Melissa Harris-Perry: I'm Melissa Harris-Perry, and this is The Takeaway. Good to have you with us.
This week began with Labor Day but in a wicked contradiction. Monday was also the day that 7.5 million workers lost their COVID era expanded federal unemployment benefits. President Joe Biden declined to extend the benefits before they expired and to be clear, we are still very much in the COVID era. Washington lawmakers have been battling over these benefits since the earliest days of the pandemic.
Democrats initially argued that the unprecedented economic crisis precipitated by the pandemic required a more robust economic safety net and most of those democrats champion the expanded benefits from the outset, but as the pandemic moved into its second year, Republicans and some Democrats have sought to terminate those benefits, claiming that the additional resources were deterring Americans from returning to work or seeking new jobs. Indeed, several republican led states ended the expanded benefits early, in some cases, months before the Labor Day expiration. Here's Texas Governor Greg Abbott on CNBC back in May.
Greg Abbott: We have the demand for the workforce where people can get back to work, the numbers are safe enough in our state for people to get back to work. It is time for America to get back to work.
Melissa Harris-Perry: Here's Arkansas governor, Asa Hutchinson speaking on Fox News in June.
Asa Hutchinson: It immediately send a signal to workers out there that you need to return to work. If you need training, we can provide training to you. If you need childcare assistance, we're going to have that assistance available to you.
Melissa Harris-Perry: Lately, it seems the battle's over, a bipartisan consensus has emerged, and a majority of lawmakers from both parties seem pretty disinterested in maintaining these expanded unemployment benefits. In fact, their expiration this week was met with silence across the partisan divide. Here's Labor Secretary Marty Walsh on the Today Show this past Monday, discussing how the Biden administration is now passing the buck to the States.
Marty Walsh: Today was the day that the $300 extension will end. We've allowed governors, if they need to look at using rescue plan money, to extend the unemployment benefit in their state if they need to.
Melissa Harris-Perry: Where does this leave the millions of Americans who relied on these benefits? For more on this, I spoke with Heather Long, economics correspondent for The Washington Post, and on Annelies Goger Fellows at Brookings Metro at the Brookings Institution. I started by asking Annelies to clarify the specific unemployment benefits that ended.
Annelies Goger: In normal times, we have a largely state-run unemployment system, what many people call regular unemployment insurance but during the pandemic, Congress had to step in because most of the workers impacted by the pandemic were not eligible for that regular unemployment insurance for various reasons and so we had to create actually three whole new programs in the middle of the crisis and it's those emergency programs that expired on Labor Day.
That includes one program to cover workers, like gig workers, self-employed, people who normally would categorically not qualify, including people who are part-time or didn't earn enough and then another category was extended benefits so if you're a long term unemployed, due to the economy, then they were offering extended benefits up to 53 weeks and normally it ends at 26 in most states, and then the third is the unemployment supplement, which was the most controversial, which initially was around $600, and has more recently been reduced to around $300.
As of Labor Day, all three of those things go away so the only thing left is the regular state unemployment insurance, which actually covers a pretty small share of people's previous income, although it varies from state to state. It can be as low as just around $100 to $200 a week, and then to a high around 400 or 500 a week, so that's very concerning because these emergency programs did a lot to address a lot of the structural inequities and outdated nature of the safety net.
Melissa Harris-Perry: Heather, maybe you can pick up there where Annelies just left off about what these benefits did. Obviously, they were in place for long enough for us to have at least some understanding of what their impact was.
Heather Long: Well, there was a huge impact and we just saw some new data come out in the last few days that shows us that a big reason that hunger did not spike as high as everyone was really concerned about during 2020, during the worst of the crisis is because of the government stepping in and giving more generous unemployment aid and those three stimulus checks that went out so literally was keeping people's lights on and keeping people fed during this crisis.
It's also interesting, we had a little bit of a test case this, summer 22 states led mainly by Republican governors did do a way early with those benefits so they essentially did what happened nationwide on Labor Day, in June or July. The early evidence from those states that rolled back early is pretty telling. There was no big increase in those states in employment.
These arguments that these more generous unemployment benefits were keeping people from returning to jobs does not seem to be the case, at least right away but at the same time, some data indicates that hunger rose in those states as unemployment benefits went away and hardship paying bills went up again and interestingly, a lot of those state economies had a little bit of a ding because that money, obviously, it's so critically needed right now and people spend it right away, and they spend it on groceries, they spend it on rent, they spend it on fixing their car and so when all of that money suddenly ends overnight, we expect to see a little bit of hit on the economy.
Melissa Harris-Perry: This an interesting point right that in an economy that is struggling in the ways that our's has in the context of the pandemic, that giving consumers money to consume their basic needs, also stimulates the economy. Annelies, I wonder if you can dig in a little bit here, where on this assumption that Heather was naming for us that we've heard repeated a lot in recent months, that the reason that there are so many job openings, that there's a tight labor market is because of these overly generous unemployment benefits that are keeping people from going back to work.
Annelies Goger: This, frankly, is an old trope, where you're blaming the lazy worker for the state of the economy and it's really clear to me that if you look at all the evidence, there have been several studies so far and although there are small micro-level changes, like in the states that took those away, early, out of nine workers, one may have been employed by the end of the month, the other eight would still be unemployed and so I think, partly what's going on here is that, first of all, the pandemic is at a much greater scale of unemployment than previous recessions.
On Labor Day, around seven and a half million workers were estimated to have lost benefits and in previous recessions, it was in the range of one to 2 million. Another issue, though, is clearly that the pandemic is creating all kinds of complexities for people in their decisions about where to go to work, and how to navigate this economy because their lives are more unstable. They may have children at home and not have child care.
They may have health issues or a family member who has health issues and so I just think that most workers are thinking about a much wider range of things than maybe they used to pre-pandemic. For example, if a job doesn't have health insurance or sick leave, that could be a much bigger deal right now for a worker and so the scale combined with complexity makes this entire labor market extremely tumultuous and it can take a really long time, even in a normal economy, for someone to find another job, and also for an employer to find a good candidate for a job and so we see a lot of churn and uncertainty.
I would be really hesitant to just say, "Well, it's workers that are being lazy," because there's really not much evidence that that's true and there's a lot more evidence that as Heather was saying earlier, that these benefits actually kept the economy afloat so I think we need to start thinking about what would have been the cost if we had allowed the economy to tank and allow all those impacts to happen both at the individual or family level, but even at the society level of just the downward spiral that can happen when you don't use economic stabilizers like unemployment insurance.
Melissa Harris-Perry: Well, coming back around [unintelligible 00:09:21] not only to the individual household but also to the effect on the economy writ large. Can you just help give us a little bit of a temperature check where is the economy right now, what does job creation look like, and maybe also as Annelise was hinting at here, not only jobs but jobs of a particular kind those that might have things like sick leave and health insurance?
Heather Long: t's such a confusing time for the economy. On the one hand, if you look at the normal metrics that economists like to look at it, things look pretty good. We're having some of the strongest economic growth that we've had since early 1980s the economy has a record number of job openings. We just got data this week that showed nearly 11 million job openings in July, something we've just never seen before. When you look at that, you think, "Oh, this economy is humming. Things have really bounced back a about 75% of the jobs lost during the pandemic have come back." On the flip side, you also see that this is an economy that still has 8.4 million unemployed Americans, which is a really high number.
When you dig into who those people are, you see that still, there's a very high struggle to get jobs back for particularly Black women and Hispanic women and Americans who do not have college degrees. This is an economy that looks like it's firing, but it's not working for everyone. I will point out that the most read article on the watch Washington post over the labor day weekend was actually a piece with the headline of, Why America has 8.4 million unemployed people, and over 10 million job openings.
A couple of points, some of which Annelies was just making about why this is happening. Why can't those unemployed people just take these jobs. I would point out three quick things. Number one, there's obviously a pandemic still going on. Number two, is this mismatch. I explain it to people like this. Yes, there's a ton of job openings, but they are not necessarily in the locations or the industries where the unemployed are. We've seen this boom and suburbs lately, particularly wealthy suburbs that people flock to during the pandemic.
If you go to the malls in those areas, it looks like there is no pandemic right now, but that's not where a lot of workers, particularly struggling workers live near those places and there's not usually good public transit to get there. The final one is about 40% of the unemployed. Over 3 million of the unemployed have been unemployed for more than six months.
What we call long term unemployed. We know from history that it's hard for people who have those kind of gaps on their resume, even though most people understand it's because of the pandemic, it's hard for those people to find a right away. I had written about a warehouse worker with forklift driver certification. One of those licenses, everybody thinks is so in demand right now. It took him months to find a new job, even with a qualification like that. There was a really interesting Harvard Business School study that just came out in the last few days that found that a lot of big companies are using robots, are using artificial intelligence.
That sound so sophisticated to scan all these resumes, but what's happening is they're actually excluding a lot of people, particularly people who haven't been working in the last few months, or I hate to say it, women who maybe took time off moms or dads to be home with kids. Anytime there's a gap on a resume, a lot of those robots are kicking those resumes out, so unemployed people are not able to get hired.
Melissa Harris-Perry: I think that insight about you can't just match workers to jobs. It's not just a puzzle where you can move the pieces wherever you want. Annelies, maybe you can also pick up on this question particularly of women who are unemployed. I think I'll never forget the headline at one point in a jobs report during the pandemic that every single job that had been lost during that period was lost by a woman worker. Is this going to potentially be a long term situation for women who may find it difficult to ever return to the workforce on the back end of the pandemic, if we could ever get to the back end of the pandemic?
Annelies Goger: The problem is that when you lose a job, oftentimes, it's very destabilizing and in some cases even traumatizing and it can affect someone's self-confidence and basically add stress in several domains of their life. This is a really difficult moment to navigate for a lot of job seekers. When you're a woman in this pandemic economy with young children, for example, the childcare responsibilities or family care responsibilities only adds to the situation because right now, for example, with the Delta variant, who knows if schools are going to close again, if there's an outbreak and it's really difficult.
One thing to keep in mind is that the US spends about a fifth of other industrialized countries on career services and what's called worker readjustment programs. The ability to go into a job center and get some career counseling and some help saying, "Hey, I lost my job in the restaurant industry. I can't be exposing myself to those risks, can you help me transition to an office job or to something where I'm not interacting with people because I have diabetes or whatever."
We don't make those services free and widely available. You have to qualify for that one-on-one or intensive service. I think there's a lot of evidence from many evaluations that those types of services are actually the most effective services we have in the workforce system. Where we don't see a lot of effectiveness is short-term trainings like the certificates you mentioned. Many people think of our workforce system and policy as just a training thing. What I like to tell people is for a lot of people, the inequality comes in in terms of access to information.
What jobs are even out there for me that would be good given my interests, my skills, my experience, how can I translate? If there's a lot of jobs in construction and infrastructure coming up with the new funding, assuming that goes through, why would we just assume that women from a hotel job might automatically fit in a construction job? We have to find other occupations that would make sense for people. There may be some women that want to go into construction. How can we support them in a very male-dominated space and make sure that they feel welcome and have access to what they need if they need to deal with unstable schedules and things like that?
Making a career transition is happening more and more in the economy, but we have been decreasing funding for all the kinds of support that people need to get a job or make a career transition. That's very concerning given disruptions like COVID. Even before that, I hope moving forward we think more about how to really support people to get a job because that should be the goal and it should be bipartisan.
Melissa Harris-Perry: Heather, let's talk about that. What should be bipartisan in the sense that one of the ways that even these federal unemployment benefits came into being was the pressure caused by the initial outbreak of the pandemic, but there seems to be a bit of pandemic fatigue at this point, even as we look at 1500 deaths a day where we're looking at Florida with one of the country's worst Delta outbreaks reporting more deaths now a day than at any other point.
States like Tennessee and South Carolina leading the country and cases per capita. It's just that we're still in the pandemic, the pandemic is still raging. Is there any appetite given that, to try to extend this support that Annelies was talking about?
Heather Long: There is no appetite and I'll mention that that's a bipartisan statement there. It was an interesting President Biden's team when they were asked about unemployment insurance going said, "Oh, the States have money from the stimulus package. If they want to use that to extend it, they can." The classic point the finger at somebody else mentality. They haven't introduced bills to and the unemployment insurance any further.
I think the key takeaway is what Annelies said at the top of our discussion which is if we had a decent state unemployment system or regular system outside of pandemic, it would be okay probably to take away or to phase out some of these additional benefits. The fact that your Lyft or Uber driver can just be cut off overnight because they're a self-employed or a gig worker, as opposed to somebody who has the regular 9:00 to 5:00 job, that they would not get unemployment insurance.
That's where the US safety net just has these gaping holes right now. The other thing I would point out that I think is interesting to watch right now with all of this is, to me, the key stat to watch in terms of, is this economy fully recovered or pretty far along is what's happening with childcare centers. It's interesting. If you look at the data in both July and August, childcare employment went down, workers are quitting, they're tired, they're burned out from this pandemic. These are really low paid jobs, unfortunately, in many cases and sometimes they don't even get healthcare benefits if they're working, taking care of children.
At the moment we are more than 10% down, still an employment in the childcare sector. Many childcare centers are worried that they might have to close and many have already close their infant rooms or their toddler rooms because of course those require more staff. You have to have at least one staff or teacher per every four babies. If there's not enough teachers, that's the first room you close, and so to me, you can see it that particularly moms, this is one of the key reasons my moms have struggled to get back into jobs right now, and it's really hampering the entire us economy, and is a real flashing crisis red light warning sign about, we are not back.
Melissa Harris-Perry: Heather Long is an economics correspondent for the Washington Post. Annelies Goger is a Fellow at Brookings Metro at the Brookings Institution. Thank you both for joining us.
Heather Long: Thank you.
Annelies Goger: Thanks for having me.
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