A robust rise in job openings in the U.S. market has not translated into a comparable recovery of labor force participation, as many businesses are struggling to hire employees, Friday reports show.
The Labor Department’s long-awaited Friday employment report showed a rather underwhelming statistic on employment rise which shrank from 770,000 in March to only 266,000 in April, leaving the unemployment rate almost unchanged at 6.1%.
Heated debates on the causes of this trend have ensued, with some experts arguing that the current unemployment benefits may be too generous, according to Reuters.
From the @WSJ article on “Millions Are Unemployed. Why Can’t Companies Find Workers?”
Published ahead of today’s monthly US #jobs report, this will help put into perspective not just the composition of the expected hiring surge but also the outlook for future jobs and wage growth pic.twitter.com/a3QW7USM7J
— Mohamed A. El-Erian (@elerianm) May 7, 2021
The $1.9 trillion relief package passed by Congress in March extended unemployment benefit payments of $300 through September. Analysts say this may have exacerbated the general unwillingness of the jobless to join back the labor force, since receiving the benefits, which average at $318 a week, brings in more income than working full time for $15 an hour, according to the Wall Street Journal.
More than 16.5 million people received some type of unemployment benefits mid-April, according to the WSJ. (RELATED: April Job Growth Was Far Short Of Expectations. Here’s Why Hiring Slowed)
“I really enjoyed what I did,” Lorne Zaman, who lost his job due to the pandemic and has been living off savings, stimulus checks and unemployment benefits ever since, told the WSJ. “If the government is going to pay you to stay home, you’re going to do that unless that job you really want comes along.”
A study by the University of Chicago found that 42% of recipients of the unemployment benefits get more than they did at their prior jobs, according to the WSJ.
“The benefits are a policy mistake that is going to hold back the recovery in the coming months,” Dr. Adam Ozimek, chief economist at freelance platform Upwork, told the WSJ.