A new study found Americans rejected an estimated 1.84 million job offers because of unemployment benefits provided during the COVID-19 pandemic.
This confirms what we’ve been repeatedly saying here at IWF: policymakers should not use COVID-19 emergency tools to create permanent employment disincentives that distort employment markets, are magnets for fraud and risk triggering inflation.
Yet President Biden supports ongoing, COVID-related enhanced federal jobless benefits, an extra $300 weekly on top of baseline unemployment payments. As the pandemic subsides, this leaves many businesses, particularly restaurants and hotels, struggling to fill openings. Businesses attribute hiring difficulties to extra unemployment payments, leading 26 states to end enhanced payments prior to their expiration in early September.
The new study by Morning Consult released Wednesday had some striking findings about unemployment insurance (UI):
The termination of federal unemployment insurance benefits is likely to produce an estimated 1.84 million jobs through the end of the year, particularly as more UI recipients begin actively looking for work ….
Most unemployment insurance recipients know that their benefits have started to expire and feel the pressure to find jobs, likely leading them to reduce spending and save a greater share of their benefits as they transition to a more permanent source of income … Forty-five percent of those who turned down a job offer cited the generosity of UI benefits as a major reason why they did not accept the job offer, meaning that over half of the jobs that UI recipients rejected would have been rejected even if they were no longer receiving benefits.
Work is a vital component of fighting poverty. Americans working full time at least half the year are nearly 4 times less likely to be in poverty than those working part time and Americans overall, according to the Bureau of Labor Statistics.
Public policies should therefore incentivize work, not discourage it.