In a report by CNBC, the numbers on the jobs report for September are not looking good and demonstrate the Biden administrations failure to meet expectations. The report showed non-farm jobs rose by 194,000 which is much less than the expected 500,000.
While the unemployment rate fell by 4.8%, the overall unemployment rate is still high after a dismal growth rate in August. The number of people in the work force fell by 183,000. Stephanie Pomboy, the founder of the economic research firm, Macro Mavens stated, “That’s an amazing number and it’s not a good one.” This number is actually the lowest it has been this year. While there was a slight increase in the hospitality industry, a great portion of those numbers represented a drop in government jobs. There was also a decline in nursing jobs. 5 million people reported in September that the pandemic was responsible for loss of jobs and/or loss of hours.
A Significant Improvement Is Far From the Reality of the Jobs Situation
In a report by Bloomberg news, President Biden made remarks calling the numbers on the jobs report a significant improvement since he took office and boasted that the unemployment rate dropped 4.8 percent. This decrease was due to many women leaving the workforce due to the pandemic and are no longer looking for jobs. The report triggered several responses. House Speaker, Nancy Pelosi said the report showed a need for sweeping social spending package that Democrats are working on. Republican sentiment is that more federal involvement will hamper the recovery of the workforce. Many have raised questions about Biden’s vaccine mandates being responsible for some of the loss in the workforce.
Dis-Incentives to Work
Also under scrutiny was the decision to extend unemployment payments. Many workers are receiving the same amount or more from unemployment benefits than they were making at their jobs, so as a result many have not returned to work. It gives more of an incentive not to return to work which is detrimental to the economy and is reflected in the job report. Recently Biden announced that the unemployment benefits will soon come to an end. This has caused alarm among some of the Biden administration officials who believe this will be disastrous to millions of people still out of work. This is in conflict with the official position of the administration and Biden personally as a statement released earlier had stated that it was an appropriate time for the emergency federal program to end. The benefits are usually paid by the state, but the federal government stepped in with additional benefits due to so many people being out of work due to the pandemic. The benefits had previously lapsed for a time only to be restarted later due to economic hardship.
The Government Response to the Pandemic Has Created Deep Economic Problems
The pandemic has had disastrous effects on the economy and employment rates. Stay at home orders from state and local governments forced many businesses to close or operate at a reduced capacity putting many people out of work. The hospitality and retail industries were hit the hardest since they had to limit the number of customers in their establishments once they were allowed to reopen. Many office jobs turned into teleworking positions from home, but a 2020 University of Chicago study showed that only 34% of those positions were able to be performed at home and many businesses that originally were temporary closures ended up as permanent closures. Teleworking, tele-visits for doctors and purchasing items online are on the rise as are delivery services.
The Infrastructure Plan Is Misguided
Biden’s 2 trillion-dollar plan to repair infrastructure and jumpstart the economy includes raising corporate taxes, rebuilding roads and bridges, and replacing lead pipes in the water system. These upgrades would create millions of jobs for American workers and Biden called it a “transformational effort that could create the most resilient and innovative economy in the world.” He also called it a “once in a generation investment in America.” Biden hopes the cost of all these improvements to the infrastructure and economy would be offset by the increase in corporate taxes. Of course, this does not come without some skepticism as some Republicans have expressed opposition to the plan, but President Biden is calling on support from both sides to accomplish what he calls “the largest American jobs investment since World War II.”
As our country continues to struggle to fight the virus and repair the damaged economy, many are placing their hopes that our leadership will follow through and get things back on track but ultimately only time will tell.