American businesses continue to hire at an extraordinary rate, with almost 11 million job openings in July, the government data states. However, there are still over 9 million Americans who continue to collect their enhanced unemployment benefits as of the latest Labor Day cutoff of these pandemic aid benefits – which has annoyed lawmakers, policy experts, and business owners.
A question then is raised: If there are more job openings than jobless workers, why the number of people collecting unemployment aid has not gone down? Why are businesses still having difficulties finding employees to wait tables, take orders, or drive busses?
According to Job Openings and Labor Turnover Survey (JOLTS) data released by the Department of Labor on Wednesday, the number of job openings in the U.S. climbed to a historic high of 10.9 million at the end of July, up from 10.2 million in June.
“For economists, this is a big mystery: If businesses are trying to expand and there is a big pool of unemployed workers, in normal times we would see big jobs growth,” said Luke Pardue, an economist at Gusto, a company that handles payroll and other services for small and midsized businesses. “That matching isn’t happening.”
A lot of business owners and Republican governors are blaming the enhanced unemployment benefits for keeping workers on the sidelines. With how they see it, a lot of unemployed workers choose to collect an extra $300 in weekly jobless support instead of looking for jobs. This provoked 25 GOP-led states to end the jobless benefit early to try to urge job growth by pushing workers off the unemployment support and start looking for jobs.
Although this has not yet transpired, with some economic studies discovering the states that cut the pandemic jobless benefit early did not see stronger job growth compared to those who continued the jobless aid until the Labor Day weekend when the federal benefits expired.
According to Nick Bunker, Indeed Hiring Lab director of research, the biggest factor for most people looking for jobs is still the pandemic. “Concern about the coronavirus will make people less willing to immediately jump into a job than they have in the past.”
Although the latest data regarding the job openings are from the end of July, before the Delta Variant caused a surge of deaths and cases and infections across the U.S., this latest surge may affect the job openings picture for August, when the job increase slowed down due to the spike in Delta infections. The JOLTS will be released in October.
The unmatching number of job openings and unemployed workers is rising and becoming more urgent because of enhanced jobless benefits ending on September 6, affecting about 9.1 million people from these programs. There is a high chance that some of these workers will start to return to the labor force, according to Goldman Sachs analysts, hoping that the end of these benefits may increase job growth by 1.5 million new positions starting September until the end of the year. But, the health concerns of workers may still overpower financial considerations.
“Our findings also suggest that many workers that have left the labor force since the start of the pandemic did so for non-financial reasons such as concern about COVID, and may be slow to return to the labor force even after [unemployment] benefits end,” the analysts wrote.
That only means that business owners and employers may still have difficulties finding workers that are qualified to fill the 10.9 million job openings. But this may only be the case in the near future because the economy and public health are connected. When workers feel unsafe to return to work, and customers spend less due to fears of contracting the coronavirus, it pulls down the economy, according to Pardue.
“That uncertainty is really what is going to be holding back the economy,” he added. “A lot of businesses are wary of expanding if cases increase or if we’ll see more restrictions or shutdowns in the winter. What we will see over the next few months isn’t driven by unemployment [aid] but by the pandemic.”
At present, signs are showing that workers are out of the job market due to fears of the COVID19 virus. There are around 3.2 million Americans that told the Census Bureau they were unemployed from Aug. 2 to Aug. 16 because of the virus, a 30% increase from the previous Census polling period over the last two weeks of July.
Another seen cause for the mismatch between job openings and unemployed workers may be because of the skills difference between what employers need and what employees have to offer, Pardue said.
Businesses are shifting fast toward technology and automation compared to how they were before the pandemic began.
Some workers are also struggling with childcare and schools, especially as COVID-19 outbreaks are provoking quarantines and remote schooling for students all over the country. This factor makes it difficult for parents of young children to return to work because of the ambiguity on their children’s schedules for the coming months.
Meanwhile in Texas, where there are several unemployed workers after Governor Greg Abbott cut the pandemic jobless aid on June 26, told CBS MoneyWatch that ending the support earlier made their lives more financially unstable while not giving any help for them to land a job.
“When [unemployment benefits] ended early we basically lost everything we owned,” said Kamilla Mills, 59, of Denison, Texas, who sold signs for big corporate events and school events before the pandemic — a business that was greatly affected by the pandemic crisis. She lost her home, and is now living in a motel, she said.
According to residents struggling in Texas, they do not understand why the governor had to end the aid early, given that it came from federal funding and not state coffers.