Biden: Unemployment benefits are not causing a labor shortage. Also, if you don’t take a job offer, you’ll lose your benefits

News & Politics

President Joe Biden denied Monday that the generous federal unemployment benefits were a contributing factor to Friday’s disappointing jobs report while at the same time clarifying that anyone who has been offered a “suitable job” must take the job or lose their benefits.

The president delivered remarks on the economy Monday at the White House after a Friday jobs report stunned economists who had predicted the U.S. economy would add nearly 1 million jobs in April, only to find out only 266,000 jobs were created and the unemployment rate actually rose from 6% to 6.1%.

“Let’s be clear, our economic plan is working,” Biden insisted, noting that since he took office in January more than 1.5 million jobs have been created in the U.S. as the country reopens from COVID-19 lockdown policies and business restrictions. “I never said and no serious analysis ever suggested that climbing out of the deep deep hole that our economy was in would be simple, easy, immediate or perfectly studied.”

Republicans and the U.S. Chamber of Commerce blamed the lackluster jobs numbers on the $300-per-week unemployment insurance benefits generously offered in the $1.9 trillion coronavirus relief package that passed in March. The benefits, which critics say pay unemployed people more than they would earn if they found a job, were extended through September under the Biden plan.

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Biden explained Monday that anyone currently collecting unemployment insurance is liable to lose their benefits if they are offered a job but refuse to take it.

“Anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment benefits,” Biden said, adding that there are some COVID-19-related “exceptions.”

Responding to his critics, Biden said “we don’t see much evidence” of people being paid to stay home rather than go to work.

“It’s easy to say, the line has been, because of the generous unemployment benefits that is a major factor in labor shortages. Americans want to work,” Biden said. “I think the people who claim Americans won’t work even if they find a good and fair opportunity underestimate the American people.”

The president announced several actions his administration will take to distribute economic aid from his coronavirus relief package and hopefully spur job growth.

The U.S. Treasury Department will begin to send state and local governments more than $350 billion in bailout funds to cover their budget deficits and rehire about 1.8 million government employees who were laid off during the pandemic, including teachers, first responders, sanitation workers, and other essential workers. The administration is also beginning to send relief checks to some 16,000 restaurants who applied for assistance.

Biden encouraged employers to take advantage of programs offered in his American Rescue Plan, like the ability to hire back laid-off workers part-time without having those workers lose their unemployment benefits or a tax credit for keeping workers on payrolls.

Republicans say the administration needs to do more to make unemployment benefits less attractive than finding and maintaining a paying job. Sen. Ben Sasse (R-Neb.) announced legislation to convert unemployment benefits into a federal hiring bonus that will supplement qualifying workers’ paychecks if they find a job by July 4, 2021.

State officials are also taking action. Last week, the governors of South Carolina and Montana announced that enhanced federal unemployment benefits would end for residents in their state, claiming the benefits are discouraging people from finding work and causing labor shortages. Florida Gov. Ron DeSantis (R) announced separately that his state will require residents to show proof they are looking for work to continue to receive unemployment insurance.

The Biden administration claims that there is no evidence to support the idea federal benefits are causing the labor shortage. Secretary of Commerce Gina Raimondo said Sunday that many Americans aren’t returning to work yet because of ongoing fears about contracting COVID-19 and difficulty in finding childcare while schools remain closed for in-person instruction. President Biden has proposed a $1.8 trillion plan that would in-part subsidize child care for American families and federally fund free pre-school tuition for 3- and 4-year-olds.

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