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Employers Are Baffled as U.S. Benefits End and Jobs Go Begging By Bloomberg


© Reuters. Employers Are Baffled as U.S. Benefits End and Jobs Go Begging

(Bloomberg) — Emergency unemployment benefits in the U.S. expired two weeks ago, but employers who expected an increase in job applications are still largely waiting for them to roll in. 

The federal programs, which offered $300 more per week to jobless Americans and extended benefits for long-term unemployed people as well as special assistance for self-employed workers, expired September 6. As the financial assistance was cut off, economists and businesses expected that workers would be interested in the program. This could provide an incentive for them to return to work. 

That hasn’t happened, according to employers across industries.

“People who have been on the sidelines have by and large stayed on the sidelines,” said Richard Wahlquist, president of the American Staffing Association, the country’s largest recruitment-industry group. “Nothing has changed in regard to the benefits that have fallen off and the need for people continues to grow.”

Even Wahlquist is struggling. He’s looking for 10 temporary workers to help at the organization’s conference in Denver at the end of the month, paying as much as $25 an hour. So far, only two of the applicants have been found. 

Business and staffing agencies across the country haven’t seen an increase in employee numbers. Goldman Sachs Group Inc (NYSE:). Economists predicted that by the end of this year, the federal program, which was in effect for half the states of the United States, and the remainder ending benefits earlier, there would be an additional 1.3 million workers on payrolls. Analysts also suggested that the end of the federal program would increase labor supply. 

Although there was an increase of people applying for benefits in the week that ended on Sept. 11, data showing jobless claims showed no change, Hurricane Ida did affect the data. In the meantime, the great labor shortage isn’t letting up, with a record 10.9 million job openings in July. 

“We’re only going to see the impact of the federal UI benefits ending a couple of months from now — I don’t think we’re going to see a big spike one way or another really,” said AnnElizabeth Konkel, an economist at Indeed Inc. “We thought things should be better by Labor Day and they’re not.”

One reason could be pent-up savings, according to Daniel Zhao, senior economist at Glassdoor Inc. A record 34% savings rate was achieved last year due to the use of stimuli checks, increased unemployment benefits, and expanded social security nets. This figure remained high at 9.6% in July. 

Joanie Bily, chief workforce analyst at Atlanta-based EmployBridge, was one of the people who thought that her company would see a “significant increase” in the number of online applications once boosted benefits ended.

“I’ve been asking all of our locations across the U.S.: ‘Are you busier? How does it feel since the benefits have ended?’” said Bily, whose firm connects employees with companies across the U.S., focusing on manufacturing, logistics and call centers. “I pulled the data last night and I thought it would be better, but it’s not.”

Applications increased about 10% in the two dozen states states that ended emergency benefits early — but that was also a boost that lasted only a few weeks, she said.

In the company’s offices in California, the most populous state with recently ended benefits, managers told her there is a slight boost in inquiries for administrative work but “it’s too soon to tell.”

In the restaurant industry, job applications have declined about 3% to 4% each week for the past nine weeks, including the period following the expiry of boosted benefits, according to Restaurant365, a restaurant-management software company.

That’s “contrary to many predictions that aid was the primary factor keeping restaurant workers out of the workforce,” said Tony Smith, CEO and co-founder of the company.

Many factors are responsible for missing workers: childcare issues, skill mismatches and health concerns, particularly in the service industry, as well as mass reallocation of jobs when people consider changing careers.

“As people look at their bank accounts and realize we’re coming to the holiday season, we hope people have more incentive to come back,” said ASA’s Wahlquist.  

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