Job searches jumped 5% in states cutting unemployment benefits: Indeed

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The risk of losing unemployment benefits in two dozen states had a modest but short-lived impact on job searches, according to an analysis published Thursday by Indeed.

At least 24 states have announced their early withdrawals from the pandemic’s unemployment programs since early May.

Officials in the states, all led by Republican governors, claim that improved services keep people from looking for work. Some pay one-time bonuses of up to $ 2,000 to people who find and keep a job.

Job searches rose 5% on the day each state announced its intention to withdraw from federal programs. (The increase is an average compared to the national trend.)

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That slight increase, however, quickly subsided – it disappeared eight days after each state announced it.

“For me that [initial] The effect looks modest, “said Jed Kolko, chief economist at Indeed Hiring Lab and author of the report.” And in particular, it is only temporary. “

The rapid decline was likely due to declining interest after the initial announcement, rather than people finding a job and therefore stopping looking for work, Kolko said.

“We do not yet know how this could possibly affect the volume of hires or wages,” he added. “This is really a first indicator of the effects of an early cut in federal benefits.”

The report does not include data on Florida and Nebraska, the most recent states to announce their withdrawal.

The 24 states cut federal unemployment benefits as early as June 12. The American rescue plan offers them until September 6th.

All workers in these states will cut their aid by $ 300 per week. The self-employed and the long-term unemployed will lose their benefits entirely in most countries.

The move affects around 3.5 million people, according to Daniel Zhao, a senior economist at Glassdoor.

According to the Ministry of Labor, this is more than 1 in 5 people who receive unemployment benefits.

According to economists, it is impossible to quantify the extent to which increased unemployment benefits play a role in a regional labor shortage.

However, many do not believe that federal benefits play a large or primary role in business recruitment.

Covid-related health risks are likely a bigger barrier to re-entering the workforce, especially personal work, they said. Less than half of working-age Americans are fully vaccinated.

In addition, there are burdens on care while schools and daycare centers are not fully reopening. Many older workers also chose to take early retirement, which reduced the labor supply.

In addition, as of April, around 21% of the unemployed were temporarily laid off (ie on leave), according to the Bureau of Labor Statistics. This proportion is higher than the typical values ​​before the pandemic of 10 to 15%, said Kolko.

As these workers expect to be recalled to their previous jobs, they are less likely to look for work, he said.

According to a survey by Quinnipiac University, more than half (54%) of Americans believe the state governors are doing the right thing by ending federal unemployment programs early.

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