Where are the workers? Cutoff of jobless aid spurs no influx

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INDIANAPOLIS – Earlier this year, an insistent cry arose from business leaders and Republican governors: Cut off a $300-a-week federal supplement for unemployed Americans. Many people, they argued, would then come off the sidelines and take the millions of jobs that employers were desperate to fill.

Yet three months after half the states began ending that federal payment, there's been no significant influx of job seekers.

In states that cut off the $300 check, the workforce — the number of people who either have a job or are looking for one — has risen no more than it has in the states that maintained the payment. That federal aid, along with two jobless aid programs that served gig workers and the long-term unemployed, ended nationally Sept. 6. Yet America's overall workforce actually shrank that month.

"Policymakers were pinning too many hopes on ending unemployment insurance as a labor market boost," said Fiona Greig, managing director of the JPMorgan Chase Institute, who has studied the issue.

Labor shortages have persisted longer than many economists expected, deepening a mystery at the heart of the job market. Companies are eager to add workers and have posted a near-record number of available jobs. Yet job growth slowed in August and September.

Curtis McCray, a Mississippi Department of Corrections recruiter, left, points out a positive testimonial to a job applicant during the Lee County Area Job Fair in Tupelo, Mississippi, Oct. 12, 2021. (Associated Press)

An Associated Press analysis of state data found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs.

Economists cite a range of factors that are likely keeping former recipients of federal jobless aid from returning to the workforce. Many Americans in public-facing jobs still fear contracting COVID-19. Some families lack child care.

Other people, like Rachel Montgomery of Anderson, Indiana, have grown to cherish more time with their families and feel they can get by financially, at least for now. Montgomery, a 37-year-old mother, said she has become much "pickier" about where she’s willing to work after having lost a catering job last year. Losing the $300-a-week federal payment hasn’t changed her mind. She'll receive her regular state jobless aid for a few more weeks.

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"Once you’ve stayed home with your kids and family like this, who wants to physically have to go back to work?" she said. "I’m not going to sacrifice pay or flexibility working remotely when I know I’m qualified to do certain things. But what that also means is that it’s taking longer to find those kinds of jobs."

Some former recipients, especially older, affluent ones, have decided to retire earlier than they had planned. And after having received three stimulus checks in 18 months, plus federal jobless aid in some cases, most households have larger cash cushions than they did before the pandemic. So some people are taking time to consider their options.

Graham Berryman, a 44-year-old resident of Springfield, Missouri, has been living off savings since Missouri cut off the $300-a-week federal jobless payment in June. He has had temporary work reviewing documents for law firms in the past. But he hasn’t found anything permanent since August 2020.

"I am unemployed," Berryman said. "That does not mean I’m lazy. Just because someone cannot find suitable work in their profession doesn’t mean they’re trash to be thrown away."

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Likewise, some couples have decided that they can get by with only one income, rather than two, at least temporarily.

Sarah Hamby of Kokomo, Indiana, lost her $300-a-week federal payment this summer after her state ended it early. Hamby's husband, who is 65, kept his job at a printing press throughout the pandemic. But he may decide to join the ranks of people retiring earlier than they'd planned.

And Hamby, 51, may do so herself if she doesn't find work soon. The jobs she had for decades at auto factories have largely disappeared.

"I don’t want to go work at a computer, in an office, like what a lot of us are being pushed to do," she said. "So now I’m stuck between doing some line of work that pays too little for what it’s worth — or is too physically demanding — or I just don’t work."

Nationally, the proportion of women either working or seeking work in September fell for a second straight month, evidence that many parents are still unable to manage their childcare duties to return to work. Staffing at childcare centers has fallen, reducing available care. Exacerbating the labor shortfall, a record number of people quit jobs in August.

In Missouri, a group of businesses, still frustrated by labor shortages more than three months after the state cut off the $300-a-week federal jobless checks, paid for billboards in Springfield that said: "Get Off Your Butt!" and "Get. To. Work."

The state has seen no growth in its workforce since ending emergency benefits.

Mississippi ended all emergency jobless aid in June. Yet it had fewer people working in August than in May. In Tupelo, a recent job fair attracted 60 companies, including VT Halter Marine, a shipbuilder. About 150 to 200 job seekers attended, fewer than some businesses had hoped.

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Adam Todd had organized the job fair for the Mississippi Department of Employment Security, which helps people find jobs and distributes unemployment benefits. The agency has received "calls of desperation," Todd said, "from businesses needing to recruit workers during the pandemic.

"We're in a different point in time than we have been in a very long time," Todd said. "The job seeker is truly in the driver’s seat right now."

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