U.S. Economy Added Almost 700,000 Private Sector Jobs in June
Job numbers are climbing, and at just the right time.
Though the U.S. economy is still down many jobs compared to the number available before the pandemic began, things seem to be improving. In fact, 692,000 private sector jobs were added in June, according to the latest ADP Employment Report.
Some industries added more jobs than others. For example, manufacturing and construction added 19,000 and 47,000 new jobs, respectively. On the other hand, there were 123,000 new education and health jobs that became available in June, and the hard-hit leisure and hospitality industry added an impressive 332,000 jobs.
More jobs at just the right time
In March, the American Rescue Plan was signed into law, and along with the $1,400 stimulus checks it deposited into millions of bank accounts, it also boosted unemployment benefits by $300 a week through the beginning of September.
At this point, 26 states have pulled the plug on that boost ahead of schedule, citing labor shortages as the reason why. And in most of those states, that extra aid is already gone.
As such, an influx of new jobs is a very good thing. Now that boosted benefits have been pulled, many jobless workers may have no choice but to go out and get a job -- even if they're experiencing challenges, like childcare issues or health concerns, which may have kept them on unemployment in the first place. Having more employment opportunities to choose from is therefore a good thing.
That said, some industries really are struggling to hire, and hospitality is one of them. While most states have now pulled boosted unemployment early, that extra $300 a week is still available in 24 states. And given that restaurants in particular are notorious for minimal wages, it stands to reason that many people would rather stay on unemployment than return to a job that will actually pay them less money each week.
Of course, this ties directly into a larger issue that President Joe Biden had hoped to address in the aforementioned relief bill -- a stagnant minimum wage, which, at a national level, currently sits at $7.25 an hour. Biden had wanted to gradually raise the minimum wage to $15 an hour, but was unable to squeeze that provision into the American Rescue Plan.
Lawmakers have blasted people without jobs as being lazy for staying on unemployment rather than returning to work when it's available. But when we compare a minimum wage income to what workers today can receive via unemployment benefits with that $300 weekly boost in place, the former falls short.
The fact that nearly 700,000 private sector jobs hit the economy in June is a good thing, because it buys those who want or are able to work more options. At the same time, labor shortages in certain industries, like hospitality, shouldn't come as a shock.
By early September, boosted unemployment will run out on a national level, and so more roles may start to get filled at that point. Until then, some employers may need to sit tight or otherwise figure out a way to make working for them more financially enticing.
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