Today’s entry: I’ve heard you discuss the negative consequences of extended and supplemental unemployment benefits. Thank you, my business is among the impacted. My question is if we know how many people would likely go back to work if it weren’t for the extended unemployment benefits?
Bottom Line: There’s no way to give you a hard number but I can give you a pretty good idea. According to the last month’s job report from the Bureau of Labor Statistics, there are 9,812,000 people collecting unemployment. Incidentally, despite record job openings being posted and increased job openings due to pandemic restrictions being rolled back in various states, there are 102,000 more people collecting unemployment today than a month ago. The bottom line is that it’s a fact that many have opted to collect unemployment with federal supplemental assistance as opposed to going back to work. This isn’t a surprise, as this phenomenon has played out regarding welfare benefits previously. In terms of figuring out how many of the near ten million people on unemployment are collecting by choice, I’m going to use opening data.
According to the Department of Labor’s JOLTs report, there are currently 8.12 million job openings. In the past month alone, there were 2 million more new job postings than hiring's which took place. It’s remarkable that there are 102,000 more people collecting unemployment today compared to a month ago while there are 2 million more jobs available today compared to a month ago. But that’s what incentivizing complacency will do to a society.
In February of 2020, the US unemployment rate was 3.5% with 5.8 million people collecting unemployment. The February 2020 JOLTs report showed 6.9 million job openings. So, there was a difference of 1.1 million between job openings and those collecting unemployment. Today, that total is 1.692 million. This implies that at a minimum there are 592,000 Americans choosing to collect unemployment rather than work.
The high end would be the difference between the two job openings reports 1.22 million people or 12.4%. So, while I can’t provide a precise number, it can be evidenced that between 6% to 12% of those unemployed right now having chosen to remain unemployed. In Florida, there are 474,626 people collecting unemployment. Precisely why Governor DeSantis refused to increase unemployment benefits in the state session.
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