Economics Correspondent Says Few People Opt For Unemployment Over Work

Originally published on May 16, 2021 11:53 pm
Copyright 2021 NPR. To see more, visit https://www.npr.org.

MICHEL MARTIN, HOST:

As the U.S. economy continues to recover from the lockdowns and other limits imposed during the pandemic, some employers say they are finding it hard to attract people to fill openings as their activities ramp back up. This despite the fact that millions of jobs disappeared over the last year. And that's given rise to a debate. Some, mainly on the conservative side at this point, say those enhanced federal unemployment benefits make it more attractive for people to stay home than to get back out to work. That's the argument cited by a number of Republican governors who are opting out of that federal unemployment program. And in a few minutes, we're going to hear from a conservative-leaning economist on that argument.

But first, we're joined by Washington Post economics correspondent Heather Long. She has been covering the economic recovery and talking to unemployed workers to hear what they have to say. Heather Long, welcome. Thanks for joining us.

HEATHER LONG: Thank you. Good to be here.

MARTIN: So let's just, first of all, talk about those - the numbers that just came out last week. The number of job openings in the U.S. rose to an all-time high of 8.1 million in March. That's according to the Labor Department. And as we mentioned, many are blaming the federal unemployment insurance, which adds an extra $300 to state unemployment aid for discouraging people from taking these jobs. Is there any truth to that?

LONG: I talk to unemployed people nearly every day, and I would say it like this. If you ask me, have I talked to at least one person who is not going back to work because they are making more money on unemployment - so they get an extra 300 from the federal government, and the average payment for most states is around $300, so a total of about 600 a week right now. And that works out to about $15 an hour job. So yes, I have spoken to some people who are not going back and are discouraged by that extra money, but that is a very small number of people. The vast majority - I'm talking 9 out of 10 - of people that I speak to are - say one of three things. No. 1, they're still a little bit hesitant with the health situation. People are still getting vaccinated, waiting to clear that two weeks after their second shot.

No. 2 that I hear a ton, particularly from women, is child care issues. A number of schools obviously have reopened, but oftentimes they're only open in person two or three days a week. And it's still really a challenge to juggle these schedules of the children with trying to get back to work. You saw in April that all the jobs added actually went to men, which is another red flag that we've still got some issues getting women and the child care issues sorted out.

And the third thing that was the headline of my story that I wrote about is I hear - I think it's too simplistic to sit here and say, oh, people are getting paid too much not to work. What they're really going on here is - and this is for high-income workers and low-income workers who I speak to - the past year has been traumatic. It has been harrowing. It has been really tough. And it's caused people to reassess their life, to reassess what they want to do career-wise, to reassess whether they want to work in an office or at home or outdoors and to reassess their work-life balance.

And so what I hear from a lot of people right now is, I'm not taking the job at McDonald's that's open down the street because I want to retrain and maybe be a wind turbine technician, or I want to go and work in education, or I want to go and work in a warehouse instead of at a department store. So people are making these shifts - once-in-a-lifetime shifts.

MARTIN: Is another factor here what companies are offering? Speaking of McDonald's, we know that McDonald's made headlines when it announced it would raise its starting wages at company-owned restaurants to $17 an hour. But that doesn't affect 95% of McDonald's restaurants in the U.S. that are independently owned, according to The New York Times. So is pay an issue?

LONG: It's definitely a factor, and particularly at this moment where people are still on the sidelines because of the child care issues or because of reassessing what they want to do with their life. It's interesting. I did a big analysis of the April data, and what I found - my colleague and I found - was these restaurant jobs and hospitality jobs have increased pay about a dollar compared to pre-pandemic. But the average is still just basically what you quoted for McDonald's. It's still just shy of $18. And that may be more than it was pre-pandemic, but you have to understand that also, other professions have raised their pay, like warehouses, which have exploded with all this online ordering. They are now offering close to $25 an hour on average.

So if you're one of those people who's even sitting here debating, should I go back to work or not right now, what job should I go back to, obviously, 17 versus $25, that's a pretty easy - a pretty easy choice for a lot of people to make. And I know - I do think it's important to stress that at the moment you use that number, we have over 8 million jobs that are open, and we have over 8 million unemployed people still who are trying to get back to work. We do anticipate more people will come back this summer and certainly by September as these other issues are sorted out - the health concerns come down and the child care issues - schools reopen and day cares reopen.

MARTIN: So before we let you go, can you just riff a few minutes on something you brought up earlier, the - sort of the long tail of psychological effect of this pandemic? What else do you see there? Do you - more early retirements, more people starting businesses, people being afraid to start businesses? What are you seeing out there? I'm not asking - this is obviously not a scientific question, but I'm just interested based on your reporting, like - because what are people telling you?

LONG: Yeah, you're right. That's - I should have said there are a surprising number of retirements. But I think what I'm seeing going forward, you know, I would say three things. No. 1, we do expect some heavy months of hiring this summer. No. 2 is I do think people need to remember that they're going to be going back to probably different types of jobs. And so what I hear a lot of is people saying I worked for 10, 15 years at a restaurant or a retail, and now I'm using - I've used some of this time in the past year to try to retrain, to try to take an online course or go to a community college. That's positive to me.

The last thing you mentioned was people starting their own businesses. That's actually been one of the few - I hate to use the word silver lining. There's, like, no silver linings from this pandemic, but we have seen a startlingly high number of job - of new business formation, is the technical term, of people starting their own business. And I think that's potentially a positive trend. We'll see if it keeps up after this summer, if we do have - or if people are lured back to those more traditional jobs.

MARTIN: That was Heather Long, economics correspondent at The Washington Post. Heather Long, thank you so much for talking to us.

LONG: Thanks, Michel. Transcript provided by NPR, Copyright NPR.