With the economy showing evidence of steady recovery, federal aid incentivizing unemployment may soon be a bigger problem for the job market than pandemic layoffs.
Thursday’s Labor Department report showed 547,000 first-time unemployment claims this week, marking the second straight week of record-low initial jobless claims since the pandemic’s start.
The unemployment rate dropped from 6.2 to 6 percent last month as employers added 916,000 jobs. Of late, jobless numbers have consistently come in lower than economists predicted.
For 54 of the last 56 weeks, weekly unemployment claims were well above the pre-pandemic record of 695,000, but vaccinations are finally setting the country on the road back to pre-COVID life.
But the new obstacle to normalcy is federal relief aid, which now seems largely unnecessary and is actually encouraging some to pass on taking new jobs.
Through September, President Joe Biden’s Federal Pandemic Unemployment Compensation doles out $300 a week atop regular state unemployment benefits. In New York City, the benefit’s as much as $804 a week, equal to pay for a $20-an-hour job in a 40-hour workweek. Restaurants and other hospitality-sector businesses have resorted to offering signing bonuses or even checks just for coming to an interview.
Aside from efforts to ramp up vaccinations, Biden’s policies aren’t helping end this crisis, they’re extending it.