How Biden benefits are stifling economic recovery as average weekly unemployment payments nearly DOUBLE in two years
AS AMERICAN industry battles back after nearly flatlining from the pandemic recession to recovery, there's a shortage of both will and manpower to meet the growing labor demand.
Dragging the economy into borderline stagnancy is the residual effects of President Biden’s $1.9trillion American Rescue Plan, which was pushed through Congress to secure a lifeline for those financially battered from Covid-19 disease.
Instead, the $300-a-week stimulus benefit from the federal government plus state payments of $320 – has flushed the workforce with higher earnings than many might get if they were punching the job clock.
The combined unemployment payments are nearly twice as much compared to two years ago when the combined total worked out to $348 per week.
Essentially, anyone who would normally make a $32,000 a year take-home pay can now potentially receive that or more income from unemployment, according to the Associated Press, citing Bank of America economists.
“Demand is outpacing supply,” job-seeking site Glassdoor’s senior economist Daniel Zhao told the AP.
“That’s something that is occurring across the economy, in semiconductors to lumber, and we’re seeing a similar crunch in the labor market.”
Much of the problem is that speculators thought the recovery would slowly grow back over a nine-month stretch.
Instead, businesses are seeing pre-pandemic sales numbers now, even when there are still some places with limited capacity constraints being imposed.
“Well, it only took three months,” Steven Tamasi, CEO of medical device manufacturer, Boston Centerless, told the AP.
“It happened so fast, people were caught off guard.”
Criticism of the government’s potential excessive incentivization followed Friday’s announcement by the Bureau of Labor Statistics that the US economy added only 266,000 jobs in April – way down on the forecasts that the country added 975,000.
Biden attempted to show that the recovery was meant to properly kick in after several months and to not be too skeptical despite the smaller-than-expected growth.
The bigger problem, he raised during a speech on Friday, was that the “economy has eight million fewer jobs than when the pandemic started”.
“More workers are looking for jobs and many can’t find them," he said.
“We should be clear about the policy failure at work here,” Sen. Ben Sasse (R-Neb.) said in a statement to the New York Post.
He continued: “There are 7,400,000 jobs open in the US — but fewer than 300,000 people found new work last month.
"Why? This tragedy is what happens when Washington know-it-alls decide to pretend they’re generous by paying more for unemployment than for work.
"This obviously hurts our economy, but more precisely, this hurts people on every Main Street in the nation.”
House Minority Leader Kevin McCarthy (R-Calif.) suggested the stay-at-home mentality plaguing the country while the population is getting immunized and jobs are freeing up – is failing.
He tweeted: “it’s clear the best thing to do is end the crisis-era policies & get Americans back to work.”
U.S. Chamber of Commerce Executive Vice President and Chief Policy Officer Neil Bradley is also concerned the slouching effect of the stimulus is doing serious harm.
“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” he said in a released statement.
Novel efforts were already being announced to inspire out-of-work Americans to ditch the stimulus.
On Tuesday Montana Gov. Greg Gianforte announced the state would dangle a $1,200 “return-to-work bonus" for those getting unemployment checks as of this week and who in turn were hired and stayed on job for at least four weeks.
"Our return-to-work bonus and the return to pre-pandemic unemployment programs will help get more Montanans back to work,” Gianforte said in a statement.
On Thursday, South Carolina Gov. Henry McMaster also announced that come June 30, he intends to "terminate" all federal, pandemic-related unemployment benefit programs.
He blamed the stimulus checks for creating "a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace.”
Marie M., who asked to withhold her last name to not compromise her job hunt, said she lost her two restaurant gigs in Los Angeles once the pandemic shut down the country, according to the AP.
But her unemployment benefits since she was pink slipped totaled $30,000.
That means she is earning the same amount of money while being out of work as she would be if she were holding down the two service industry positions before Covid-19 struck.
“Unemployment benefits have been like collective bargaining,” she told the AP.
“They made a union out of all of us.”
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