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Job Searches Rose in States That Opted Out of Federal Enhanced Unemployment Benefits

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Economists expected the U.S. economy would add one million jobs last month, bringing the unemployment rate down to 5.8%, Instead, the economy added only 266,000 jobs, the unemployment rate inched up slightly to 6.1%.

While the leisure and hospitality industry added 331k jobs in April, the industry was still 2.9 million workers short of where it was before the pandemic. Restaurants have also been struggling to find workers, with some fast food establishments raising wages and resorting to offering signing bonuses to deal with the shortage. A study from the National Bureau of Economic Research last year found that 68% of those on unemployment at the time with the federal supplement made more than they did on the job, and these are the sorts of establishments employing workers that disproportionately fall in that category.

In response to a labor shortage that enhanced federal unemployment benefits has fueled, 24 Republican-led states have decided to do away with the weekly $300 boost. The benefits are set to expire naturally on September 6th, but these states will be ending them in mid-June, and 3.8 million will be impacted.

New research shows job searches did see an immediate bump right after the aforementioned states announced they would be nixing enhanced benefits. According to the Washington Examiner:

Jed Kolko, the chief economist for the employment website Indeed, found that job search activity rose, relative to the national trend, in the roughly two dozen states that have announced they are ending the expanded unemployment benefits program early, a sign that cessation of the program might begin to mend what many economists are characterizing as a labor shortage.

“A state’s share of national clicks on job postings was nearly 5% higher on announcement day, relative to a baseline of the last two weeks of April,” according to Kolko’s findings. “This increase was temporary, vanishing by the eighth day after the announcement. In the second week after the announcement, the state’s share of national clicks was no higher than it was during the late-April baseline.”

Indeed found that search activity grew in the days after states made the announcement about ending the programs and increased across several sectors. A state’s share of national clicks, on average, was up between 3% and 4% from the day of the announcement to three days later. Tourism, hospitality, sales, and marketing saw the greatest increases, although search activity also rose among career paths not typically associated with lower wages, such as banking, finance, and the medical field.

There are a number of reasons for why the bump hasn’t lasted longer. For one, it’s not difficult to immediate find work in an industry suffering a labor shortage, so those who initially looked may have found employment quickly, giving them no reason to continue searching. Also owed to labor shortages, some could be putting off looking for work closer to the enhanced benefit expiration in two weeks knowingly they won’t encounter much difficulty finding a job then.

While we won’t have the data for over another month, it’ll be interesting to see just how quickly those 3.8 million affected find work.. Common sense suggests we’ll see a drastic drop in unemployment in these 24 states relative to the rest of the nation.

Matt Palumbo is the author of Dumb and Dumber: How Cuomo and de Blasio Ruined New YorkDebunk This: Shattering Liberal Lies, and Spygate

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