Stay-at-Home Americans Sow White House Angst on Jobs Miss
(Bloomberg) -- Portia Roberson says it’s “disheartening.” Employers in Michigan are calling her social services group looking for recruits to fill job openings. But, she adds, federal assistance payments are contributing to depress demand for those opportunities.
“There are some people who are quite honestly, right now at least, with the stimulus package,” preferring to stay at home, Roberson, head of Detroit-based Focus: HOPE, said in an interview. “I think that that will shift when some of that money begins to run out more,” said Roberson, who worked at the Justice Department during the Obama administration.
She spoke on the eve of Friday’s U.S. monthly employment report, which showed a shockingly low gain in payrolls for April. Republicans quickly blamed President Joe Biden’s $1.9 trillion March stimulus package for effectively encouraging Americans without jobs to hold off on looking for work.
That bill provides $300 extra a week in unemployment insurance, sustaining a benefit that won bipartisan backing in December. For anyone who used to make under $32,000 a year, it’s better financially for now to receive unemployment benefits, according to Bank of America calculations. The jobless bonus runs out in early September.
The administration went into overdrive to counter the GOP narrative, with Biden speaking directly to it in televised remarks from the White House, and officials fanning out across the media -- in some instances reaching out themselves.
“It is not in the data -- it is in the anecdote,” White House economist Jared Bernstein said in an interview about claims of generous benefits persuading people to hold back from getting jobs.
The country added just 266,000 jobs in April, more than 700,000 fewer than the consensus prediction of economists. Biden said the enhanced benefits didn’t have a “measurable” effect on the April numbers, and pointed out that there was an increase in job seekers last month.
Former Treasury Secretary and Obama administration economic director Lawrence Summers disagreed.
“Respectfully, I think it is close to self-evident that the fact that people are being paid more to stay at home than they would be to work -- in millions of cases -- is reducing the available supply of labor,” Summers said in an interview with Bloomberg TV, for whom he is a paid contributor.
Roberson provides some anecdotal evidence. She says Michigan automakers and their suppliers have been “looking for 100 people or 50 people,” but haven’t been able to fill the openings. “I’m a little surprised by the fact that we haven’t been overwhelmed with folks coming in,” she said.
The White House argued that, with schools still not universally back to full in-person learning and with a shortage of childcare, many Americans -- especially women -- haven’t been able to return to work. Roberson has found a similar pattern, and says of people remaining on federal-assistance payments: “I don’t want to think of it in terms of someone being greedy.”
Lobbies for businesses both large and small blamed government policy for some of the April jobs disappointment.
“I don’t think it explains the difference between one million expected jobs and the 266,000 that showed up,” said William Dunkelberg, chief economist at the National Federation of Independent Business, which advocates for smaller firms. “But fundamentally it doesn’t make sense to pay people so much in benefits that they can earn more than from a good job.”
The Chamber of Commerce, the powerful business lobby, called for repealing the extra jobless benefits that current legislation provides to early September.
Senator Roger Wicker of Mississippi, the top Republican on the Commerce committee, said that the “employment numbers are a direct product of Democrat policies. Unnecessary lockdowns, school closures, and excessive unemployment benefits are unnecessarily depressing the economic recovery.”
Senate Budget Committee Chairman Bernie Sanders responded in a tweet that “if $300 a week is preventing employers from hiring low-wage workers there’s a simple solution: Raise your wages. Pay decent benefits.”
House Speaker Nancy Pelosi said the weak employment report “highlights the urgent need to pass President Biden’s American Jobs and Families Plans.” Totaling $4 trillion in spending and tax credits, those proposals have mostly been rejected by Republicans, a group of whom have pitched an infrastructure-only package of less than $600 billion.
Democrats have been less united on the overall size than they were in approving Biden’s virus aid package. The new spending plans could be debated by Congress well into the fall or even 2022.
Biden has opened the door to compromise and hinted he could support a lower increase in the corporate tax rate than he had initially floated. He’s scheduled to meet with the top two Republican and top two Democratic congressional leaders on Wednesday, for the first time since he took office.
And on Thursday he plans to meet with six Republican senators -- Shelley Moore Capito of West Virginia, John Barrasso of Wyoming, Roy Blunt of Missouri, Pat Toomey of Pennsylvania, Mike Crapo of Idaho and Wicker -- to discuss his infrastructure proposal, a White House official said on Friday night.
Capito has proposed a less costly infrastructure plan.
“The president’s been clear from the beginning that he’s open to compromise and wants bipartisan support,” Commerce Secretary Gina Raimondo said after meeting with Biden on Friday.
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