Job searches jumped by 5 percent in 22 Republican-led states on the day each announced it was moving to end the Biden administration’s pandemic unemployment benefit boost, a Thursday analysis shows, suggesting a link between the jobless compensation top-up and peoples’ interest in looking for a job.
“It is, of course, still unclear how this temporary boost in search activity will affect hiring or wages,” Kolko wrote in the analysis. “And the premature end of these benefits in June and July could well have a different effect on search activity, hiring, and wages than these announcements in May did,” he added.
A possible factor as to why the effect faded quickly is media buzz around the date of the announcement, as well as the opt-outs of the supplemental federal unemployment programs are not due to come into force until June or July. Kolko told the Washington Examiner that there could be a jump in job searches when the benefits actually expire.
“It depends how aware people are for starters, but I think even more importantly it depends on how much else is going on with the labor market and the pandemic that might also affect peoples’ search behaviors,” Kolko told the outlet.
Kolko’s analysis also showed that from announcement day to three days later, a state’s share of national job search clicks was up on average between 3 and 4 percent, relative to the national trend, before dropping back down to the April baseline on day eight.
Florida, for example, is ending the $300 supplement but maintaining its participation in other federal programs—Pandemic Unemployment Assistance, Pandemic Emergency Unemployment Compensation, and Mixed Earners Unemployment Compensation—which all expire in September.
The degree to which the federal weekly unemployment boost is creating a disincentive for people to take jobs has become a matter of heated debate. Business groups and Republican leaders argue that the payments are having a substantial impact, while members of the Biden administration—including President Joe Biden and Treasury Secretary Janet Yellen—argue that the impact is negligible, blaming the hiring crunch on factors like child care needs amid pandemic-driven school closures.
“The disincentive effect of these benefits is very hard to measure since they coincide with numerous other factors potentially affecting labor supply, like health risks, caregiving challenges, and eagerness to enjoy a vaccinated, reopened summer,” Kolko noted in the analysis.
To date, Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wyoming all plan to end the $300 boost ahead of its expiration in September, while at least 19 of the states also plan to opt out of the other federal unemployment benefit programs.
Republican leaders in the states that are opting out of the federal unemployment programs have said they are responding to the hiring woes of businesses that have been complaining about a lack of workers to fill available jobs.
