Cutoff of jobless aid spurs no influx

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.

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.

“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.”