There is little evidence that the end of excess unemployment has brought people back to work.

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A man reads a list of employers as he attends a job fair at Sophie Stadium in Inglewood, CA on September 9, 2021.

Patrick T. Fallon | AFP | Getty Images

According to economists, there is little evidence that the state has been successful in getting people back to work by quickly ending federal unemployment benefits.

Twenty-six states withdrew their pandemic-era unemployment support in June or July. Their governors, primarily Republicans, believed that increased unemployment aid provided the motivation to stay at home rather than work.

According to economists, statistics suggest that other factors play a greater role. Among the many issues keeping workers apart in record jobs, they list ongoing health concerns, child care issues, and increased savings.

In the remaining states, the federal benefits program officially ended on Labor Day. Labor ministry data released on Thursday showed the “unemployment cliff” affected more than 8.5 million people and lost all benefits.

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According to economists, the modest response of workers to the first unemployment cliff (ie early withdrawal of states) suggests that employment will not increase from the end of Labor Day.

“If it’s a precursor, I’m not betting on the end of federal interests” [on Labor Day] This is a really clear and sharp inflection point. “

She said the state’s history differs (for example, in terms of work structure and worker demographics), which makes it difficult to compare and predict.

“urgent problem”

Understanding how unemployment rocks affect the US labor market is an “imminent problem,” according to a JPMorgan Chase Bank research note published Thursday and written by economist Peter McCrory. ..

For example, people who cannot find a job or return to work may struggle financially, get their expenses back, and possibly negatively impact the local economy.

According to a paper authored last month by researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto, most people who lost 7) ​​federal aid in June will return in early August. I was not hired. As a result, we found that total spending decreased by about $2 billion.

Economists at JPMorgan also “did not find a significant impact” on employment in countries with early withdrawal from mid-June, McCully wrote. They looked at options such as restaurant dining and Google’s job search, along with monthly state employment indicators and weekly billing for unemployment benefits.

“Indeed, we have found that lost benefits are associated with increased employment, increased earnings and modest declines in workforce participation,” McCully wrote.

According to Daniel Go, the influx of workers into the job market in these states has not yet occurred, but the effect is similar in states where federal benefits ended on September 6. It is too early to understand whether this will happen. Glassdoor’s senior economist on site. (September 6 was the official end date provided by the American rescue plan, which Congress did not extend.)

He said there is reason to believe the effect may be more pronounced in the other half of the state. For one thing, the Labor Day cliff (which affected large states such as California and New York) affected more workers than summer workers, and perhaps the effect of work on the available data. He said it was easy to find.

However, the Covid delta variant (and a rise in related cases) could leave the unemployed and employers struggling to find recruiting jobs, especially for face-to-face jobs. Yes, said the economist. The increased caseload could also impact parents’ ability to return to work, including school closures and student quarantines.

According to Zhao, Americans are still only increasing their savings, possibly because of increased benefits, allowing the unemployed to spend more time finding the best job. (Other government aid and reducing face-to-face activities can also help boost savings during the pandemic.)

There is little evidence that the end of excess unemployment has brought people back to work.

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