On Sept 6 about 7.5 million people lost their federal aid. An additional 3 million who were benefitting from state programs lost the $300 that they were receiving per week. The Biden administration has encouraged states to end the weekly $300 payments but, requests that states dip into funds originally allocated for pandemic relief to continue payments to the long term unemployed. The US economy is short over 5 million jobs, yet job openings are at a record high. In June and July 26 states decided to end most or all of the federal benefits based on the premise that benefits were preventing people from searching for work. Employers were put in a position of matching the income that benefits provided which exceeded the original wages of two thirds of workers. Unfortunately, at least 557 million unemployment checks – $357 billion worth – went to people who were not unemployed because of fraud. Instead of employers attesting to worker eligibility, COVID created scenarios like school closures that required more parental involvement, and a lot of self-reporting occurred. This unique situation created opportunities for criminals to steal personal information and receive benefits.
However, it is difficult to hire for reasons beyond competing with benefits. Research conducted by economists for the JPMorgan Chase & Co. Institute found that the extra funds did not significantly hold back the labor market. Economists warn that understanding the situation may improve after more time elapses. COVID-induced scenarios like heightened family care responsibilities, school closures, health and safety concerns and the constant skill gap may be to blame. The pandemic caused many workers to shift industries. Several years ago, in a television commercial for Lincoln, Matthew McConaughey said “Sometimes you gotta go back to actually move forward.” Great advice, but not now advice. Perhaps the best approach is for both workers and employers to stop trying to recapture a past when it comes to employment evaluate current reality and design strategy to address it.