6 Minutes to Read (Reuters) – WASHINGTON (Reuters) – According to new federal data, states that stopped receiving federal unemployment benefits early this spring have reached a critical juncture in their economic recovery, with the number of potential jobs outnumbering the number of unemployed people. A Cracker Barrel restaurant in Tampa, Florida, displays a “Now Hiring” sign on June 1, 2021. Octavio Jones/REUTERS The ratio of job opportunities to unemployed rose to 1.01 in March in the 26 states that are ending a $300 federal jobless benefit before its worldwide expiration in September, according to the data, which estimates job openings and turnover at the state level. In the remaining 24 states and the District of Columbia, the ratio was 0.74, indicating that there were still more unemployed persons than available employment in those areas. The new figures, which the US Bureau of Labor Statistics is currently publishing on a quarterly basis as an experimental series, add texture to the uneven nature of the US labor market recovery and the raging political debate over the need for continued safety-net measures for those out of work as the coronavirus pandemic fades across the country. While hiring was tough across the country, according to Matt Luzzetti, chief U.S. economist for Deutsche Bank, it had hit a particularly stall this spring among the states that eventually voted to stop the federal supplement. “They’ve had more trouble converting job vacancies to hires in those set of states,” Luzzetti said, cautioning that the data did not enable judgments about the impact of decreased unemployment benefits on the job market. The data is based on the agency’s Job Openings and Labor Turnover Survey (JOLTS), which generates state-level estimates of available jobs. It also gives state-by-state volumes of hires, layoffs, and employee “quits,” which economists use to understand how labor markets work at a level deeper than headline unemployment rates. State labor marketplaces as of March 2021 – graph More recent data are unavailable, and the JOLTS estimates at the state level do not address the core policy question of whether early termination of unemployment benefits will effect hiring and job creation by encouraging persons who are already receiving benefits to work. State-level employment numbers for June, when the first of the states ceased federal payments, may provide some insight later this month. ‘EMERGENCY MISMATCH’ is a term used to describe a situation in which there is So far, data and polls indicate that measures that have taken on a partisan tint have had only a minor influence, with practically all Republican governors in the country terminating benefits early and only Louisiana, among Democratic-led states, following them. Early in June, benefits began to run out, with states generally declaring their plans in May. Continuing claims for state unemployment benefits have declined higher in states that have already terminated or intend to halt benefits early than in other states since then. That does not imply that individuals who were unemployed found work. According to a recent online study conducted by the job site Indeed, government benefits scored behind spouse income, lingering fears of the coronavirus, family duties, and even the desire for time off in affecting individual decisions about whether or not to work. Critics contend that terminating the benefits now puts workers at risk at a time when the pandemic is still in its early stages. Meanwhile, economists have been analyzing the data in what has turned into an unemployment policy experiment at a time when the US economy appears nearly bewildered – with record job openings, relatively high unemployment, and slower-than-expected hiring. “All the signals point to those benefits being phased out having some beneficial effects on labor supply, but they aren’t going to be significant,” said Nick Bunker, the Indeed Hiring Lab’s economic research director for North America. “An urgency mismatch” was discovered in a 5,000-person online poll conducted from May 26 to June 3, according to Bunker. “Employers want to get up and running immediately. However, a significant number of job seekers are more patient and want to take their time.” Nonetheless, the new data suggests that labor markets in states that cut benefits early tightened faster than in other states, highlighting the worries of authorities such as Montana’s Republican Governor Greg Gianforte, who declared on May 4 that he would reduce the federal unemployment benefit early. Graphic depicting the number of job searchers per job position – “Too many firms in our state have told me that they are unable to locate staff. Almost every sector of our economy is experiencing a worker shortage “In a statement outlining his plan to slash benefits in June, Gianforte noted. According to the Bureau of Labor Statistics, Montana had 1.75 job vacancies for every unemployed person as of March, the seventh-highest ratio in the country. At the time, the national United States figure was around 0.84, which was half of Montana’s but an improvement over previous months. Policymakers such as St. Louis Federal Reserve President James Bullard saw the fact that national job opportunities were approaching the level of the unemployed as an indication that labor markets might be closer to complete recovery than previously thought. The statistics, which the BLS will begin publishing monthly in October, revealed wide regional differences as well as the potential for spatial mismatches between labor demand and supply to hinder hiring at the national level. Both sides may have a point in a highly political policy debate: As of March, there were more job openings than job searchers in 21 of the 26 states that stopped benefits early, while there were still more unemployed than available jobs in 16 of the other 24 states. On both sides, there are outliers. Vermont, for example, is not cutting benefits, but it did have the greatest ratio of job vacancies to unemployed persons in March, with 2.07 openings for every job applicant. Three of the states that stopped benefits early, Texas, Arizona, and Louisiana, had much more unemployed persons than job vacancies. Howard Schneider contributed reporting, while Dan Burns and Paul Simao edited the piece./n
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