Biden Denies Enhanced Unemployment Benefits Spurred Weak April Jobs Report

Biden Denies Enhanced Unemployment Benefits Spurred Weak April Jobs Report

Mona Salama
Mona Salama
May 7, 2021

President Biden rejected the idea that the disappointing U.S. April jobs report directly resulted from the federal unemployment benefit his $1.9 trillion COVID relief package extended, insisting that his massive tax-and-spending packages are needed now more than ever.

“You might think we should be disappointed,” Biden said regarding the April Jobs numbers in an event the White House schedule as they were overconfident on the expected jobs numbers. “But when we pass the American rescue plan. I want to remind you what it was designed to help us over the course of a year — not 60 days.”

“We never thought that after the first 50 or 60 days, everything would be fine. Today there’s more evidence; our economy is moving in the right direction. But it’s clear we have a long way to go,” Biden added.

The April jobs report released Friday morning hours before Biden spoke showed that the U.S economy added just 266,000 jobs — way below Wall Street economists’ expectations of the one million figure they had predicted with the unemployment rate rose slightly from 6 percent to now 6.1 percent.

Economists surveyed by Dow Jones and Refinitiv expected the U.S economy to add 978,000 jobs and for the unemployment rate to show at 5.8 percent for the month of April. The lackluster report shows that the extended pandemic government unemployment benefits were a key factor holding those back from actively seeking jobs.

The leisure and hospitality industry, among the hardest hit by the pandemic, saw the biggest hiring gains in April, by far, adding 331,000 workers, according to the Bureau of Labor data released early Friday morning. Professional business services like lawyers and accountants lost over 111,000 in temporary help jobs, the data showed. Transportation and warehouse jobs fell by about 74,000, while the manufacturing sector lost about 18,000 jobs.

However, Biden is downplaying the jobs figures and claiming that the report actually shows that the slowdown is proof his $4 trillion “infrastructure” and “families” proposals prove that “more help is needed.”

“Some critics said that we didn’t need the American Rescue Plan that this economy would just heal itself. Today’s report just underscores my view, how vital the actions we’re taking our checks to people who are hurting, support for small businesses for childcare, and school reopening support to help families put food on the table. Our efforts are starting to work,” Biden said.

“Help us here, and more help is on the way, and more help is needed. Second, today’s report is a rebuttal for loose talks that Americans just don’t want to work,” Biden continued. “I know some employers are having trouble filling jobs. But what this report shows is that there’s a much bigger problem — notwithstanding the commentary you might have heard this morning. It is that our economy still has 8 million fewer jobs than when this pandemic started. The data shows that more workers — more workers — are looking for jobs, and many can’t find them.”

The president added, “We’ve got too much work to do. And the American rescue plan is just that a rescue plan is to get us back to where we were. But that’s not nearly enough. We have to build back better. That’s why we need the American jobs plan I proposed.”

When asked an impromptu question by a reporter if he “believed enhanced unemployment benefits had any effect on diminishing a return to work in some categories,” Biden replied, “No, nothing measurable.”

Following Biden’s remarks in the White House press briefing, Treasury Secretary Janet Yellen said that she doesn’t think the unemployment enhanced benefit played a “major factor” in the weak labor force, arguing that there’s no data correlates that shows low-wage workers are associated from states that have generous base unemployment benefits.

“There’s no question that we’re hearing from businesses that they are having difficulty hiring workers,” Yellen said.

“If it were really the extra benefits that were holding back hiring, you’d expect to see that in either in the states, or in workers, or in sectors where the replacement rate to the UI is very high, you’d expect to see lower job-finding rates, and in fact what you see is the exact opposite,” she added.

However, the U.S. Chamber of Commerce is saying otherwise and calling on the Biden administration to end the $300 weekly federal supplemental unemployment benefit, arguing the government stimulus contributed to the tepid job growth.

“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” Chamber’s chief policy officer Neil Bradley said in a statement. “Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working. One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit.”

A recent study from the University of Chicago found that 42 percent of people claiming unemployment insurance earn more through government subsidy checks than they did working from their prior jobs. The Chamber of Commerce also found from their own analysis that over 25 percent of people collect more sitting home than working.

Democrats also echoed Biden’s remarks in calling for more government spending. House Speaker Nancy Pelosi (D-CA) urged Congress to pass Biden’s $4 trillion social welfare tax-and-spending plan.

“The disappointing April jobs report highlights the urgent need to pass President Biden’s American Jobs and Families Plans,” Pelosi said in a statement after the report was released. “We need to take bold action to Build Back Better from this crisis by investing in our nation, our workers, and our families.”

“As we see continued evidence that women and working parents have been hit hardest in the economy, we must invest in human infrastructure with the American Families Plan which strengthens the child care and early education support that families need: children learning, parents earning,” Pelosi added.

Meanwhile, Republicans blamed Biden for the “horrendous” April’s jobs report, as many cited that it was not surprising how the unemployment rate ticked up caused by Democrats’ push to extend the enhanced federal benefits through Sept. 6. As states move to reopen the economy and business fully, many small business owners have complained that it’s hard to get former workers to return or find new workers due to many benefiting from collecting unemployment benefits by staying home.

Why is anyone surprised that the jobs reports fell short of expectations?” Sen. Marco Rubio (R-FL) tweeted, quote tweeting an old tweet from April 22 of the difficulty for Florida small business owners to find potential workers. “I told you weeks ago that in #Florida I hear from #smallbusiness every day that they can’t hire people because the government is paying them to not go back to work.”

Mona Salama

Mona Salama

Subscribe to the newsletter everyone in Florida is reading.