by Maurie Backman | Published on July 18, 2021
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One survey shows that workers are earning enough in unemployment that they don't have to take a job.
When the American Rescue Plan was signed into law in March, it didn't just pump stimulus checks into people's bank accounts -- it also boosted unemployment benefits by $300 a week through the beginning of September.
The logic for that boost was that the national jobless rate was still very high, and a lack of vaccines was making it difficult for a lot of unemployed people to go back to work.
Things are different now, though. Not only has the U.S. unemployment rate declined, but at this point, vaccines are available to pretty much anyone who wants one (barring age-related restrictions and health issues contraindicating a jab).
Not only that, but a lot of businesses are eager to reopen in full now that pandemic-related restrictions have largely been lifted. As such, it's easy to make the case that the $300 weekly boost that went into effect months ago is no longer necessary.
It's an argument 26 states have made so far, as they've attempted to pull the plug on boosted benefits ahead of schedule. A few, however, have not been successful. Both Maryland and Indiana, for example, have been forced to reinstate boosted benefits after bringing them to an end.
But it's not just that these states think boosted unemployment is unnecessary; they also insist that the extra $300 a week people without jobs are getting is keeping them from going out and finding work. And one survey may be able to shed some light on that theory.
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A recent Morning Consult survey of 5,000 U.S. adults conducted from June 22–25, 2021, noted that 29% of people actively collecting unemployment benefits said they turned down job offers during the pandemic. Of those, 45% said they rejected job offers because of the generosity of the unemployment benefits they're receiving. All told, that's 13% of survey respondents who are, in fact, staying out of the labor force due to earning enough on unemployment to not have to work.
But that doesn't mean that the states that pulled those boosted benefits early were in the right. In fact, if anything, it means that the bulk of those respondents turned down a job offer for another reason.
While it's easy to make the case that boosted unemployment is disincentivizing workers to take a job, what may also be turning them off are health concerns related to the pandemic. Not everyone can be vaccinated, and masks are no longer a requirement in much of the country. There are also childcare constraints since lower-wage earners may, in some cases, lose the bulk of their income to daycare or babysitting costs until schools reopen.
As such, pulling boosted unemployment benefits early may not give the states that went that route the same results they expect. And businesses may continue to grapple with labor shortages until schools open back up and lower-paying industries, like hospitality, reassess their wage policies and find ways to do better.
Based on the aforementioned survey, it's clear that some people are getting more leeway to stay unemployed because their benefits pay enough. But even when that boost runs out, states may continue to face labor shortages until these other issues are resolved.
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