Free Markets

There Still Aren't Enough People Getting Back to Work

Using the process of elimination, the culprit seems clear.

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Amid rising concerns that workers are choosing to remain unemployed during the economic recovery, the May jobs report released on Friday doesn't offer much reassurance. Many labor market watchers will be quick to latch onto the seemingly good news that (1) payroll job growth almost matched economists' expectations (559,000 new jobs were reported, rather than 650,000) and (2) that the official unemployment rate dropped by 0.3 percentage points. However, the deeper data indicate that fears about labor supply problems, at least during this early stage of the recovery, are justified.

Before we start pointing fingers at potential culprits—I anticipate that you're already gathering the tar and feathers to give expanded unemployment insurance benefits their comeuppance—it's worthwhile, in the name of intellectual honesty, to explore other potential explanations.

For example, perhaps the unusually low job growth in the April report—which was quite a letdown—was a statistical blip caused by survey results that don't accurately reflect reality. If that's the case, we'd expect to see the following month return to the same trend as previous months. However, that hasn't happened. The May jobs report did show a respectable increase in the number of employed workers and the number of payroll jobs, but there wasn't a surge to make up for April's anemic growth. Nor did the regular update to the April data show much of an increase.

Alternatively, perhaps the seasonal adjustments that the Bureau of Labor Statistics applied to the data concealed a larger increase than actually occurred. Seasonal adjustments ensure that month-to-month results are comparable. Otherwise, the drawdown in holiday-season jobs would make each January look like the start of a recession. Although the raw data do show that more jobs were created in April than the seasonal adjustment suggests, this was also the case for the previous months and for May. There's no aberration here to explain the underwhelming report.

Furthermore, the raw job growth in April 2021 actually looks pretty similar to the raw job growth during April 2017, 2018, and 2019. That fact itself suggests the presence of a serious problem: During the initial stages of this economic recovery, we should expect to see job growth that is substantially faster than before the pandemic, when the economy was at full employment.

Because there doesn't seem to be anything statistically wrong with the jobs data, it's worth getting a little worried about the pace of the labor market's recovery. And the rest of the news from the May jobs report is even more concerning.

For example, the substantial decline in the official unemployment rate—which is normally a cause for celebration—is troubling. If jobless workers were shifting toward getting out of the house and back into the economy, we should see unemployment rising as people reenter the workforce and look for jobs. Given that vaccines had been widely available for a month prior to the collection of May's employment data, and that most lockdown measures had been or were in the process of being repealed, there should be some initial sign of workers rejoining the labor market.

But the number of people who were officially counted as unemployed—jobless workers who are actively looking for work—dropped by almost 500,000. And because the majority of those seemed to be workers who were on temporary layoff, there are a lot of people who just aren't rejoining the labor market.

Here's a metaphor that better explains what I mean. Imagine the labor market as a sporting event. The players on the field are employed workers. Players standing on the sidelines, holding their hands up and shouting "Put me in, coach!" are the unemployed workers actively looking for jobs. Then there are players—perhaps injured, catching their breath, or just content to sit things out—who are seated on the bench. Meanwhile, retirees and children watch from the stands.

Currently, the labor market has as many as 5.75 million more workers seated securely on the bench than were there prior to the pandemic. The workforce is still 3.5 million workers smaller than it was in February 2020, and another 2.25 million young people have come of working age over the last 15 months. But for some reason, the players on the bench seem to be mostly staying put instead of letting the coach know they're ready to play.

There are a number of good reasons why they might do so. They could be caring for family due to pandemic restrictions on in-person schooling, enjoying an early retirement, or waiting for the right job to open up. However, even the largest estimates of early retirees only account for 1.7 million people leaving the workforce, and recent research suggests that child care isn't restricting the return to work.

That seems to leave the federal expansion of unemployment insurance as a major driver of workers' decisions to remain on the sidelines.

This question is likely to be decided over the next two months. Twenty-four states have announced an early end to their participation in the federal expansion to unemployment insurance. If we see these states experience more employment growth than other states, we'll have a pretty clear idea of what the culprit was. Stay tuned.

NEXT: Randi Weingarten Is Very Disappointed That NYC Mayoral Candidate Kathryn Garcia Supports Charter Schools

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  1. Then we should stop paying them to sit around and do nothing

    1. Who’s we? You lost your say-so about spending when you spent your entire life forgetting your say-so about spending.

      1. Didn’t know you became the moderator here. Ban me then motherfucker leftie.

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        2. He’s a sockpuppet account for one of the regular lefty staff writers (one of many seen here), so in a way he kind of sort is the moderator.

      2. Yes. Keep defending the failed administration you preferred to the other cause of mean tweets.

      3. ^^ obviously hasn’t seen bidens budget or infrastructure plans. And by infrastructure I mean payoffs to unions, not roads bridges planes or trains.

    2. The COVID-19 (2021 novel coronavirus) pandemic has had a significant economic, social, emotional, and public health impact in the United States…………MORE DETAIL.

  2. The usual refrain is “Oh, but the jobs that are available don’t pay a living wage!”

    Everywhere I go there are help wanted signs. I just got an email from my bank saying they’re closing locations because they can’t hire enough people. Every restaurant and store has a help wanted sign. The concrete casting place is looking for laborers. The construction place wants drivers. Machinists wanted here, mechanics wanted there. Jobs are fucking everywhere.

    Maybe it’s an employer’s market and they’re waiting for the perfect applicant, or maybe they just aren’t getting applications. I dunno.

    Think I’ll ask next time I go into a place with one of those signs.

    Heck, I’d be thrilled to get a second job, but since I’m only available every other weekend I doubt they’d hire me. That and unless they pay me under the table I’ll be paying 45% in taxes which just isn’t worth it.

    1. And what’s wrong with two jobs? I had a full time job and a part time job most of my life. One of my favorites was working at a movie theater. The pay was crap but free movies was a cool benefit. Restaurants don’t pay great, but if you work it right you don’t have to spend much money on food. I don’t get it. Jobs are everywhere. If one doesn’t pay enough, get another. If you’re broke it’s not like you’re doing much with your free time. Get a job. Or two. Pick a place where you like the side benefits as number two. Fuck.

      1. Amazing that you write this after this was an obvious outcome last year. But no, you had to tilt at windmills and mean tweets. Lol.

        Just sad man.

        Glad to see you’re realizing how stupid choosing biden was. How stupid choosing the left is.

        Can you even blame the left or are you going to blame the citizens taking advantage of the largesse? My guess is you can’t and will do the latter.

        This is your preferred outcome last year. Wish you would admit you were wrong. But thats impossible for you.

        1. I replied below because unlike this post that contains 10 uses of the word “you” that one had none. It was mostly on the topic, not me.

          If you want to have an actual conversation about a topic, I’m totally game. If you want to talk about me, that’ll have to be between you and the girls.

          1. Lol. No you aren’t. Even last week you blamed the NCLB for current education issues despite common core largely replacing it in 2010.

            You still go into thread after thread with hyperbolic strawman trying to attack the right.

            Look I’m glad you finally realized what the hell is going on the last 4 months. Buy again I will say this is largely the script from Bidens campaign promises. You attacked abd called others trump cultists for saying as much. You deny these things but you did.

            You talk of honest conversation but you lost that moral standing over the last few years with your diatribes and trump cultist name-calling. Items you still deny doing.

            But if you are finally waking up to the issues of reality, I applaud that.

    2. Very true, yet a “journalist” on tv news was saying the reason crime is so high in Philly neighborhoods is that 50% of young black males are unemployed. Given the number of “help wanted” signs, most of these dudes are unemployed by choice.

      1. Why get a job when you can make fat stacks slinging drugs?

        1. Well at least you’re still racist.

          1. Could you explain the racist comment!
            Education time: to be a drug dealer you really don’t need to be any color. Drug addicts really don’t care if you are white, black or brown just as long as you have good shit. Drugs addicts would prefer their dealers spoke English but again they just want good drugs. Addicts will go to the dealer with the most overdoses because they have the good stuff.
            So now it looks like you are the racist thinking dealers are black. Nice

        2. slinging drugs

          Or looting stores.

          1. Not enough riots to make that a steady job.

      2. Not all people are qualified for all jobs. Some people are qualified for very few jobs.

  3. Employers don’t pay enough.
    Employers don’t pay enough.
    Employers don’t pay enough.
    Employers don’t pay enough.

    The Koch Bros. Times won’t be intellectually honest for five seconds and acknowledge the role Employer greed & their desires to keep labor costs way too low play in this, but if you scroll down you can read the truth.

    1. Also, collective bargaining barely exists anymore, of course workers would rather collect a check rather than exist at the whims of greedy shithead Job Creators who will exploit the shit out of them.

      You won! Neoliberals since the mid-80’s have written all US economic policy! Everything is fucking market-based now! you eliminated unions and Capital owners supremacy, then they accidentally forgot to set the rate at which unemployed people are given money to live at a non-poverty level during the once-in-a-century Pandemic and so workers are not idiots and won’t submit to exploitation if they don’t have to.

      1. * You gave Capital owners supremacy

      2. Something I always find amusing in these scenarios where corporations are fiefdoms and workers are serfs, is that those companies can’t exist without customers. If they all pay slave wages to build all this shit, but everyone is too poor to buy it, how do they make money? And it’s not like The Koch Bros have guys with guns who go around saying “Give me money or else! Do this or else! Do it my way or else!” No, that’s what government does. These evil corporations go around offering goods, services, and jobs to voluntary takers. Oh. My. God. Soooooooo evil!

        1. I believe about 30% of Koch Industries’ workers belong to a labor union. As to the current labor market, it will be interesting to see what happens in the states opting out of extended federal unemployment benefits. I suspect the labor shortage is, as the article suggests, a combination of people staying out of the job market, some challenged by school closures and child care, and some enjoying the extra unemployment benefits. Many employers have raised starting wages – and are still having trouble finding workers. The “living wage” argument isn’t as strong as it was – $15 an hour, or more, for a low-skilled job is more common today than before the pandemic.

      3. Not making enough money as an employee? Be an employer, then you will be rich!

      4. These communist class warfare conspiracy theories are so tedious. You’re just smearing people you don’t even know or understand as a class because you need an excuse to live at someone else’s expense. Any excuse would do.

    2. Take government largesse put of the equation. Do they pay enough then?

      1. That “government largesse” was supported by a majority of the voting population (Libertarians hate Democracy), who mostly don’t subscribe to your religion of Market Fetishization and simply seek some security + a minimum standard of living appropriate to a wealthy country such as ours.

        1. You can’t figure out a way to make money in this rich country?

        2. “simply seek some security + a minimum standard of living”

          Doubtful a majority of voters seek slavery, but maybe you’re right.

        3. Voting someone else’s wealth to be yours isn’t a moral accomplishment.

        4. “….. appropriate to a wealthy country such as ours.”

          But not appropriate to skill sets or value added to the business employing them.

          Fuck your collectivist bullshit.

    3. Employers don’t pay enough.

      Says who. You? You aren’t the boss of me fucko.

    4. Employers are now paying more than they did in 2019, yet the labor participation rate is several percent lower. What changed where wages that drew people into the workforce are no longer sufficient?

    5. Businesses are so greedy that they’d rather make less money and go out of business than pay higher wages.

      It isn’t that their businesses can’t sustain higher wages, like, as if people weren’t willing to pay more as customers. They’re all just conspiring to keep wages down, even if it means closing their businesses.

      I know all of this from my mind-reading, which is how fact-based people navigate the world.

    6. Depending on your area employers are paying up to 16 dollars to start. McDonald’s are starting people at 15.50 an hour in my area but people are not looking for a job because they get paid more on unemployment. Now you can work and still collect unemployment.
      Why go to McDonald’s and sling Fry’s for 15 an hour when you can sit home and play your video games for 500.00 a week????

  4. Reason in 3 months:

    “The libertarian case for vagrancy laws”

    Next year they may even come around to “the libertarian case for convict leasing”.

  5. Well if there are people sitting at home collecting benefits on the dole maybe good for them, but ultimately if they decide to get out of the house and look for a job, putting “sat on ass” on a resume doesn’t look so good.

    I suspect though that this was always stealth UBI and feds/states will be looking to keep that going. So we’ll end up with a fucked up workforce of lazy ass shitheads high on dope and fat on twinkies (hi jeff) while the rest of us have to take up the slack again.

    1. I’d wager that most of the people who sat on their collective asses don’t have a resume. They’re filling out applications.

      1. Ahh yes. Thats why we are down 6 million jobs from pre pandemic levels. It was people who have never worked not those who were paid 15 an hour to not have a job.

        1. I was responding to “putting “sat on ass” on a resume doesn’t look so good.”

          In general $15/hr jobs are more likely to be application jobs, not resume jobs, and application jobs tend to be more forgiving of employment gaps than resume jobs. I know there are exceptions. There are always exceptions. But as a general statement I think my 6:10 comment stands.

          1. It doesn’t stand as a large percentage of those people do have a resume woth a gap on it, they don’t lack a resume. Again, still down 6 million employed people from the jan 2019 numbers. There are a large percentage of people who have not gone back to work because they make more to do nothing. An action encouraged by the left still.

            As you note below it is the red states ending this policy at their own level. The sad part is their taxes are still paying the blue costal enclaves who remain at high unemployment.

            Take this as a lesson. Both sides are not equally bad. Pointing that out doesn’t make one a cultist like you claimed for over a year, even attacking Ken for the same view.

    1. and to beat Sarcasmic to the punch lol I consider (R) a fully-owned subsidiary of (D). same team.

      1. In this case I’ll give team R governors credit for ending extended benefits early.

        1. Its amazing. After 3 years of histrionic hyperbole to find a way to blame conservatives he finally says something not blindly partisan.

          As recently as last week you blamed the gop for public schools. Did you sober up?

  6. It occurred to me that the way Biden is lavishing money on us, his people, is probably a good explanation for why his son is such an entitled spoiled irresponsible brat.

  7. Bidens administration has gone from defending and asking for more enhanced UI to emphasizing the welfare as temporary.

    https://mobile.twitter.com/JStein_WaPo/status/1400873261668438018?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1400873261668438018%7Ctwgr%5E%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Ftwitchy.com%2Fgregp-3534%2F2021%2F06%2F04%2Fpurely-coincidental-biden-admin-changes-its-tune-after-lackluster-jobs-report%2F

    Numbers are that terrible. Worker participation actually decreased last month. More than 4 million jobs continue to remain unfilled.

    The administration still refuses to blame UI even though they are emphasizing its temporary nature.

  8. Don’t worry. Biden has done what his billionaire base demanded by opening our borders, inviting immigrants — including unaccompanied minors — from all over the planet to move here. It might take them a while to get settled, but eventually they’ll provide the cost-effective labor that Reason.com’s benefactor Charles Koch craves.

    #OpenBordersWillFixEverything

    1. About 30% of Koch Industries’ workers belong to unions. Think Charles Koch will drive that down to zero before he dies?

  9. Under 2-years ago…
    The news was; Unemployment is the lowest it’s ever been since 1960s. De-Regulation and Tax-Cuts are to blame?

    No one knows how to F-Up the economy like the Democratic Party.
    No one knows how to destroy a nation like National Socialists do.

    Please keep Nazism out of the USA. This country has something extremely special to offer (Individual Freedom). It doesn’t need to be just another sh*thole Venezuela, Soviet Union or Mexico.

  10. It is obvious that paying people not to work will lead to more people not working. Blindingly obvious. So obvious only the very stupid or the very dishonest cannot acknowledge it.

    Some states such as AZ are trying to swing things the other way, by offering a bonus to anyone who gets and keeps a job (6 months for example) instead of boosting unemployment. Unfortunately this same program is only offered to people who already took unemployment, so if you weren’t a shameless fucking looter, TOO BAD.

  11. In Europe many fast food restaurants have 2-4 kiosks for ordering food and only one person taking orders. The reality is eventually businesses are going to just stop hiring and replace employees with automation. When that happens those jobs will be gone forever.

    1. Do you lament jobs lost to automation on automobile assembly lines? There might be something romantic about humans screwing bolts or flipping burgers, but if you can teach a machine to do it it will always be done exactly the same time every time.

      I personally look forward to a fully automated McDonalds. Maybe then they’ll use that salt and pepper shaker next to the grill.

      1. but if you can teach a machine to do it it will always be done exactly the same time every time.

        I’ll be pedantic here because it is you. This statement is false. Machined output is produced based on acceptable tolerance levels. Every ball bearing has a slight deviation from the planned outcome of machining. There is also an acceptable failure rate to any given batch of machined outputs that is determined by a company. Everyone has had a failed screw that simply snapped when too much torque is applied.

        Machines are good, they are not exact.

        1. Humans don’t make decisions. They rationalize what their brains already decided to do before they were aware.

          1. Are you projecting AGAIN Tony?? 🙂

  12. About 1 in 4 are sitting out because of higher unemployment payments. So 3 in 4 are doing so for other reasons. A lot of tipped workers did not qualify for unemployment or for a very low payment so they found jobs outside of restaurants. People with school age children don’t have their usual child care and can’t return if they want to.

  13. Not shocking when you consider the $300/wk bolus is greater than a full time minimum wage job. Who’s going to work when the national nanny pays more?

  14. Thank you for sending me the information about it I learned a lot from it ! I appreciate the detail you went into it I am grateful for the amount of time and effort you put into this helping us. Your insights and summary are beneficial.

  15. In fact, it’s not all that bad. Gradually, everyone goes back to their jobs. The covid situation has really changed the world. A lot of other kinds of work came up. Every day there is more and more work for programmers and designers. You don’t have to come to the office to work on the Internet.

    While there was a covid pandemic people got new professions and won’t go back to their old jobs in offices. That’s something to keep in mind when reporting, too.

    The world economy is changing. Even I was able to employ 3 people from different countries on my blog. Jobs are becoming global and we need to take that into account and use new methods to count working people.

  16. Radical individualist for imposing a Puritan work ethic on hundreds of millions of people.

    The Puritan work ethic was like 90% about keeping you too busy to masturbate. Do you realize that?

    1. Or maybe it was to produce enough to keep food in your mouth and a roof over your head without going around with Gov-Guns trying to steal it from others who had enough “work ethic” to produce it.

    2. Fewer workers means smaller economy means less goods and services to go around.

      Society is worse off to the extent people follow incentives to consume resources without producing anything.

      Those incentives are economic inefficiencies caused by bad policy.

      1. Most societies around the world manage to feed themselves.

        Even the ones that place value on relaxation and holidays.

        We have a specific culture, and being inside it you are likely to miss some of its oddities.

        The work ethic is about policing your dick. That’s all it was ever about.

  17. Don’t worry — Biden’s IRS is hiring.

    Wasn’t this one of the actual complaints against King George in the Declaration of Independence?

    “He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.”

  18. Yaa it very harsh time to get work but you can start your own business by creating orstart a blog.

  19. Don’t overlook the scenario where there is an open job, and a willing applicant, but the company requires use of an experimental vaccine approved only for “emergency use”. If the applicant is a fertile female, there are no conclusive studies of the side effects on a current or future pregnancy. I have yet to see a company that requires vaccination that also has an exception for people with immunity from recovering from an infection. There are no studies of the vaccine when given to someone who has recovered from an infection.

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