By Lauren Weber and Heather Haddon
A lackluster jobs report Friday added fuel to efforts in Florida
and elsewhere to reduce access to unemployment benefits that some
state and industry leaders say have kept people from returning to
the workforce.
The country is in a striking predicament, with millions
unemployed and businesses that can't find enough people to hire at
current wages. The mismatch has prompted several states, including
Florida, Montana and North Carolina, to tighten reporting
requirements to receive unemployment benefits and crack down on
individuals who turn down work.
In some cases, states are ending access to federal pandemic
unemployment payments. The U.S. Chamber of Commerce called for an
immediate end to a $300- a-week federal jobless supplement.
President Joe Biden and Treasury Secretary Janet Yellen defended
the jobs report -- which showed that employers added a
lower-than-expected 266,000 jobs in April -- and said other factors
such as health concerns and school closures were keeping people out
of the workforce.
"I know some employers are having trouble filling jobs. But what
this report shows is that there's a much bigger problem," Mr. Biden
said. "Today's report just underscores, in my view, how vital the
actions we're taking are: checks to people who are hurting, support
for small businesses, for child care and school reopening, support
to help families put food on the table. Our efforts are starting to
work, but the climb is steep and we still have a long way to
go."
Ms. Yellen said a number of sectors were suffering from
supply-chain problems, including a shortage of semiconductors that
is squeezing U.S. auto makers that use the chips to control
everything from brakes to air bags. "I don't think the addition to
unemployment compensation is really the factor that's making a
difference," she said.
Last year, as the Covid-19 pandemic set in and millions were
laid off, many states suspended requirements that people search for
work while receiving unemployment benefits. Today, around half of
states have restored their work-search conditions, according to
jobs site ZipRecruiter.
North Carolina reinstated its work-search requirements in March
and in April published a tipsheet for employers explaining how to
report people who turn down jobs. In Florida, Republican Gov. Ron
DeSantis said he planned to reinstate a requirement that
unemployment benefit recipients provide regular updates on their
job-search efforts.
People can lose their unemployment benefits if they don't
satisfy the requirements. In the first quarter of this year, nearly
407,000 Americans were denied state benefits for failing to search
for work or attest that they were available for work, according to
Labor Department data. Around 6,000 people were denied benefits for
refusing what their states deemed suitable jobs.
The governors of Montana and South Carolina said this week that
they would stop offering their residents the additional $300 a week
federal benefit several months before that program ends in
September. Republican Gov. Greg Gianforte of Montana said residents
instead would be eligible for a $1,200 "return to work bonus" if
they were receiving unemployment benefits as of May 4 and
subsequently took a job and completed at least four paid weeks of
work.
"I hear from too many employers throughout our state who can't
find workers," Mr. Gianforte said. "Nearly every sector in our
economy faces a labor shortage."
Trade groups, especially local restaurant associations, have
been lobbying for such changes. In Michigan, the state is
tightening its oversight later this month, but lawmakers should act
immediately, said Justin Winslow, president of the Michigan
Restaurant & Lodging Association. Eric Terry, president of the
Virginia Restaurant, Lodging & Travel Association, said he
started pushing the state several weeks ago to do what it could to
bring people off the sidelines. One restaurant in the state is
paying potential hires $50 to appear for an interview, Mr. Terry
said.
Virginia had loosened requirements that those on unemployment do
two job interviews a week last year during the pandemic. The state
said it would reinstate the requirement in the first week of June,
and beneficiaries must report their searches weekly to keep
receiving funds.
"The unemployment benefits are probably the single biggest
issue," Mr. Terry said about the labor shortage for the restaurants
and other employers in the hospitality sector. "It's a difficult
process to get people to come in even to interview."
Zach Schiller, research director at Policy Matters Ohio, a
progressive think tank, said data contradicted the perception that
masses of Americans prefer to live on unemployment insurance than
find jobs. "The idea that we have large numbers of people sitting
around collecting unemployment benefits instead of going to work is
a fallacy," he said.
Federal data for the quarter ending Dec. 31 showed that 43% of
unemployed Americans were exhausting their state benefits, while
57% who had received benefits returned to work or stopped claiming
benefits before their eligibility ran out. In Ohio, around 21% of
unemployed people exhausted their full 26 weeks of state benefits,
according to the Labor Department.
The $1.9 trillion Covid-19-stimulus package passed by Democrats
earlier this year provides $300 a week in extra jobless benefits
until September. Republicans opposed the bill, saying it was packed
with deficit spending unrelated to the pandemic.
"Why is anyone surprised that the jobs reports fell short of
expectations?" Sen. Marco Rubio (R., Fla.) tweeted on Friday. "I
hear from #smallbusiness everyday that they can't hire people
because the government is paying them to not go back to work."
Democrats disagreed, saying the weak numbers reflected broader
shortcomings in the economy. The $1.8 trillion child care,
education and paid-leave proposal Mr. Biden laid out last week
proposes changes to the unemployment insurance system, including
creating automatic triggers for more robust benefits based on
economic conditions.
"Anyone who points to the availability of unemployment benefits
as the root cause of these sluggish numbers is ignoring the clear
evidence that throughout the pandemic, workers returned to work
regardless of the financial cost or health risk," said House Ways
and Means Committee Chairman Richard E. Neal (D., Mass.).
More people are rejoining the workforce, which may relieve some
of the tightness in the labor market. In April, 430,000 people came
off the sidelines, increasing the labor force participation rate to
61.7%, up from 60.2% a year earlier.
Restaurant-chain owners say their inability to fully staff is
making for longer waits at their drive-throughs and earlier nightly
closures, leading to lost sales. Independent restaurants are
restricting the tables they can seat with customers due to a lack
of servers. The National Restaurant Association is pushing Congress
to allow for more legal immigration as operators seek to hire tens
of thousands of workers.
Wingstop Inc. CEO Charlie Morrison blamed high prices for
chicken wings and shortages on the inability for the chain's
suppliers to fully staff while the federal benefits continue. It
also is driving starting wages up, he said.
"The stimulus has a lot of impact on this," Mr. Morrison said.
"It's hard to find people to staff the jobs."
--Alex Leary and Andrew Restuccia contributed to this
article.
Write to Lauren Weber at lauren.weber+1@wsj.com and Heather
Haddon at heather.haddon@wsj.com
(END) Dow Jones Newswires
May 07, 2021 17:25 ET (21:25 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.