The Big Jobs Miss

National Review Online

Saturday, 08, 2021

 

After the April jobs numbers missed expectations by a staggering 800,000, Democrats predictably used the opportunity to argue that it only showed that they had to press ahead with their economic agenda.

 

“Some critics said we didn’t need the American Rescue Plan, that this economy would just heal itself,” Biden said of the $1.9 trillion spending spree he already signed. “Today’s report just underscores, in my view, how vital the actions we are taking are. Our efforts are starting to work, but the climb is steep, and we have a long way to go.”

 

House Speaker Nancy Pelosi declared, “The disappointing April jobs report highlights the urgent need to pass President Biden’s American Jobs and Families Plans,” referring to the additional $4 trillion of spending bills now being proposed.

 

Yet the actual data suggest the opposite — that Democratic policies are actually holding back the job market.

 

The disappointing report, which showed the economy gaining 226,000 jobs instead of the more than 1 million expected, added to the evidence that enhanced unemployment benefits have created a powerful disincentive for many people to return to work.

 

Last year, there was some evidence to suggest that $600 bonus payments were creating a barrier to job growth. For instance, job applications fell once the policy was implemented, and when the bonus ended last August, more people rejoined the labor force. But last year’s bonus payments came at a different phase in the pandemic, with cases spiking and no vaccine. Many businesses were not hiring because of the government-imposed lockdowns, and there was at least an argument that it made sense to pay people to stay home to reduce the spread of the coronavirus.

 

With wider vaccination and more businesses reopening, we are in a much different place today. We should very much want people to return to work, and remove measures that were only justified in the belly of a once-in-a-century pandemic. Yet in March, Biden signed a COVID-relief bill that extended the policy of giving unemployed workers $300-per-week bonuses on top of normal unemployment benefits into September. For many workers, this has made it more profitable to stay home than to work.

 

A report from the National Federation of Independent Businesses found that a record 42 percent of business owners had job openings that could not be filled. The Bureau of Labor Statistics recorded 7.4 million job openings at the end of February. And data in its Friday jobs report showed a noticeable spike in hours worked, which also suggests that currently employed workers have had to take on more hours because it’s been hard to hire.

 

Even former Obama administration economic adviser Jason Furman, now at Harvard, told CNBC, “If you look at April, it appears that there were about 1.1 unemployed workers for every job opening. So there are a lot of jobs out there.”

 

We are heartened that Montana and South Carolina have announced plans to cut off the enhanced unemployment benefits, and hope that other states follow. But as long as Biden’s federal policy remains on the books, it will hold back the labor market.

 

One other argument that people have made about the bad jobs numbers is that the closures of schools and child-care centers are squeezing working parents. But this problem is a direct result of the lockdown policies that Biden and his fellow Democrats are promoting well past their reasonable expiration dates. Biden’s CDC has even allowed teachers’ unions to manipulate guidance on school reopenings to make it harder to bring children back for full-time and in-person instruction.

 

The disappointing jobs numbers are not an argument for more government largesse. Rather, governing as though we were in a perpetual emergency risks becoming a self-fulfilling prophecy.