Last week the US Jobs report, the indicator of how many people are entering or leaving the jobs market, came out. The numbers showed something just isn’t right in the USA. Estimates were that approximately 1M jobs would be added to the already growing economic climate. Unfortunately, only a paltry 265K people were added to the number of working Americans. Why?
Prior to the pandemic of 2020 the US economy was a juggernaut, the envy of the free world. President Trump claimed he would be the greatest “Jobs President in history. He made good on that claim. There was so much competition for workers that records were being set monthly.
Black unemployment was at record lows. The same for women, Hispanics, and Asians. The Dow And NASDAQ, indicators of the expectation of corporations were soaring. It was arguably the best economy in US History. Add to these numbers America had achieved something never realized prior to this point. America had become energy independent, actually become a net exporter of oil.
The Pandemic of 2020 put a hold on the American economy, that up to this point was the best in history but the underlying numbers were still there. Nothing had changed as far as policy, only in activity had changed. The American consumer, business and workers only needed the greenlight to get back to Making America Great Again. But something had changed.
During the shutdown in order to keep workers, business, and consumer whole the federal government had instituted a series of economic policies. These policies were temporary and were meant to be a gap and not a long-term and certainly not a permanent help for the American citizen who was asked to close their businesses, stay at home and curve the spread of the Coronavirus.
It wasn’t a perfect plan, many people fell through the gaps and something interesting happened, unemployment checks, which were meant to be a temporary payment for unemployed workers, were larger than the actual wages of many workers. At first this was chuckled about. No one wanted to stay home, all the feds had to do was to flip on the light switch, open the economy and the workers would come roaring back to their former jobs.
This is when an unfortunate consequence was realized. American workers found that it didn’t pencil going back to work when they could make as much or even more on unemployment. The Biden Administration quickly responded to this obvious observation by saying, No, there were other reasons why only a quarter of the people expected to return to work actually did.” But facts are hard to argue with.
Many workers are opting to stay at home rather than go back to work for one reason, they can. These hard-working Americans have made the conscious economic decision to live on less and stay at home. The Biden Administration has to make some hard decisions. Will they risk engendering the anger of Americans by cutting back on their unemployment pay or continue to watch as America becomes a true Nanny State.