“If unemployment benefits were the driving force behind labor market dynamics, then you would not have seen that effect,” said Gordon Gray, director of fiscal policy at the American Action Forum, a right-leaning think tank.
The jobs report, which disappointed on several fronts, came at a time when the nation was contending with both elevated levels of coronavirus cases and a return to school for millions of children.
The latest report undercuts the argument made by many Republicans and business owners that the nation’s economic recovery was being slowed by a federal safety net they deemed too generous.
Historic increase in benefits ends
A key component of the relief effort was a federal weekly supplement for those out of work. Initially, the jobless received a weekly $600 boost from April through July of 2020. Congress then revived the enhancement in late December but reduced it to $300 a week.
Lawmakers also created two other measures to aid the jobless when the coronavirus struck. The Pandemic Unemployment Assistance program provided payments for freelancers, the self-employed, independent contractors and certain people affected by the outbreak, while the Pandemic Emergency Unemployment Compensation program extended payments for those who exhausted their regular state benefits.
The expiration of the programs last month left more than 8 million people with no unemployment compensation at all, while another 2.7 million lost the $300 federal weekly boost but continued receiving state payments, according to estimates by The Century Foundation.
They joined the roughly 2.7 million Americans who were cut off from some or all of their benefits in the states that opted to terminate at least one of the programs early.
“A lot of people wanted those benefits cut because they believed it would make it easier to hire at lower wages. But the top line data is not telling us that’s what happened,” Aaron Sojourner, a labor economist with the University of Minnesota, said of the September jobs report.
Hiring expected to increase
The benefits’ expiration may indeed lead more people to accept jobs, but it will take time, experts said.
Also, some parents continue to struggle with child care issues and some workers fear taking positions where they have to deal with the public.
Nearly 5 million people said they were not working because they were caring for children not in school or day care, and 3.2 million said they are concerned about getting or spreading the virus, according to the Census Household Pulse Survey taken in the second half of September.
Others just need time to find the right job.
“Of course, people want to go to work and they have been going back to work,” said Andrew Stettner, senior fellow at The Century Foundation. “But it’s not something that happens quickly.”
While Congress is not expected to revive the pandemic programs, lawmakers could funnel more funds targeted at helping laid-off workers return to the labor market through training, internships, employment support and other measures, he said.