Where have all the workers gone? Americans aren’t flocking back to work, and Democrats and Republicans argue over why

President Joe Biden’s jobs report made for dismal reading, but companies are crying out for workers. With some states even offering cash bonuses to get people off benefits, why aren’t the unemployed pulling on their work boots?

Biden’s April jobs report was a flop, with 266,000 new jobs added that month, around a quarter of the million expected by economists. Considering the unemployment rate also rose to 6.1%, one would imagine that job openings were thin on the ground, but that’s not true.

Figures released by the Bureau of Labor Statistics last week showed that there were 8.1 million job openings at the beginning of April, the highest number recorded since measurement began in December 2000. Furthermore, state governments are begging unemployed people to fill these positions. Connecticut Governor Ned Lamont (D) announced on Monday that the state will hand out one-time payments of $1,000 to 10,000 “long-term unemployed" residents who find work before the end of the year, as well as requiring people on benefits to accept work if offered.

Lamont isn’t the only governor trying to prod his people back to work. Montana’s Greg Gianforte (R) will pay unemployed residents $1,200 to take up work, while pulling the state out of federal unemployment benefit programs enacted since the start of the Covid-19 pandemic. Altogether, 16 states have canceled these expanded benefits as of last week.

Companies are offering incentives too. Amazon, McDonald’s and Chipotle have all hiked their wages, while hotels and hospitality businesses across the country are offering sign-on bonuses to lure in enough staff to cover a surge in demand after a year of closure. 

With the conditions right, why aren’t more people working? Republicans have blamed the lackluster take-up on Biden’s overly generous unemployment benefits. The president’s $1.9 trillion American Rescue Plan, signed in March, didn’t just deposit $1,400 checks into people’s bank accounts. It also extended enhanced federal unemployment benefits through September, guaranteeing the unemployed an extra $300 per week on top of their state benefits.

This top-up means an unemployed person in Colorado right now can take home $699 per week in state and federal benefits – the equivalent of working for nearly 60 hours in McDonald’s. Colorado, however, offers a relatively generous minimum wage of $12 per hour. In Tennessee, for example, where the minimum wage is fixed at the national $7.25 per hour, unemployed workers currently receive $528 per week. Working at McDonald’s, it would take a worker 66 hours to match that paycheck. Note that all figures from McDonald’s do not take into account the restaurant’s recently announced pay hikes.

“We’ve been warning about this predictable crisis for a year now,” Senator Ben Sasse (R-Nevada) said in a statement last week. “Americans want to work, but the federal government is paying more for unemployment than for work. Well-meaning but stupidly designed policy is holding Main Street back.”

Biden has pooh-poohed these age-old Republican arguments against benefits. Earlier this month, he declared that “we don’t see much evidence” that “people are being paid to stay home, rather than go to work.”

Democrats have offered alternative arguments in their place. A sympathetic article in Politico earlier this month identified lingering fears of Covid-19, the lack of childcare options for kids learning remotely, and an increase in early retirements since the pandemic struck as reasons for the labor shortage. 

No matter the reason, Biden will inevitably be judged on his ability to restart the American economy, just as he has asked to be judged on the success of his vaccine rollout. Whether Republican sticks (all of the states that have suspended federal benefits are governed by Republicans), Democratic carrots (such as those offered by Connecticut), or free-market-driven wage hikes and bonuses manage to resolve the brewing crisis, will be decided in the coming months. 

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