The Biden administration changed its messaging on unemployment on Friday after the May jobs report showed another lower-than-expected gain in jobs amid nearly universal state re-openings and loosened COVID guidance from the Center for Disease Control and Prevention (CDC).
The Labor Department reported only 559,000 jobs had been created in May, over 100,000 less than the 671,000 jobs that analysts expected. Unemployment declined to 5.8% from 6.1%, which was better than the expected 5.9%.
Prior to the report’s release, the White House had resisted the idea that the federal extended unemployment boost of $300 per week on top of state benefits was keeping people from looking for work, but after the report, press secretary Jen Psaki did not repeat those talking points.
Psaki said Friday that it was a “difficult thing to analyze” whether the extended benefits were holding back job creation, and that states had “every right” to cut those benefits off early.
Hedging the narrative
As she often does, Psaki tried to have it both ways in her comments. While almost encouraging states to cut off the federal boost, she downplayed the effect those actions would have by saying that it would only cut the benefits by “six to eight weeks.”
She also said the unemployed “should” be able to get the extra benefits, but emphasized they were meant to be “temporary.”
“Some governors disagree, that’s OK. At the end of the day in early September, these benefits will no longer be a part of the plan,” she said.
In remarks he made from Delaware on Friday, Biden described the extra $300 weekly benefits as “a temporary boost in unemployment benefits that we enacted helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated,” adding, “But it’s going to expire in 90 days — it makes sense it expires in 90 days.”
Keeping benefits temporary
Remarks about the unemployment benefits being “temporary” is a shift from some earlier talk from Democrats of enacting a permanent benefit or some sort of universal basic income.
It’s easy to talk in theoretical terms about giving people money every month, but seeing what even this “temporary” boost does to a monthly jobs report should give progressives pause about their grand plans to give away money and require nothing in return.
Human nature is such that most people will stay at home and not work if they can still get paid. If Biden and the Democrats really want to see economic recovery, they need to do everything they can to encourage people to go back to work now, before businesses give up and shut down due to lack of workers.
The future of the American economy may very well depend on it.