States that ended jobless benefits early saw no difference in job growth compared to those that kept them
SOUTHFIELD, Mich. - Pandemic-era jobless benefits, which had been renewed twice before, have ended for millions of Americans on Labor Day.
Even as the economy continues its rebound from the 2020 collapse that preceded several waves of COVID-19 infections, some 7.5 million citizens will see the added $300 that were tacked onto state unemployment aid cease.
That includes several hundred thousand Michigan residents. Some economists and lawmakers see the conclusion of those benefits as necessary - arguing they provide a disincentive for going back to work and thus dragging down the state's ability to boost employment. But others say it's not that simple.
Between states that ended jobless benefits early and those - like Michigan - that didn't, there was little change in the unemployment rate, says Dr. Michael Greiner, a business school professor at Oakland University.
"There was essentially no difference in jobs growth, based upon the ending of unemployment benefits so it really shows that's not what is keeping people at home and I think the story is much more complicated," he said.
That story includes a still-very real and dangerous virus leapfrogging between citizens, as well as larger labor trends among people and families that may not be interested in returning to the same job.
"The fact that we have the delta variant increasing now has really what resulted in this slowdown of the increase in employment of the last month or so," Greiner said. "As you pointed out, the economy was increasing and this is again on a seasonally adjusted basis by about a million jobs per month.
"Obviously, we didn't do as good a job last month, but really, it seems that's directly related to the situation with the delta variant. People are afraid of going back to work," he added.
Yet small businesses, desperate to manage the surge in customers after dips in revenue from 2020, have been unable to find new workers. That's after four-figure bonuses and increased wages.
"The business owners are right, there is this problem with hiring employees. But what I'm saying is over the past couple of months that people have been off, their circumstances have changed and they've decided they don't necessarily want to go back to that same job that they had before," Greiner said. "They may have had their kids off from school and decide they want to stay off with them."
Then there are workers getting up there in age who have decided they don't want to go back to work.
What isn't up for debate is the trillions of dollars that have been printed to keep up with the country's recovery. That dynamic has prompted concerns of inflation. But, as Greiner explains, the story isn't that simple.
"That would have been the case say 50 years ago. But now, it's not such a big issue because the fact there is this global market for the American dollar," Greiner said. "Interest rates, if you look at them, are still extremely low - basically we're at zero. So that shows that it's not really an issue and when you tease apart the inflation that has been going on late recently, it's just a couple of items that have been driving the increase in prices."