Some businesses seem determined to wait them out. Wages have risen, but many employers appear reluctant to make other changes to attract workers, like flexible schedules and better benefits. That may be partly because, for all their complaints about a labor shortage, many companies are finding that they can get by with fewer workers, in some instances by asking customers to accept long waits or reduced service.
“They’re making a lot of profits in part because they’re saving on labor costs, and the question is how long can that go on,” said Julia Pollak, chief economist for the employment site ZipRecruiter. Eventually, she said, customers may get tired of busing their own tables or sitting on hold for hours, and employers may be forced to give into workers’ demands.
Some businesses are already changing how they operate. When Karter Louis opened his latest restaurant this year, he abandoned the industry-standard approach to staffing, with kitchen workers earning low wages and waiters relying on tips. At Soul Slice, his soul-food pizza restaurant in Oakland, Calif., everyone works full time, earns a salary rather than an hourly wage, and receives health insurance, retirement benefits and paid vacation. Hiring still hasn’t been easy, he said, but he isn’t having the staffing problems that other restaurants report.
Restaurant owners wondering why they can’t find workers, Mr. Louis said, need to look at the way they treated workers before the pandemic, and also during it, when the industry laid off millions.
“The restaurant industry didn’t really have the back of its people,” he said.
Still, better pay and benefits alone won’t bring back everyone who has left the job market. The steepest drop in labor force participation came among older workers, who faced the greatest risks from the virus. Some may return to work as the health situation improves, but others have simply retired.
And even some nowhere near retirement have made ends meet outside a traditional job.
When Danielle Miess, 30, lost her job at a Philadelphia-area travel agency at the start of the pandemic, it was in some ways a blessing. Some time away helped her realize how bad the job had been for her mental health, and for her finances — her bank balance was negative on the day she was laid off. With federally supplemented unemployment benefits providing more than she made on the job, she said, she gained a measure of financial stability.
Ms. Miess’s unemployment benefits ran out in September, but she isn’t looking for another office job. Instead, she is cobbling together a living from a variety of gigs. She is trying to build a business as an independent travel agent, while also doing house sitting, dog sitting and selling clothes online. She estimates she is earning somewhat more than the roughly $36,000 a year she made before the pandemic, and although she is working as many hours as ever, she enjoys the flexibility.
Job growth slowed to the year’s weakest pace last month as the latest coronavirus wave dashed hopes of an imminent return to normal for the U.S. economy.
Employers added just 194,000 jobs in September, the Labor Department said Friday, down from 366,000 in August — and far below the increase of more than one million in July, before the highly contagious Delta variant led to a spike in coronavirus cases across much of the country. Leisure and hospitality businesses, a main driver of job growth earlier this year, added fewer than 100,000 jobs for the second straight month.
“Employment is slowing when it should be picking up because we’re still on the course set by the virus,” said Diane Swonk, chief economist for the accounting firm Grant Thornton.
for the Federal Reserve, which is weighing when to begin pulling back support for the economy.
It is possible that the recent slowdown is a Delta-driven blip and will soon fade — or, indeed, may already be largely in the past. The data released on Friday was collected in mid-September, when the Delta wave was near its peak. Since then, cases and hospitalizations have fallen in much of the country, and more timely data from private-sector sources suggests that economic activity has begun to rebound. If those trends continue, people on the sidelines could return to the labor force, and hiring should begin to pick up.
“This report is a glance in the rearview mirror,” said Daniel Zhao, an economist at the career site Glassdoor. “There should be some optimism that there should be a reacceleration in October.”
But it is also possible that the damage done by the pandemic will take longer to heal than economists had hoped. Supply-chain disruptions have been unexpectedly persistent, and shifts in consumer behavior during the pandemic may not soon reverse. In surveys, many workers say they are reconsidering their priorities and do not want to return to their old ways of working.
Expanded unemployment benefits, which many businesses blamed for discouraging people from looking for work, ended nationwide early last month. Schools reopened in person in much of the country, which should have made it easier for parents to return to work. Rising vaccination rates were meant to make reluctant workers feel safe enough to resume their job searches. As recently as August, many economists circled September as the month when workers would flood back into the job market.
Instead, the labor force shrank by nearly 200,000 people. The pandemic’s resurgence delayed office reopenings, disrupted the start of the school year and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.
“I am a little bit puzzled, to be honest,” said Aneta Markowska, chief financial economist for the investment bank Jefferies. “We all waited for September for this big flurry of hiring on the premise that unemployment benefits and school reopening would bring people back to the labor force. And it just doesn’t seem like we’re seeing that.”
Ms. Markowska said more people might begin to look for work as the Delta variant eased and as they depleted savings accumulated earlier in the pandemic. But some people have retired early or have found other ways to make ends meet and may be slow to return to the labor force, if they come back at all.
In the meantime, people available to work are enjoying a rare moment of leverage. Average earnings rose 19 cents an hour in September and are up more than $1 an hour over the last year, after a series of strong monthly gains. Pay has risen even faster in some low-wage sectors.
Many businesses are finding that higher wages alone aren’t enough to attract workers, said Becky Frankiewicz, president of the Manpower Group, a staffing firm. After years of expecting employees to work whenever they were needed — often with no set schedule and little notice — companies are finding that workers are now setting the terms.
“They get to choose when, where and in what duration they’re working,” Ms. Frankiewicz said. “That is a role reversal. That is a structural change in the workers’ economy.”
Arizmendi Bakery, a cooperative in San Rafael, Calif., recently raised its wages by $3 an hour, by far the biggest increase in its history. But it is still struggling to attract applicants heading into the crucial holiday season.
“There are many, many, many more businesses hiring than there used to be, so we’re competing with many other businesses that we weren’t competing with before,” said Natalie Baddorf, a baker and one of the owners.
The bakery has managed to hire a few people, including one who began this week. But other workers have given their notice to leave. The bakery, which has been operating on reduced hours since the pandemic began, now has enough business to return to its original hours, but cannot find enough labor to do so.
“We’re talking about cloning ourselves,” Ms. Baddorf said.
Jeanna Smialek and Jim Tankersley contributed reporting.
The spread of the Delta variant has delayed office reopenings, disrupted the start of school and generally dashed hopes for a return to normal after Labor Day. But it has not pushed the U.S. economic recovery into reverse.
Now that recovery faces a new test: the removal of much of the aid that has helped keep households and businesses afloat for the past year and a half.
The Paycheck Protection Program, which distributed hundreds of billions of dollars in grants and loans to thousands of small businesses, concluded last spring. A federal eviction moratorium ended last month after the Supreme Court blocked the Biden administration’s last-minute effort to extend it. Most recently, an estimated 7.5 million people lost unemployment benefits when programs that expanded the system during the pandemic were allowed to lapse.
Next up: the Federal Reserve, which on Wednesday indicated it could start pulling back its stimulus efforts as early as November.
OpenTable, for example, have fallen less than 10 percent from their early-July peak. That is a far smaller decline than during the last Covid surge, last winter.
“It has moved down, but it’s not the same sort of decline,” Mr. Bryson said of the OpenTable data. “We’re living with it.”
$120 billion in monthly bond purchases — which have kept borrowing cheap and money flowing through the economy — but it will almost certainly keep interest rates near zero into next year. Millions of parents will continue to receive monthly checks through the end of the year because of the expanded child tax credit passed in March as part of President Biden’s $1.9 trillion aid package.
That bill, known as the American Rescue Plan, also provided $350 billion to state and local governments, $21.6 billion in rental aid and $10 billion in mortgage assistance, among other programs. But much has not been spent, said Wendy Edelberg, director of the Hamilton Project, an economic-policy arm of the Brookings Institution.
“Those delays are frustrating,” she said. “At the same time, what that also means is that support is going to continue having an effect over the next several quarters.”
Household savings could provide a buffer — if they last.
Economists, including officials in the Biden administration, say that as the economy heals, there will be a gradual “handoff” from government aid to the private sector. That transition could be eased by a record-setting pile of household savings, which could help prop up consumer spending as government aid wanes.
A lot of that money is held by richer, white-collar workers who held on to their jobs and saw their stock portfolios swell even as the pandemic constrained their spending. But many lower-income households have built up at least a small savings cushion during the pandemic because of stimulus checks, enhanced unemployment benefits and other aid, according to researchers at the JPMorgan Chase Institute.
“The good news is that people are going into the fall with some reserves, more reserves than normal,” said Fiona Greig, co-director of the institute. “That can give them some runway in which to look for a job.”
recent survey by Alignable, a social network for small business owners. Not all have had sales turn lower, said Eric Groves, the company’s chief executive. But the uncertainty is hitting at a crucial moment, heading into the holiday season.
“This is a time of year when business owners in the consumer sector in particular are trying to pull out their crystal ball,” he said. “Now is when they have to be purchasing inventory and doing all that planning.”
open a new location as part of a development project on the West Side of Manhattan.
Go big. If some aid ended up going to people or businesses that didn’t really need help, that was a reasonable trade-off for the benefit of getting money to the millions who did.
Today, the calculus is different. The impact of the pandemic is more tightly focused on a few industries and groups. At the same time, many businesses are having trouble getting workers and materials to meet existing demand. Traditional forms of stimulus that seek to stoke demand won’t help them. If automakers can’t get needed parts, for example, giving money to households won’t lead to more car sales — but it might lead to higher prices.
That puts policymakers in a tight spot. If they don’t get help to those who are struggling, it could cause individual hardship and weaken the recovery. But indiscriminate spending could worsen supply problems and lead to inflation. That calls for a more targeted approach, focusing on the specific groups and industries that need it most, said Nela Richardson, chief economist for ADP, the payroll processing firm.
“There are a lot of arrows in the quiver still, but you need them to go into the bull’s-eye now rather than just going all over,” Ms. Richardson said.
The share of people living in poverty in the United States fell to a record low last year as an enormous government relief effort helped offset the worst economic contraction since the Great Depression.
In the latest and most conclusive evidence that poverty fell because of the aid, the Census Bureau reported on Tuesday that 9.1 percent of Americans were living below the poverty line last year, down from 11.8 percent in 2019. That figure — the lowest since records began in 1967, according to calculations from researchers at Columbia University — is based on a measure that accounts for the impact of government programs. The official measure of poverty, which leaves out some major aid programs, rose to 11.4 percent of the population.
The new data will almost surely feed into a debate in Washington about efforts by President Biden and congressional leaders to enact a more lasting expansion of the safety net that would extend well beyond the pandemic. Democrats’ $3.5 trillion plan, which is still taking shape, could include paid family and medical leave, government-supported child care and a permanent expansion of the Child Tax Credit.
Liberals cited the success of relief programs, which were also highlighted in an Agriculture Department report last week that showed that hunger did not rise in 2020, to argue that such policies ought to be expanded. But conservatives argue that higher federal spending is not needed and would increase the federal debt while discouraging people from working.
difficult to assess changes in health coverage last year. Census estimates conflicted with other government counts, and officials acknowledged problems with data collection during the pandemic.
federal supplement to state unemployment benefits lapsed. She fell behind on bills, setting in motion events that ultimately left her family homeless for two months this year.
New aid programs adopted this year, including the expanded Child Tax Credit, helped Ms. Long, who moved into a new home last month. She said she had noticed improvements in her children, particularly her 5-year-old son.
“It was bad, but it could have been so much worse, and we have come out the other side once again unbroken,” Ms. Long said.
By the government’s official definition, the number of people living in poverty jumped by 3.3 million in 2020, to 37.2 million, among the biggest annual increases on record. But economists have long criticized that definition, which dates to the 1960s, and said it did a particularly poor job of reflecting reality last year.
7.5 million people lost unemployment benefits this month after Congress allowed expansions of the program to lapse.
Jen Dessinger, a photographer who lives in New York City and Los Angeles, said work dried up abruptly at the start of the pandemic. A freelancer, she didn’t qualify for traditional unemployment benefits but eventually received help under a federal program created last year to help people who fell outside the regular system.
Now that program has ended in the middle of another surge in coronavirus cases. Ms. Dessinger said a single positive coronavirus case could shut down a photo shoot. “It’s made it a more desperate situation,” she said.
Democrats on Tuesday said experiences like Ms. Dessinger’s showed both the potential for government aid to protect people from financial ruin, and the need for a more expansive, permanent safety net that can support people in bad and good times.
A White House economist, Jared Bernstein, said on Tuesday that the new poverty data should encourage lawmakers to enact the $3.5 trillion Democratic measure that includes much of Mr. Biden’s economic agenda, which the administration argues will create more and better-paying jobs.
“It’s one thing to temporarily lift people out of poverty — hugely important — but you can’t stop there,” said Mr. Bernstein, a member of Mr. Biden’s Council of Economic Advisers. “We have to make sure that people don’t fall back into poverty after these temporary measures abate.”
“reckless taxing and spending spree.”
Conservative policy experts said that although some expansion of government aid was appropriate during the pandemic, those programs should be wound down, not expanded, as the economy healed.
“Policymakers did a remarkable job last March enacting CARES and other legislation, lending to businesses, providing loan forbearance, expanding the safety net,” Scott Winship, a senior fellow and the director of poverty studies at the American Enterprise Institute, a conservative group, wrote in reaction to the data, referring to an early pandemic aid bill, which included around $2 trillion in spending. “But we should have pivoted to other priorities thereafter.”
Jason DeParle and Margot Sanger-Katz contributed reporting.
Disappointing August jobs numbers intensified the economic uncertainty caused by the Delta variant, putting pressure on the Federal Reserve as it considers when to reduce its policy support and on the White House as it tries to get more Americans vaccinated.
Fed officials and President Biden had been looking for continued improvement in the job market, but the Labor Department reported on Friday that employers added just 235,000 jobs in August — far fewer than projected and a sign that the ongoing coronavirus surge may be slowing hiring.
“There’s no question that the Delta variant is why today’s job report isn’t stronger,” Mr. Biden said in remarks at the White House. “I know people were looking, and I was hoping, for a higher number.”
A one-month slowdown is probably not enough to upend the Fed’s policy plans, but it does inject a dose of caution. It also will ramp up scrutiny of upcoming data as the central bank debates when to take its first steps toward a more normal policy setting by slowing purchases of government-backed bonds.
speech last week that as of the central bank’s July meeting, he and most of his colleagues thought they could start reducing the pace of asset purchases this year if the economy performed as they expected.
sharp pullback in hotel and restaurant hiring, which tends to be particularly sensitive to virus outbreaks. The participation rate, a closely watched metric that gauges what share of the population is working or looking, stagnated.
Daily Business Briefing
But there were other signs that underlying demand for workers remained strong. Wages continued to rise briskly, suggesting that employers were still paying up to lure people into work. Over the last three months, job gains have averaged 750,000, which is a strong showing. And the unemployment rate continued to decline in spite of the weakness in August, slipping to 5.2 percent.
4.2 percent in the year through July — well above the 2 percent average that officials aim to achieve over time.
Officials widely expect those price gains to slow as the economy returns to normal and supply chain snarls clear up. But they are monitoring consumer inflation expectations and wages keenly: Prices could keep going up quickly if shoppers begin to accept higher prices and workers come to demand more pay.
That’s why robust wage gains in the August report stuck out to some economists. Average hourly earnings climbed by 0.6 percent from July to August, more than the 0.3 percent economists in a Bloomberg survey had forecast. Over the past year, they were up 4.3 percent, exceeding the expected 3.9 percent.
The fresh data put the Fed “in an uncomfortable position — with the slowdown in the real economy and employment growth accompanied by signs of even more upward pressure on wages and prices,” wrote Paul Ashworth, the chief North America economist at Capital Economics.
referred to that consideration in a footnote to last week’s speech.
“Today we see little evidence of wage increases that might threaten excessive inflation,” he said.
Plus, it is unclear whether pay gains will remain robust as workers return. While it is hard to gauge how much enhanced unemployment benefits discouraged workers from taking jobs, and early evidence suggests that the effect was limited, a few companies have signaled that labor supply has been improving as they sunset.
Other trends — the end of summer and the resumption of in-person school and day care — could allow parents who have been on the sidelines to return to the job search, though that might be foiled if Delta keeps students at home.
“There’s still so much disruption, it’s hard for businesses and workers to make plans and move forward when you don’t know what’s coming around the next bend,” said Julia Coronado, the founder of MacroPolicy Perspectives, adding that this is a moment of “delicate transition.”
McDonald’s is raising wages at its company-owned restaurants. It is also helping its franchisees hang on to workers with funding for backup child care, elder care and tuition assistance. Pay is up at Chipotle, too, and Papa John’s and many of its franchisees are offering hiring and referral bonuses.
The reason? “In January, 8 percent of restaurant operators rated recruitment and retention of work force as their top challenge,” Hudson Riehle, senior vice president for research at the National Restaurant Association, said in an email. “By May, that number had risen to 72 percent.”
Restaurant workers — burger flippers and bussers, cooks and waiters — have emerged from the pandemic recession to find themselves in a position they could not have imagined a couple of years ago: They have options. They can afford to wait for a better deal.
In the first five months of the year, restaurants put out 61 percent more “workers wanted” posts for waiters and waitresses than they had in the same months of 2018 and 2019, before the coronavirus pandemic shut down bars and restaurants around the country, according to data from Burning Glass, a job market analytics firm.
replace their face-to-face workers with robots and software. Yet there are signs that the country’s low-wage labor force might be in for more lasting raises.
Even before the pandemic, wages of less-educated workers were rising at the fastest rate in over a decade, propelled by shrinking unemployment. And after the temporary expansion of unemployment insurance ends, with Covid-19 under control and children back at school, workers may be unwilling to accept the deals they accepted in the past.
Jed Kolko, chief economist at the job placement site Indeed, pointed to one bit of evidence: the increase in the reservation wage — the lowest wage that workers will accept to take a job.
According to data from the Federal Reserve Bank of New York, the average reservation wage is growing fastest for workers without a college degree, hitting $61,483 in March, 26 percent more than a year earlier. Aside from a dip at the start of the pandemic, it has been rising since November 2017.
“That suggests it is a deeper trend,” Mr. Kolko noted. “It’s not just about the recovery.”
Other trends could support higher wages at the bottom. The aging of the population, notably, is shrinking the pool of able-bodied workers and increasing demand for care workers, who toil for low pay but are vital to support a growing cohort of older Americans.
“There was a work force crisis in the home care industry before Covid,” said Kevin Smith, chief executive of Best of Care in Quincy, Mass., and president of the state industry association. “Covid really laid that bare and exacerbated the crisis.”
more families turning their backs on nursing homes, which were early hotbeds of coronavirus infections, Mr. Smith said, personal care aides and home health aides are in even shorter supply.
“The demand for services like ours has never been higher,” he said. “That’s never going back.”
And some of the changes brought about by the pandemic might create new transition opportunities that are not yet in the Brookings data. The accelerated shift to online shopping may be a dire development for retail workers, but it will probably fuel demand for warehouse workers and delivery truck drivers.
The coronavirus outbreak induced such an unusual recession that any predictions are risky. And yet, as Ms. Escobari of Brookings pointed out, the recovery may provide rare opportunities for those toiling for low wages.
“This time, people searching for jobs may have a lot of different options,” she said. “That is not typical.”
The nearly half a million undocumented immigrants who live in New York City were devastated by the pandemic, stricken by the virus and the economic fallout it caused and ineligible for stimulus checks and the unemployment benefits that kept many New Yorkers afloat.
Undocumented women were hit particularly hard, a recent estimate by the Fiscal Policy Institute found. Many had low-wage jobs in the service sector. Some were suddenly obligated to stay home with children when schools closed.
Roughly 35,000 undocumented women in New York City had too little food to eat this past March.
After months of demonstrations by groups that support immigrants, New York state lawmakers approved a budget that includes a $2.1 billion excluded-workers fund for people who are ineligible for other pandemic aid because they are undocumented. It is the largest package of its kind in the country.
The Times took a deep look at Isabel Galán, who lives in the South Bronx with her three children. In the year after the pandemic shut down the economy of one of the world’s richest and most expensive cities, Ms. Galán and her children have lived on $100 a week.
Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles
had a rough week. Digital currencies saw several ugly crashes, with Bitcoin ending Friday nearly 30 percent below its price a week before. The plunge followed an announcement from China that effectively banned its financial institutions from providing services related to cryptocurrency transactions. (Elon Musk’s sudden about-face on Bitcoin probably didn’t help, either.) The volatility shook some investors’ confidence in crypto, which has ridden a seemingly unstoppable wave of popularity — and gained traction with mainstream investors — over the past year.
Texas, Oklahoma and Indiana joined more than a dozen other states that are ending federal pandemic unemployment benefits early, citing the need to incentivize people to get back to work. The decision will get rid of the $300-a-week supplement that unemployment recipients have been getting since March and were scheduled to receive through September. It will also end all benefits for freelancers, part-timers and those who have been out of work for more than six months. Some lawmakers believe that cutting off benefits will encourage more people to apply for jobs, but that’s not always the case — a persistent lack of child care has also prevented many parents from returning to work.
can cause premature death, according to a new study by the World Health Organization. Long hours — also known as overwork — are on the rise and are associated with an estimated 35 percent higher risk of stroke and 17 percent higher risk of heart disease compared with working 35 to 40 hours per week, researchers said.
give the Internal Revenue Service more money to chase down wealthy individuals and companies who cheat on their taxes. As part of the same effort to close tax loopholes, the U.S. Treasury Department is trying to convince other countries to back a 15 percent global minimum tax rate on big companies. The policy is meant to deter corporations from sheltering their operations in tax havens such as Bermuda and the British Virgin Islands. But a number of governments have been hesitant to sign on for fear that they’ll scare off businesses.
Eyeing the Competition
Congress wants to bolster the United States’ ability to compete with China and is willing to throw money at the problem. The senate is working on a bill that would invest $120 billion in the nation’s development of cutting-edge technology and manufacturing. Known as the Endless Frontier Act, the legislation would fund new research on a scale that its proponents say has not been seen since the Cold War. In related news, the European Union blocked an investment deal with China on Thursday, citing concerns with the country’s abysmal human rights record.
C.E.O.s in the Hot Seat
Executives from the largest U.S. banks, including JPMorgan, Bank of America and Goldman Sachs, will testify before lawmakers this week about their actions (or lack thereof) to help struggling Americans and small businesses during the pandemic. Democrats on the Senate Banking and House Financial Services committees organized the hearings to scrutinize the banks’ role in lending money to alleviate the financial pressures of the past 15 months. The testimony could affect how lawmakers seek to regulate Wall Street in the coming years.
soared 30 percent in its initial public offering on Wednesday. Amazon indefinitely extended its ban on police usage of its facial recognition software, which has faced ethical criticism. And New York City lifted nearly all of its pandemic restrictions, allowing businesses to welcome customers back at full capacity.
Texas, Indiana and Oklahoma this week joined the growing number of states that are withdrawing from federal pandemic-related unemployment benefits.
Supported by Republican governors and lawmakers as well as national and state chambers of commerce, the decision will eliminate the temporary $300-a-week supplement that unemployment recipients have been getting and will end benefits for freelancers, part-timers and those who have been unemployed for more than six months.
In Wisconsin, where the governor is a Democrat, Republicans in the Assembly and Senate have introduced legislation to end participation.
Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Iowa, Mississippi, Missouri, Montana, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah, West Virginia and Wyoming also plan to end federal unemployment benefits, beginning in June or early July.
Gov. Greg Abbott said in a news release. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits.”
The moves will affect more than 3.4 million people in the 21 states, according to a calculation by Oxford Economics, a forecasting and analysis firm. Of those workers, 2.5 million currently on unemployment would lose benefits altogether, it said.
Although business owners and managers have complained that unemployment benefits are discouraging people from answering help-wanted ads, the evidence is mixed. Vaccination rates are picking up but less than half of adults are fully vaccinated. In surveys, people have cited continuing fear of infection. A lack of child care has also prevented many parents from returning to work full time.
Arizona, Montana and Oklahoma are offering newly hired workers an incentive bonus.
Gov. Ned Lamont of Connecticut, a Democrat, said this week that his state would offer $1,000 bonuses to 10,000 workers who have experienced long-term unemployment and obtain new jobs. His state is not dropping the federal benefits.
A tenet of the American unemployment system has been that anyone collecting benefits, in good times and bad, must look for work.
That quid pro quo changed early in the pandemic. Profound fears of contagion and the sudden need for millions of workers to become caregivers led states to lift the requirements for reasons both practical and compassionate.
But as vaccinations increase and the economy revs back to life, more than half of all states have revived their work search requirements. Arkansas and Louisiana did so months ago in an effort to push workers off their swollen unemployment rolls. Others, like Vermont and Kentucky, have followed in the last few weeks.
ordered the Labor Department to “work with the remaining states, as health and safety conditions allow,” to put such requirements in place as the pandemic abates.
Research suggests that work search requirements of some form in normal economic times can compel workers to find their next job and reduce their time on unemployment. But the pandemic has added a new layer to a debate over how to balance relief with the presumption that joblessness is only transitory. Most states cut off unemployment benefits after 26 weeks.
Business groups say bringing back work search requirements will help juice the labor market and dissuade workers from waiting to return to their old employers or holding out for remote or better-paying jobs.
Opponents contend that the mandate keeps undue numbers of Americans from continuing to receive needed benefits because it can be hard to meet the sometimes arduous requirements, including documenting the search efforts. And they say workers may be forced to apply for and accept lower-paying or less-satisfying jobs at a time when the pandemic has caused some to reassess the way they think about their work, their family needs and their prospects.
“I think the work search requirement is necessary as an economist,” said Marta Lachowska, an economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich., who has studied the effects of work search requirements on employment. But she added, “Perhaps given the big disruption we have observed to the labor market, people should be given some slack.”
In Washington, the issue has become part of a larger clash over jobless benefits that intensified after the disappointing April jobs report, with Republicans asserting that Mr. Biden’s policies are deterring people from looking for work and holding back the economic recovery.
A rising number of Republican governors have taken matters into their own hands, moving to end a weekly $300 unemployment supplement and other federally funded emergency assistance that otherwise isn’t due to expire until September.
Job openings rose in March to 8.1 million, the Labor Department reported on Tuesday, yet there are more than eight million fewer people working than before the pandemic. Economists ascribe some of the incongruity to a temporary mismatch between the jobs on offer and the skills or background of those looking for work. They say that in a recovering labor market like the current one, there may not be enough suitable jobs for people seeking re-employment, which can frustrate workers and drive them to apply to positions haphazardly.
That has been the case for Rie Wilson, 45, who worked in venue sales for a nonprofit in New York City before she lost her job last summer.
To fulfill New York’s work search requirement, which generally makes unemployment applicants complete at least three job search activities each week, Ms. Wilson has had to apply for positions she would not typically consider, like administrative assistant jobs, she said.
The prospect of accepting such a job makes her anxious.
“There is always a thought in my mind that, ‘Well, what if I do get pulled in this direction just because I’m being forced to apply for these jobs? What does that look like for my career?’” she said.
The process has been time-consuming, she said, “and it’s also a mental wear and tear because you’re literally pulled from all angles in a very stressful situation.”
Alexa Tapia, the unemployment insurance campaign coordinator at the National Employment Law Project, a worker advocacy group, said work search requirements “harm more than they help,” especially during the pandemic.
In particular, she said, such requirements perpetuate systemic racism by trapping people of color, especially women, in underpaid work with fewer benefits. And she noted that people of color were more likely to be denied benefits on the basis of such requirements.
With state unemployment offices already overtaxed, she added, work search requirements are “just another barrier being put to claimants, and it can be a very demoralizing barrier.”
In states that have reinstated work search requirements, worker advocates say an especially frustrating obstacle has been a lack of guidance.
Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center, which works with low-income South Carolinians, said unemployed workers in the state largely wanted to go back to work. But the information on the state’s website about work search requirements is so confusing, she said, that she worries workers won’t understand it.
Before the state reimposed the requirements last month, Ms. Berkowitz sent a marked-up copy of the proposed language to the chief of staff at the South Carolina Department of Employment and Workforce urging clarifications and changes. One of her biggest concerns was that the language as it stood was at a 12th-grade reading level, while the typical reading level of adult Americans is much lower. She did not hear back. “It was crickets,” she said.
More broadly, employees in South Carolina, where the minimum wage is $7.25 an hour, can be reluctant to take a job that pays less than the one they had before the pandemic, Ms. Berkowitz said.
“It’s not that they are below taking a job that makes a lot less, but their financial needs are high enough that they need to continue to make a certain salary,” she said.
Although work search requirements have become a political issue, their restoration does not fall solely along partisan lines. Florida, for instance, where the Republican governor has repeatedly flouted virus restrictions, had kept the work search waiver in place before announcing recently that it would reinstate the requirement at the end of the month.
But many other states, particularly Republican ones, have rushed to bring their work search requirements back.
That is what Crista San Martin found when they left their job out of health concerns at a dog boarding facility in Cypress, Texas, which reinstated its work search requirement in November.
Mx. San Martin, 27, who uses the pronouns they and them, said there were very few job openings near them in the pet care industry, making finding a position onerous.
“That made it really difficult for me to log any work searches, because there simply weren’t enough jobs that I would actually want to take for my career,” they said. The first job they applied to was at a Panera, “which is not in my field of interest at all.”
Above all, applying to arbitrary jobs felt risky, they said, because there was no way to assess potential employers’ Covid-19 safety protocols. Mx. San Martin has since returned to their old job.
“It’s pretty unfair,” they said. “Going out and just casting a wide net and seeing whether a random business will take you is not safe.”