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President Joe Biden defended his economic record on Monday as US job data reveal a puzzling couple of facts: Millions remain unemployed after losing their jobs in the pandemic, but companies say they don’t find enough people to hire.
The inability of companies to attract new workers has sparked a polarizing debate about possible causes, with Republicans and some business figures claiming that overly generous jobless benefits deter people from getting jobs.
The main culprit is the extension by the Biden administration of a $ 300 weekly top-up of unemployment insurance. In the highest-paying states, combined benefits can reach up to $ 600 a week, the equivalent of nearly $ 16 per hour. This is more than double the federal minimum wage.
The unexpected struggle to find workers threatens to derail what many economists and business owners had hoped would lead to a solid economic recovery.
Speaking to the White House, Biden said his economic plan “worked” despite last month’s slowdown in job creation, in which companies hired 266,000 new employees, far less than the 1 million economists had expected. He insisted there was “not much evidence” that the extension of unemployment insurance as part of it stimulus plan it was a daunting task.
“We need to stay focused on the real issues we face: overcoming this pandemic and creating jobs,” he said.
Employers say labor shortages are real in sectors such as food service, transportation and construction.
Franchise owners of the convenience store chain 7-Eleven he begged the company not to force them to return to operations 24 hours a day because they could not find anyone to work night shifts. The managers of a McDonald’s with little personality in Texas put up a sign on the access menu asking for patience because “no one wants to work anymore,” which made the restaurant famous on TikTok.
Post Holdings, a maker of breakfast cereals, said the lack of workers has caused sharp delays in production. On Monday, Donnie King, chief operating officer of Tyson Foods, the largest meat processor in the United States, said it “has taken us about six days to do five days of work due to rotation and absenteeism.” its pig plants, which were among the the most affected in the early months of the pandemic.
The National Federation of Independent Businesses, a group of small businesses, said 42% of small business owners say they cannot hold office. Among them is Matt Glassman, owner of the Greyhound Bar & Grill in Los Angeles.
Two weeks before the reopening, Glassman scheduled 15 interviews to hire kitchen staff. But a dozen candidates did not show up, he said. Of the three who did, one was completely wrong with the job and another left on the first day, leaving him with only one contract.
“We did traditional things, we did Craigslist, we did it [hiring website] Stealth culinary agencies, I tried Instagram, I tried to talk to my staff, I tried to walk up and down the street, “Glassman said.” It has not been successful. ”
The rising risks of in-person work during the Covid crisis have caused many low-wage workers to rethink whether their jobs are worthwhile, according to labor activists and economists. For those with children, the persistent closures of some schools and other daycare centers have made returning to work even more difficult.
“The idea that I need to go back to work and potentially put my family at risk and earn a third [the tips] I was making it before, it’s just a decision I probably wouldn’t make, if it were my staff, ”said Glassman.
Others say unemployment benefits have discouraged possible hiring. Among the oil fields of the Permian Basin in West Texas, “there are a lot of people hiring and oil and gas activity is recovering and they’re ready to hire,” said Wesley Burnett, the chamber’s economic director. trade of the city of Odessa. “But the federal program they’ve put in place has pushed everyone back a little bit as they want to stay home instead of going to work.”
Henry McMaster, Republican governor of South Carolina, ordered his state to stop paying the added federal benefits in late June, two months before Washington plans to stop funding them.
“What was intended to be short-term financial aid for vulnerable and displaced people during the pandemic crisis has become a dangerous federal right, which encourages and pays workers to stay home instead of encouraging “Get them back to work,” McMaster said.
Liberal groups say there is an easy way to attract more workers: pay more.
“Now employers say, ‘Well, we can’t find people to do these jobs,’ but what they really should say is, ‘We can’t find people to do these jobs with the wages we’re offering,'” Melissa said. Boteach, of the Liberal National Center for Women’s Law. “And so you see that when you have labor demand you should raise wages to increase supply.”
Data from the U.S. Department of Labor suggests that some employers have begun to do just that. Leisure and hospitality companies increased wages in April, although revenues remain below their previous trend at Covid.
Others go further. Uber launched its own $ 250 million “stimulus” program to attract new drivers. The company said it had 22% fewer drivers than on this occasion last year, even as demand for pilots had grown, leading to increased fares.
Fabio Sandri, executive director of poultry processor Pilgrim’s Pride, told analysts that his company invested $ 40 million in raising wages in the first quarter of the year. He also said they continued to invest in automation to depend less on workers.
Many economists expect any labor shortage to fade, predicting that as Covid cases dwindle, schools reopen and extra unemployment benefits expire in September, hesitant workers will return.
But some may never return to the work they did before the pandemic. Glassman said many of his staff members had fled California.
Additional reports from Derek Brower
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