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Are unemployment benefits keeping Americans home? A look at US labor shortage

As the economy reopens, some businesses are having trouble hiring enough workers to fully operate. In response, many states are ending pandemic unemployment programs, including the extra $300 in weekly unemployment benefits set to run through Labor Day. We talked to unemployed workers, business owners across the country about their concerns, and Ben Casselman of The New York Times about the issue.

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  • Judy Woodruff:

    The economic recovery from the worst of the pandemic continues, but the strength of it is not fully clear. And some businesses are having trouble hiring enough workers to reopen fully.

    In response, many states are ending pandemic unemployment programs to encourage people to get back to work. Over the next six weeks, half of states will end the extra $300 in weekly unemployment benefits that were set to run through Labor Day.

    We talked to unemployed workers and business owners across the country about their economic concerns.

  • Bill Eastwood:

    My name is Bill Eastwood. And I currently reside in Columbia, South Carolina. I relocated here four years ago for a job.

  • Roberta Montelione:

    My name's Roberta Montelione. I'm the managing partner of Milan Catering and Event Design.

  • David Jones:

    I am David Jones. I'm the managing partner of Blueridge Restaurant Group.

  • Lisa Smallwood:

    Well, I'm Lisa Smallwood. I was contractor for USDA. Then, in September — no, August, they decide that they are going to renew like the top three accountants or whatever.

  • Jason Webb:

    My name's Jason Webb from Huntington, West Virginia. And my business is G.D. Ritzy's.

  • Lisa Smallwood:

    Well, when June 12 comes, guess what? You won't get anything from unemployment at all. So, it's like, OK, now, what disaster is going to hit now?

  • Roberta Montelione:

    The unemployment is — in Florida is $275 a week. That doesn't cover much in the way of bills.

  • Lisa Smallwood:

    It's all politics. And I'm so sick and tired of it. Everybody's trying to make a point. But guess what? They are actually playing with people's livelihood.

  • Bill Eastwood:

    Three hundred is $1200 a month. It makes a difference. And I had to establish a financial runway back in the first quarter of 2020. And it extends that runway by 25, 30 percent.

  • Jason Webb:

    We do see that light at the end of the tunnel. And that was a good feeling to have. And then we ran into this hurdle of employees, trying to find employees. We couldn't get anybody. We're like, I couldn't get cousins or nephews or anybody to come in for a job.

  • David Jones:

    We have tripled the hourly rates. We were — everybody, every restaurant's doing signing bonuses. We're doing all of those things. And we are probably 70, 80 employees short right now. We would hire them all right now if they showed up on our doorstep.

  • Roberta MontelioneE:

    I don't have a labor shortage. But I'm also willing to pay people a fair wage and make sure that they're safe and make sure that they know that.

  • Jason Webb:

    The biggest thing is going to be this — the unemployment benefits that they were receiving. It was — it's hard to compete with larger wages. And, as a small business owner, that would be a — quite a challenge for me to pay much more than we do.

  • Lisa Smallwood:

    You have so many people say, oh, my gosh, so many people are making so much more money being off than they are at their regular jobs.

    And I said, yes, and so many people, that what they're giving them every week is still not enough. And it's like telling me, well, you know what? Forget your degree. You can just go work somewhere. Really?

  • David Jones:

    We have specific employees that have told us that I — we just don't — I don't have anybody else to watch my child during the day. We have heard that, well, I can make as much on unemployment as I can on working as a server.

    We have supplemented it with much higher hourly rates to make them — make them where they used to be. We don't want — we don't want compensation to be an issue for them not coming back to work.

  • Roberta Montelione:

    If someone's raising their hand and saying a labor shortage, my answer is, are you paying them a fair wage? Are you giving them employee health care benefits? Are you taking care of people?

    I think the model is are different now. People don't just show up and work. You need to make sure that you're invested in them.

  • Bill Eastwood:

    Financially, I really need to find a job this year for the money not to start getting critical. So this isn't about losing my home today. It could be down the road. Being unemployed is a very nerve-racking place to be.

  • Lisa Smallwood:

    I call it character-building. I have built so much character, because these are like the trials that you go through and everything. It just build up my character. It builds something in you to overcome something that's next.

    That's how I look at it. I told somebody this morning, I have to be willing to be uncomfortable just to be comfortable.

  • Judy WoodruffF:

    Some heartfelt statements there from the people we were able to talk with.

    Let's look closer at some of those concerns we just heard about, government aid and relief and where we are in the economic recovery.

    Ben Casselman writes about economics and business for The New York Times. And he joins me now.

    So, Ben Casselman, you heard a variety of points of view, but it's clear that these unemployment benefits are making a difference for some, but there's still a dispute about that.

    What is your reporting telling you about the difference these additional unemployment benefits are making right now?

  • Ben Casselman:

    Well, so, I mean, I think the first thing to say is that it's very clear that unemployment benefits and these enhanced unemployment benefits that the federal government provided made a tremendous difference last year in the lives of millions and millions of people who lost their jobs, and also played a really important role in supporting the overall economy.

    So, last year, I think there was sort of very little debate about it, by and large. We're now at a very different moment, right? We're in a moment where we are starting to open back up the economy, where people are vaccinated and are able to go back out. And we're clearly seeing a ton of people who want to go out and eat in restaurants, fly on planes again, go to hotels again.

    And we're hearing consistently from employers that it's difficult to find workers. And I think that that part is very real.

    The question, of course, is, is it unemployment benefits that are doing that? And I think what we heard from some of those voices is that it is probably a factor. It is probably a factor for some people. But there are a lot of other factors. And these all kind of play off each other in a variety of pretty complicated ways.

  • Judy Woodruff:

    Well, it's become a debate.

    And I think what we're trying to understand is, how much of a factor is it? Because, as you say, clearly affecting the thinking of some people as they decide whether it's better to go back to work or not. And for others, maybe it's childcare, or maybe it's worry about the virus still.

  • Ben Casselman:

    Yes.

    And I think what's happening thing to understand is that these things are not altogether mutually exclusive, right? You could imagine somebody who has kids at home and has some childcare challenges, who has some lingering concerns about the health consequences of going to work in a pandemic, and who, were it not for unemployment benefits, might just have to find a way to make it work, but, because of those benefits, has a little bit more flexibility.

  • Judy Woodruff:

    And we did hear employers saying, I have raised wages, one employer saying, I have tripled the hourly wage for my employees.

    Tell us what the larger economic picture, though, looks like, Ben Casselman. We have seen growth certainly in the last month or so. What does it look like now and going forward?

  • Ben Casselman:

    I think it's a strange moment for the economy in a lot of ways.

    By some measures, we still have a long way to go to get back to economic health. We still have something like eight million fewer jobs than we did before the pandemic began. The unemployment rate is still elevated, and particularly elevated for some groups.

    At the same time, we're hearing these concerns about labor shortages. We're seeing prices increase and shortages of goods, which are problems that we usually associate with a moment of a strong economy, not a moment of economic weakness.

    So, I think it's a strange moment. What most economists will say right now, certainly what the Federal Reserve will say, what the White House will say, is that this is a moment of transition, that this is temporary, and, as we get through the summer months, as schools reopen, as people are able to get their kids back into childcare and get back to work, as companies are able to restock their shelves, sort of this period will pass, and we can get back to a period of economic health.

    But that's uncertain. And we don't have much in the way of historic precedent for the moment that we're living through right now.

  • Judy Woodruff:

    And, just finally and quickly, the increasing talk, worries about inflation, what do you see on that front?

  • Ben Casselman:

    We're seeing price increases. There's no question that inflation is up.

    But it's mostly concentrated right now in sectors that are directly related to the sort of reopening story, right? We're seeing hotel prices rise and rental car prices rise and airfares rise.

    The concern among economists is, could that spread more widely? We have not seen much evidence of that yet. But it's something that we're all going to be watching extremely closely.

  • Judy Woodruff:

    Ben Casselman, who writes about economics for The New York Times, thank you very much.

  • Ben Casselman:

    Thanks for having me.

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