sign they will.

Sen. Bernie Sanders of Vermont called on the administration to keep jobless aid flowing under the Pandemic Unemployment Assistance program for millions of gig workers, contractors, and freelancers, set up under a federal rescue package early last year. In a letter to the Labor Department sent on Thursday, Sanders argued the agency had a legal obligation to do so.

The legal fight that Sanders is urging would be a bruising one at a moment Biden is pressing ahead with his $4 trillion economic agenda.

“They have not yet come out with a position that they can enjoin these states, and I know it’s a difficult legal and practical consideration for them,” Andrew Stettner, a senior fellow and unemployment expert at the left-leaning Century Foundation, told Insider. He said continuing the programs would either require buy-in at the state level, or the White House would have to confront Republican governors.

“They’d really have to clash with these states and it’s still unclear their appetite for that clash,” he said. Stettner recently projected that 2.1 million people would lose some form of unemployment aid in Republican states.

The largest chunk of that figure are on PUA and another federal program for the long-term unemployed. An estimated 1.3 million people would be deprived of all their jobless aid since they don’t qualify for regular state benefits. The remainder would receive the state payouts, but they typically replace only 40% of an individual’s past wages.

Biden is taking a hands-off approach on the issue after an unexpectedly dismal jobs report earlier this month. Last week, he underscored the ability of states to reimpose job-seeking requirements that were scrapped early in the pandemic as jobs vanished and unemployment surged. He also stressed that jobless aid was not the main factor keeping people on the sidelines, an argument economists largely agree with as well.

The White House is strongly indicating it’s leaving it up to states to decide whether to yank the unemployment aid ahead of its end in early September.

A White House official who spoke to Insider on condition of anonymity cited progress made on distributing vaccines and said the administration expects more workers to reenter the labor force in the next few months. The official said they’re attempting to find a middle ground between businesses and the unemployed as the economy recovers.

“We recognize that every state has different conditions on the ground,” the official told Insider, adding “the announcements [Biden] made last week are designed to balance the needs of both workers and employers as we work through this unprecedented transition.”

On Friday, Press Secretary Jen Psaki said, “I would say that we certainly understand that governors and leaders are going to have to make a decision in regard to unemployment benefits, but what’s important to remember and what we remind people of is that, again, we don’t see this as a major driver in preventing people from seeking employment and seeking work.”

Republicans are urging governors to continue dropping the programs. “Our local job creators should not have to compete with the federal government for workers,” House Minority Leader Kevin McCarthy of California wrote in a letter to governors last week.

The White House is doubling down on its proposed spending programs. But it appears unlikely that the $300 federal supplement will be extended after Sept. 6 given the opposition of at least one Democrat, Sen. Joe Manchin of West Virginia.

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Joe Manchin says he won’t support extending the $300 federal weekly unemployment benefit from Biden’s stimulus

Joe Manchin
Sen. Joe Manchin (D-WV).

  • Manchin says he won’t vote to extend the $300 federal jobless benefit when it expires in September.
  • “We need people back to work,” West Virginia’s Democrat senator told Politico.
  • There’s some division among Democrats on whether the Biden stimulus measure should be renewed.
  • See more stories on Insider’s business page.

Sen. Joe Manchin said he won’t back extending the $300 federal unemployment benefit from President Joe Biden’s stimulus, which could possibly torpedo the jobless measure once it expires on Sept. 6.

“I’ll never vote for another extension as long as I know that with the vaccines, there’s not an excuse for no one to be vaccinated,” the West Virginia Democrat told Politico. “I understand there’s millions of jobs in America that we can’t fill right now. So we need people back to work. There’s more and more people understanding they’re in trouble.”

Manchin’s opposition highlights a rift among the Democrats over the extension of federal unemployment benefits later this summer. But some centrist Democrats are waiting to see how the economic recovery plays out before deciding on the issue.

Sen. Jeanne Shaheen of New Hampshire cited the low unemployment rate in her state, and told Politico “if that continues it probably should not be extended.”

During Senate debate to approve Biden’s $1.8 trillion stimulus law, Manchin withheld his support from a provision to put in place a $400 weekly federal jobless benefit that would expire at the end of September. After a spate of last-minute negotiations, he pushed to cut it to $300 per week with an early September expiration date.

Manchin’s office did not immediately respond to a request for comment asking whether he supported terminating programs providing jobless benefits to gig workers, freelancers, and the long-term unemployed in September.

The recent April jobs report showed employers adding 266,000 jobs, a lackluster amount that prompted Republicans and business groups to increasingly argue the jobless aid is luring people away from the workforce.

The Chamber of Commerce has called for an immediate end to the stimulus measure, and at least 10 GOP-led states are ending their participation in the federal program in June. Still, many experts say the federal unemployment benefit did not dissuade people from seeking jobs last year, and other factors like school closures, fear of the virus, and lack of access to childcare are playing larger roles keeping workers on the sidelines.

Senate Majority Leader Chuck Schumer said at a press conference on Tuesday there was “overwhelming support” among Democrats to renew it. “Many more people are helped by this $300 extra,” he said.

Other Democrats are warning about the end of enhanced unemployment insurance in many states. Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, called for the Biden administration to step in and prevent workers from losing jobless aid in GOP-led states.

“Mothers without childcare are not going to be back on the job in just a few weeks’ time, and they shouldn’t face financial ruin for living in states run by Republicans,” Wyden said in a Tuesday statement.

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How Biden’s stimulus could cause some large companies to raise wages and bring childcare to the forefront

joe biden amtrak
President Joe Biden.

  • Wages climbed modestly in April, a signal that businesses may be boosting pay to attract workers.
  • Some big employers are boosting pay and expanding the types of incentives they are offering.
  • Biden is signaling he will start encouraging states to reimpose job-seeking requirements for unemployment recipients.
  • See more stories on Insider’s business page.

The picture of American employment – and unemployment – is a confusing one right now.

Some employers say there’s a rampant labor shortage in sectors of the economy such as restaurants, with workers opting to remain on generous unemployment benefits instead of returning to work. The April jobs report on Friday showed that employers added 266,000 jobs, an amount well below forecasts for a million new payrolls or more.

The data provided new heft for Republicans and business groups to argue that the $300 weekly federal unemployment benefits from President Joe Biden’s stimulus are keeping people from seeking open jobs, curtailing the economic recovery. The Chamber of Commerce slammed the jobless aid, saying in a statement that “the disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market.”

The labor-shortage increasingly looks evident, as job openings data from March out on Tuesday morning show openings at an all-time high and the job-filling rate at an all-time low, per Jed Kolko, chief economist at Indeed.

Some large companies are increasing hourly pay to fill open positions and coax people who left the labor force or drawing down unemployment to accept a new job. Chipotle announced on Monday it was raising pay for workers by around $2 an hour, bringing its average pay to $15 per hour by June for all employees. It’s one of several major employers to hike compensation over the last year, including Walmart and Amazon.

The $300 weekly federal UI expansion is currently set to expire in September.

Some chain restaurants in the historically low-paying industry are also expanding the type of incentives they’re offering prospective hires instead of hiking hourly pay. They range from signing bonuses to leadership conferences to 401(k) matching. Still, the Biden administration is doubling down on its stance that simply paying workers higher wages will speed up the recovery.

“My expectation is that, as our economy comes back, these companies will provide fair wages and safe work environments,” Biden said Monday from the White House. “And if they do, they’ll find plenty of workers and we’re all going to come out of this together better than before.”

The childcare effect

Childcare is a prohibitive factor in preventing workers from returning, according to experts. A UBS note last week said that, while the “impact of the unemployment benefits may be overstated,” a large participation gap remains among workers with young kids – a key group in the labor market.

“I think we’ve all been very hopeful that we’re turning the corner, and we’re moving forward, and that components of this pandemic – that the big principal issues of the pandemic are behind us – but I think that we need to rethink that,” Misty L. Heggeness, a principal economist and senior advisor at the US Census Bureau, told Insider.

“That’s not true for a subset of our workforce. I think we’ve seen improvements until now because these have been the low-hanging fruits.” The lack of childcare is “crippling” our ability to return to work and facilitate economic growth, she said.

According to an analysis from the National Women’s Law Center (NWLC), 165,000 women dropped out of the labor force in April. Women only accounted for 161,000 of the jobs added in April. That means that – not accounting for any population growth – it will take women 28 months to return to pre-pandemic employment levels at that pace.

On Monday, the White House said it would be accelerating the distribution of childcare assistance included in the American Rescue Plan. Childcare is also a major plank of Biden’s $1.8 trillion American Families Plan.

‘Some upward pressure in wages’

The April jobs report showed wages climbing modestly overall, which could partly be due to businesses ramping up efforts to lure people back into the workforce. A Bank of America note on Monday from a team led by Joseph Song noted that average hourly earnings rose 0.7% for all workers after the latest April jobs report.

“When you dig into the details, you saw some pretty remarkable increases in wages in categories like transportation and warehousing, retail, leisure, and hospitality – all sectors that should be seeing a real boom in demand and hiring,” Michelle Meyer, the head of securities at Bank of America’s US economics team, told Bloomberg. “There’s obviously some friction there where there’s a whole lot of demand for workers but there isn’t enough of a supply at the moment and that’s creating some upward pressure in wages.”

Still, wages aren’t rising quickly enough to address the hiring shortage. Employers may be reluctant to hike pay at this stage, fearful that high consumer demand could taper off later in the year and leave them with excessive payroll costs.

“You’re competing with a temporary unemployment supplement,” Neal Bradley, executive vice president of policy at the Chamber of Commerce, told The New York Times. “You’re not going to make a permanent wage adjustment for a temporary, government-induced distortion,” he said, referring to the September expiration of expanded federal aid.

Biden has defended the $300 federal jobless aid as a measure that isn’t dissuading people from leaping back into the workforce. However, on Monday he said that the Labor Department would be helping states reimpose job-hunting requirements that were largely waived during the pandemic.

“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” he said. Twenty-nine states have already done so, according to a White House fact sheet.

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Why at least 300,000 people in 33 states are losing unemployment benefits earlier than expected

Unemployment filing coronavirus
  • A key tool to provide jobless aid to long-term unemployed people is broken in 33 states, per a new report.
  • The shut-off is affecting at least 300,000 people in at least 33 states, researchers say.
  • The study said unemployment benefits for some claimants could turn off in New York and California.
  • See more stories on Insider’s business page.

A policy instrument designed as a buffer for unemployed Americans is broken in 33 states, according to a new report released Tuesday from the California Policy Lab.

The Extended Benefits program is meant to provide jobless aid to people who exhausted regular benefits in high-unemployment states. Earlier federal rescue packages that Congress approved lengthened the eligibility period for people to get the assistance.

But it appears the program is shutting off because it’s not counting long-term unemployed people collecting emergency federal stimulus aid in a measurement used to gauge the share of the workforce claiming unemployment benefits.

“It’s as if the Titanic had stopped loading the lifeboats because some people had already gotten off of the ship,” TJ Hedin, a co-author of the study, tweeted on Tuesday.

“If these triggers were updated to count all people receiving unemployment benefits, then it would mean benefits would be available to impacted workers for longer durations, which seems sensible during times of extended job losses like the pandemic,” Alex Bell, another co-author of the study, said in a statement.

“Unfortunately, in state after state we see that the counter-intuitive design of the program’s trigger system is causing the exact opposite to happen,” he said.

Some states such as Alabama, Maryland, Ohio, South Carolina and Virginia have experienced an early shut-off of the EB program, impacting around 20% to 30% of jobless claimants.

Researchers warned some people’s benefits could be yanked in California, New York, Massachusetts, Nevada, and New Mexico over the coming weeks. These states have over 30% of claimants receiving aid under the program, the report said.

A $300 weekly federal unemployment benefit is in place until September 6, a key part of President Joe Biden’s recent stimulus law. Unemployment claims last week dropped to a new pandemic-era low, as 576,000 people filed for benefits.

Some Congressional Democrats are pressing to overhaul the nation’s battered unemployment system. Sens. Ron Wyden and Michael Bennet unveiled a plan last week to beef-up state unemployment checks and penalize states who stray from new benefit standards.

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