A staggering 40% of small business owners were unable to fill job vacancies last month – an increase of seven points from January.
This discovery comes from a new report by NFIB (a small business advocacy group). The inability to fill vacancies occurs despite the fact that 25% of small businesses increased their pay during the same period, the report finds.
Employers are feeling the pinch, with 24% claiming that the quality of the workforce is the main business problem. Another 51% reported few or no qualified candidates for the positions they sought to fill, a statistic that becomes even more worrying, as economists are predicting millions of new jobs by the end of the year.
These findings are quite shocking, given the current unemployment figures in the country, which range from 10 million to 18 million without work (the government does not know exactly). This is a significant margin, but it still shows that there are many people who should be knocking down the doors of business owners in search of jobs.
So, where are the workers?
There are several factors that can influence the hesitation to return to the office. The lengthy reopening of schools has placed an enormous burden on families. The lack of daycare centers has been especially damaging to working women. Globally, women lost their jobs during the pandemic at a rate 1.8 times that of men and are unlikely to return to work until day care centers are available.
Others, especially those with pre-existing health problems, may be afraid to resume daily activities.
But all things considered, the increase and extent of federal government unemployment benefits are likely to play a disproportionate role in the decision many Americans are making to stay at home.
Before the pandemic, the average unemployed person was paid $ 378 a week, and most states offered these benefits for a period of 26 weeks or less. But in response to the blockades (which the government itself has implemented), Congress began approving “relief” packages in 2020 that broadly expanded those numbers.
At the height of the pandemic, individuals received $ 600 a week from the federal government, giving the average collector a weekly fee of $ 978 for an extended period of 39 weeks.
The country is clearly on the other side of the crisis. Millions are being vaccinated, the number of cases and hospitalizations has decreased, and we now know that the disease is not as deadly as we feared. At the very least, workers must be encouraged to return to the market and begin the process of rebuilding our economy. Unfortunately, Congress went in the opposite direction last week, approving a new “stimulus package” that renewed and extended unemployment benefits.
Under the new legislation, unemployed Americans can receive benefits until September this year (depending on the program) and will receive between $ 300 and $ 400 additional federal dollars per week.
All of these increases have created an environment where many unemployed people receive more money to stay at home than they have ever earned at work, creating an obvious incentive for people to remain unemployed.
At the beginning of the pandemic, we at FEE warned that the government’s response could end up being more damaging than the disease itself. And the inability to attract workers back to the market is just one of many examples of this prediction coming to fruition. It is a result that is made even more infuriating by its obvious predictability: if you pay people more to sit at home than they might otherwise earn, obviously some will choose not to work.
Ironically, we saw that the government’s response to unemployment actually creates prolonged unemployment. This is a poignant example of what happens when policymakers focus on the “visa” but neglect the “invisible” side effects, a criticism first identified by French economist Frederic Bastiat.
“A law produces not just one effect, but a series of effects,” wrote Bastiat. “Of these effects, the first alone is immediate; it appears simultaneously with its cause; It’s seen. The other effects come only later; they are not seen. “
“There is only one difference between a good economist and a bad one: the bad economist is limited to the visible effect; the good economist takes into account both the effect that can be seen and what must be predicted ”, he concluded.
Modern economists refer to these “invisible” effects as unintended consequences.
The government’s response to the coronavirus has created many unintended consequences, including the employment dysfunction discussed above. Politicians may have seen increased benefits as a benevolent act that would ensure that those expelled from work by government restrictions would maintain their standard of living and avoid poverty. This was the “seen” effect of the program. But there were many informed voices about the economy that predicted the invisible and damaging effects of such interventions all the time, predicting that these benefits would paralyze the economy and delay the return to normal.
If you pay people more to stay at home than they might otherwise earn, obviously some will choose not to work.
In a statement on the most recent stimulus package, President Biden said: “This legislation aims to give the backbone of this nation – the essential workers, the workers who built this country, the people who keep this country going – a chance to fight . “
That may be the intention. But the real effect is to foster dependency and discourage work.
This is not giving Americans a chance to fight. You are preparing them to lose.