Unemployment benefits aren’t the reason businesses can’t fill some jobs

Posted 27 August 2021 at 11:38 am


It has become an article of faith that the reason businesses can not find workers is because of the federal unemployment benefits.

Congressman Jacobs has even offered legislation to cut benefits in the belief that cutting benefits would force people back to work. It is just silly to think that earning poverty wages is keeping people out of the job market.

Why is it that people think that giving someone poverty wages discourages work yet giving millions to businesses in the form of tax breaks etc. does not discourage work? Furthermore, there are multiple studies that dispute this claim.

Last Friday, (8/20/21), the U.S. Department of Labor Statistics showed that states that cut off unemployment benefits have experienced job growth similar to or worse than states that retained unemployment benefits. In other words the unemployment benefits did not affect people returning to work.

Hospitality and leisure section employment also did not improve when benefits were cut. According to the Labor Department data the five states with the fastest job growth have all retained some of the federal benefits.

A recent study by Arindrajit Dube, et al. found that by cutting off benefits workers spent about $145 less a week which puts less money into local economy. Thus, the unemployment benefits bolster consumer demand, increase business activity and help the our local small town economies.

Let’s dispel the myth that the American Rescue Plan’s unemployment benefits are hurting employment and the local economy.

William Fine