Policy Spotlight: Unemployment Insurance Is Not Causing U.S. Labor Shortage
The false narrative that increased unemployment insurance (UI) benefits included in the American Rescue Plan are causing a labor shortage in the U.S. took another hit with the results of a new poll from Morning Consult. The poll found that unemployment benefits directly contributed to only 13% of UI recipients rejecting a job offer during the pandemic.
Unfortunately for the millions of low-wage workers — especially workers of color who are bearing the brunt of jobs and lives lost during the pandemic, and who are relying on UI to support themselves and their families — the policy implications of this false narrative are very real.
26 governors terminated early the increased unemployment benefits, reducing UI payments by $300 per week, excluding independent contractors and gig workers, and shortening the payments period by anywhere from five weeks to three months, depending on the state.
The top reason actually cited for turning down an offer to return to work during the pandemic while receiving UI: childcare obligations.
Morning Consult’s conclusion? “These survey results strongly reject the narrative that all UI recipients are doing better financially than they were prior to the pandemic.”
It is not UI that is holding back workers, it is often the high cost of child care and lack of paid leave. Considering “only one type of worker — higher-income, full-time employees receiving workplace benefits — stands a reasonable shot at financial security” in the U.S. today, policymakers, employers, and other stakeholders will be wise to remember that the problem is not a labor shortage caused by “overly generous” UI. The problem is a shortage of quality jobs with benefits that offer most workers a path to financial health.
