Cutting unemployment insurance benefits did not boost job growth: July state jobs data show a widespread recovery
Key takeaways:
- The July state employment and unemployment data released Friday showed that strong job growth is widespread throughout the country, including in leisure and hospitality and state and local governments.
- States that chose not to cut federal pandemic unemployment insurance (UI) benefits have, on average, experienced greater job growth since April than the 26 largely Republican-controlled states that cut benefits to unemployed workers.
- Leisure and hospitality employment has grown at a quicker rate in states that preserved full UI benefits than in those that cut federal assistance.
- However, with a nationwide jobs shortfall of between 6.6 and 9.1 million jobs, the economic recovery is still far from complete. Policymakers at every level of government should take action to help speed the recovery.
The July state employment and unemployment data released Friday by the Bureau of Labor Statistics (BLS) showed that the strong job growth reported earlier this month in the national jobs data was widespread throughout the country. And, notably, the states that chose not to cut pandemic unemployment insurance (UI) benefits have experienced, on average, greater job growth in recent months than states that cut benefits to unemployed workers.
Over the last three months (from April to July), all but three states—Alaska, Kentucky, and Wyoming—added jobs, with particularly strong growth in Hawaii (4.0%), Vermont (3.5%), North Carolina (2.7%), Arizona (2.6%), and New Mexico (2.5%). Figure A shows each state’s July unemployment rate and the change in employment over the past three months, 12 months, and since February 2020 (the month before the recession.)
Richard Trumka was a champion for workers’ rights: Passing the PRO Act was one of his top priorities
The labor movement lost a giant last week. Richard Trumka was a champion for workers’ rights and a passionate leader of the labor movement. In addition to serving as President of the AFL-CIO, Trumka served as Chairman of EPI’s board of directors since 2012. Under President Trumka’s leadership, EPI and AFL-CIO have shared an unwavering commitment to advancing workers’ rights and strengthening unions.
For President Trumka, “the next frontier” for U.S. workers was the Protecting the Right to Organize (PRO) Act. Passing the PRO Act would restore workers’ ability to organize with their co-workers and would allow them to negotiate for better pay, benefits, and fairness on the job. Passing the PRO Act would also promote greater racial economic justice because unions and collective bargaining help shrink the Black–white wage gap.
Every day, corporations openly bust unions and retaliate against working people without consequence. President Trumka spent his career fighting these attacks on working people’s right to organize and collectively bargain. We need meaningful policy changes to restore a fair balance of power between workers and employers. That is why Congress must pass the PRO Act.
As President Trumka said on June 29, “the single best agent for change is the PRO Act.” We at EPI will honor his memory by continuing to advance policies like the PRO Act that are critical to workers and a fair economy.
July inflation data show the lowest monthly gain in consumer prices since February
Below, EPI director of research Josh Bivens offers his initial insights on today’s release of the Consumer Price Index (CPI) for July. The data show the lowest monthly gain in consumer prices (0.5%) since February and ultimately support a transitory view of inflation. Read the full Twitter thread here.
The core index (excluding food and energy) saw an even much larger deceleration – rising 0.3% in July from 0.9% growth the month before. The big story in the data is that the used car price spike finally flattened out. 2
— Josh Bivens (@joshbivens_DC) August 11, 2021
June Job Openings and Labor Turnover Survey shows an uptick in hires and quits, while layoffs dropped
Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Jobs and Labor Turnover Survey (JOLTS) for June. Read the full Twitter thread here.
The uptick in the quits rate is notable, likely due in part to increased opportunities for workers to find better job matches, potentially with higher wages or safer working conditions in the lingering pandemic (which had not worsening as much during the June reference period). pic.twitter.com/bYOCIhlEYy
— Elise Gould (@eliselgould) August 9, 2021
The racist campaign against ‘critical race theory’ threatens democracy and economic transformation
Over the past several months, conservative lawmakers and activists have carried out a concerted assault against a wide range of efforts and ideas that raise awareness about the history of racial injustice in the United States, its embeddedness in our society, and the resulting inequities observed today. Attackers have grouped and conflated all these concepts and ideas into what they are dubbing “critical race theory.” But those carrying out this campaign are not interested in what the actual academic critical race theory (CRT) says.
In fact, what is actually under attack is the reinvigorated movement across the United States to engage in dialogue about our country’s continuing legacy of racial hierarchy and oppression—and the policy choices that could finally begin to redress that legacy. And while the campaign against critical race theory is recent, it is merely the latest tool many states have wielded in order to disempower and further disenfranchise Black people as well as cut off any broad-based support for structural reform.
July jobs report shows an economy on track to recover five times as fast as the Great Recession recovery
Below, EPI economists offer their initial insights on the July jobs report released today, which showed an increase in 943,000 jobs. They see strong growth in employment, including in leisure and hospitality, and an economic recovery on track to pre-COVID health by the end of 2022.
From EPI senior economist, Elise Gould (@eliselgould):
Read the full twitter thread here.
After ticking up in June, the unemployment rate fell for the right reasons in July as more people found work rather than left the labor force.
The unemployment rate fell for all race/ethnic groups in July, but the unemployment rate for Black male workers remains high at 8.4%. pic.twitter.com/CONN2kcadk
— Elise Gould (@eliselgould) August 6, 2021
State and local American Rescue Plan funds should be used to support an equitable recovery for workers
Last month, we at the Economic Policy Institute submitted a public comment on the U.S. Department of the Treasury’s guidance regarding the Coronavirus State and Local Fiscal Recovery Funds. These funds are part of the American Rescue Plan (ARP) Act’s resources for state and local communities to respond to the public health and economic crisis. The funds—nearly $350 billion—may be used to support public health responses, mitigate negative economic impacts, replace public-sector revenue lost due to the pandemic, provide premium pay for “essential” workers, and make necessary investments in water, sewer, and broadband infrastructure.
The current public health and economic crisis is happening in the wake of more than a decade of underinvestment by state and local governments. During the Great Recession, cuts to jobs and state and local spending delayed a full recovery to pre-recession unemployment rates by more than four years. Public-sector job losses, especially in state and local education, were among the highest during the pandemic. Cuts to public services and staffing have been especially harmful for women and Black workers, who are disproportionately employed in the state and local public sectors.
Black women face a persistent pay gap, including in essential occupations during the pandemic
This year, Black Women’s Equal Pay Day arrives 10 days earlier than in 2020 (August 13). If this seems inconsistent with current realities, it is. That’s because the August 3, 2021, date is based on the comparison of median annual earnings for full-time, year-round workers reported in the 2020 Annual Social and Economic Supplement of the Current Population Survey (CPS). Since the reference year in that survey is the previous year—2019—the earlier date is more a statement about pay equity during the pre-COVID period of historically low unemployment than the impact of the pandemic.
Based on hourly wages available for 2020, the pandemic’s effect on pay inequality in 2020 is challenging to interpret since job losses were concentrated among low-wage occupations, which has the effect of skewing the distribution toward a higher average that is less representative of the workforce as a whole. These lower-paying jobs were concentrated in leisure and hospitality and education and health services—industries that employ a disproportionate share of women.
In fact, the pandemic’s effect on pay equity during 2020 is less about a relative difference in dollars per hour and more a matter of a disproportionate share of women—and Black women in particular—becoming unemployed and thus wageless. Nearly one in five Black women (18.3%) lost their jobs between February 2020 and April 2020, compared with 13.2% of white men (see figure below). As of June 2021, Black women’s employment was still 5.1 percentage points below February 2020 levels, while white men were down 3.7 percentage points.
Worker protection agencies need more funding to enforce labor laws and protect workers
The COVID-19 pandemic has exacerbated the widespread dangers and injustices that workers face every day. For too long, workers have been forced to work in unsafe conditions, suffered from excessive wage theft, and been subjected to discrimination and harassment. While laws aimed at deterring these workplace abuses already exist, enforcement efforts have been woefully insufficient because the agencies tasked with protecting workers are chronically under-resourced. As Congress and the Biden administration work on budget spending and COVID-19 recovery legislation, there is an urgent opportunity to correct these inadequacies in our labor law system and boost funding for enforcement agencies.
The Department of Labor (DOL) and the National Labor Relations Board (NLRB) enforce major worker protection laws, including the Fair Labor Standards Act, the Occupational Safety and Health Act, and the National Labor Relations Act. These statutes guarantee U.S. workers a minimum wage, a safe and healthy workplace, and the right to collective bargaining, respectively, but weak enforcement has led to pervasive and repeated violations of these laws. Despite inflation, a growing workforce, and increasingly complex workplaces, funding for agencies like the Wage and Hour Division (WHD), Occupational Safety and Health Administration (OSHA), and the NLRB has largely remained stagnant over the last decade, as shown in Figure A.
As Arkansas and Missouri see a rise in COVID-19 cases, more economic protections are needed
Key takeaways:
- As the Delta variant of COVID-19 spreads throughout the United States, Arkansas and Missouri are facing an even more dramatic spike in COVID-19 cases, in part due to lower vaccination rates. This puts many at risk and may contribute to long-term economic problems in the region.
- To mitigate these effects, Missouri and Arkansas policymakers must take immediate action to strengthen public health and the economy, including:
- Expanding Medicaid and eliminating barriers to benefits.
- Recommitting to the federal expansion of unemployment benefits to cushion the economic harm as business disruptions grow.
- Enacting paid sick leave and paid family and medical leave.
As COVID-19 cases and hospitalizations begin to rise again across the country, some states are more vulnerable than others. Neighboring states Missouri and Arkansas are in the middle of a serious COVID-19 spike along with Louisiana, Florida, and Mississippi. The number of cases per capita in the two states—about 52 new cases daily per 100,000 residents in Arkansas and 40 per 100,000 residents in Missouri—is more than twice the national average of 19. The seven-day rolling average of deaths in the two states is rising rapidly and is three times the national average. Mercy Hospital in Springfield, Missouri, ran out of ventilators over the Fourth of July weekend. Hospitals across the state of Arkansas are already reaching maximum capacity—even as a record number of COVID-19 hospitalizations are anticipated in the coming weeks.