After several months of better-than-expected jobs growth, the April report from the Labor Department was surprising — just not in a good way.
With economists predicting the addition of about 1 million jobs in April and the overall unemployment rate to clock in somewhere around 5.8 percent, expectations were way off — and not in the right direction. According to the report, employers only added about 266,000 jobs and unemployment actually increased to 6.1 percent, marking a disappointing report that halts consecutive months of solid growth.
What’s surprising about these underwhelming numbers is that they come as many employers state they are unable to find qualified workers to fill open positions. So what’s the reasoning behind the poor April jobs report? Let’s take a closer look:
Jobless Benefits are Too Generous
Many in political circles are blaming the enhanced unemployment benefits secured by the American Rescue Plan as a reason why employers cannot fill positions. In other words, many Americans are likely earning more to stay home than they would if they entered the workforce. There’s certainly another side to this argument as progressives argue that employers need to pay more of a living wage. The bottom line is that the extra $300 per week of enhanced unemployment benefits is in effect until September, though many states have vowed to add a stipulation that in order for Americans to continue to receive it, they need to be able to prove they’re searching for work. The U.S. Chamber of Commerce has even gone so far as to advocate repealing these enhanced benefits. Some states are trying to find ways to incentivize Americans to rejoin the workforce.
Child Care is a Major Issue
As most American children are still out of full-time school and child care facilities remain closed or only partially open, there’s often a need for at least one parent to stay at home and care for any children in a household. We covered how much the pandemic has hurt working women in a previous post, and you can see why — child care disproportionately falls on the shoulders of the women. President Biden has called for more child care support as part of his family support plan as a means of getting women back to work while securing adequate child care options, but that appears to be an uphill battle.
The Pandemic is Still Taking its Toll
It’s worth noting that the March jobs report was corrected so that nearly 200,000 fewer jobs were actually created. And while that jobs report was still strong, it’s not as strong as it was originally believed. The fact is that the pandemic is not over yet, and there’s still likely to be ebbs and flows as we look to move beyond it. Many people are still nervous about returning to the workforce and are likely waiting until vaccination rates are more comprehensive in their regions or until they’re fully inoculated.
