No single reason behind current labor shortage, economics expert says

Study finds receiving benefits intensify job searches

No single reason behind current labor shortage, economics expert says
No single reason behind current labor shortage, economics expert says

SAN ANTONIO – Generous unemployment and COVID-19 relief benefits are not why many people aren’t going back to work yet, according to a study by the Federal Reserve Bank of Chicago.

On Monday, President Joe Biden said, “We’re going to make it clear that anyone collecting unemployment, who is offered a suitable job, must take the job or lose their unemployment benefits. There are a few COVID-19 related exceptions, so that people aren’t forced to choose between their basic safety and a paycheck, but otherwise that’s the law.

According to the study, those receiving benefits “search intensely for new work, and their effort appears to be somewhat greater than that of the unemployed not receiving benefits.”

“I think there’s a lot of validity to the findings of that study,” said Thomas Tunstall, Ph.D., the executive director of the UTSA Institute for Economic Development. “I think it’s fair to say most people don’t want to sit at home.”

Tunstall said those receiving benefits know that the money will run out eventually. In the meantime, they can afford to hire someone to take care of their children while they look for work, pay for transportation, and perhaps buy new clothes to wear to their job interviews.

Tunstall said that’s important since poverty imposes “a significant mental tax” on people.

“It makes it harder to look for work, to find work, to be at your best at a job interview,” Tunstall said.

He said more employers are trying to compensate for the hesitancy to return to work, especially among low-wage earners.

“I think companies are compensating for this by starting to pay their employees more,” Tunstall said.

He also pointed out that it’s been a decade since Congress raised the minimum wage.

We’ve been kind of overdue for this discussion for a long time,” Tunstall said.

Perhaps, he said, that could be “one of the silver linings” to the pandemic.

Since the additional government benefits were just recently sent out, Tunstall said the situation could be changing at some point, so more research is needed.

“It seems like we always want to find the one reason something is occurring,” Tunstall said. “But there’s lots of sides to this story.”

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