As US jobless rate falls, some Republicans say federal benefits impact hiring in NC

North Carolina news

RALEIGH, N.C. (WNCN) – A new report Friday shows the nation’s unemployment rate fell in July to 5.4 percent, though businesses in a variety of sectors say they’re still having trouble hiring.

While critics have blamed enhanced federal unemployment benefits as a key reason people aren’t going back to work, new reports this week suggest states that cut off those benefits early didn’t see a substantial difference in hiring based on data so far.

In about half of states, including North Carolina, people who qualify are still receiving an additional $300 per week from the federal government on top of unemployment benefits they receive from the state.

The payments will end in North Carolina on Sept. 4.

This week, some Republican state leaders criticized Gov. Roy Cooper (D) for vetoing a bill that would have stopped the additional payments early, saying they’re hearing from business owners across the state who can’t fill jobs.

“Obviously, they cannot get the workers necessary in order to open their businesses,” said Treasurer Dale Folwell (R).

Cooper has said there are families that still need the payments and the money provides an overall boost to the state’s economy.

He pointed out the benefits will end in a matter of weeks, as there’s no indication Congress will extend them further.

“North Carolina then will go back to one of the shortest and stingiest unemployment benefit systems in the country,” he said.

John Quinterno, a professor at Duke University with expertise in economic and social policy, said while he would like to see more data, the initial reports indicate the decision to cut off the federal benefits early isn’t having the impact that other states’ leaders had hoped.

“A lot of the research that has come out definitely has pointed to the fact that these expanded and extended benefits have not really had the effect on the labor market that maybe we’ve talked about anecdotally,” he said. “That sounds great on paper. But when you look at how the (unemployment) programs actually work, when reality intervenes, it’s a much more complicated story.”

A report released this week by Homebase, a company that works with businesses on payroll and management, found that states that ended federal unemployment benefits early saw employment drop in July by 0.9 percent compared to June. Meanwhile, states that kept the benefits saw employment increase by 2.3 percent in that time period.

“It’s easy to say it’s all unemployment insurance’s fault until you start looking at what are all of the program rules and how is the program actually operating on the ground and is experienced,” said Quinterno.

The U.S. economy added 943,000 jobs in July, beating many economists expectations, according to new federal data released Friday.

Quinterno noted that the national July jobs report showed progress as the nation recovers from the COVID-19 pandemic, but “the progress and the success is very tentative and really depends on the course of the virus” as cases surge again in North Carolina and other states.

A report released Friday by ThinkWhy, a Software-as-a-Service (SaaS) company based in Texas, found Raleigh was the fourth best-performing labor market in the country in July.

“The U.S. labor market is undergoing a major transition with several factors at play, including employees switching jobs, the COVID-19 Delta variant, increasing wage demands and the delay in moving candidates through the recruiting and hiring process”, said Jay Denton, chief analyst for ThinkWhy, creators of talent intelligence software, LaborIQ. “Despite these challenges, however, the labor market continues to make traction toward regaining all jobs lost since the start of the pandemic and remains on track for a full recovery by early 2023.”

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