Where jobless benefits were cut, jobs are still hard to fill

By Matthew Rosenberg and Jim Rutenberg

By lunchtime, the representatives from recruiting agency Express Employment Professionals decided to pack up and leave the job fair in this St. Louis suburb. Hardly anyone had shown up.

“We were hoping we would see pre-pandemic levels,” said Courtney Boyle, general manager of Express. After all, Missouri had just cut off federal unemployment benefits.

Business owners had complained that the assistance, as Gov. Mike Parson put it, “incentivized people to stay out of the workforce.” He made Missouri one of the first four states to halt the federal aid; a total of 26 have said they will do so by next month. But in the St. Louis metropolitan area, where the jobless rate was 4.2% in May, those who expected the June 12 termination would unleash a flood of job seekers were disappointed.

Workforce development officials said they had seen virtually no uptick in applicants since Parson’s announcement, which ended a $300 weekly supplement to other benefits. And online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.

Of course, it’s early. But conversations with employers who are hunting for workers and people who are hunting for jobs in the St. Louis area revealed stark differences in expectations and assumptions about what a day’s work is worth.

The divide raises a fundamental question of what a healthy labor market looks like. Does it mean workers are on such a knife edge that they feel compelled to take the first job that comes along? Or is it one in which employers are the ones who have to scramble and feel pressured to raise wages and improve working conditions? Are the economy and the public better off when workers get to be choosy or when employers do?

“One way you might define normal is when employers and workers have the same idea of what an appropriate package looks like, and then the issue is matching up the people with the jobs,” said Katharine Abraham, an economist at the University of Maryland and a former commissioner at the Bureau of Labor Statistics.

“Clearly part of the problem now,” she said, “is that what employers and what workers think is out of whack.”

Why businesses are having such trouble hiring when 9.3 million people were unemployed in May is a puzzle that has generated lots of speculation, but little hard evidence. Many economists are skeptical that enhanced jobless benefits have played an outsize role in the hiring squeeze. They are more likely to point to child care and continuing health fears with less than half the population fully vaccinated. Nor should it be surprising that the nation’s road back from the harrowing limbo of the pandemic, in which millions of jobs vanished and more than 600,000 people have died, is bumpy.

In any case, the squeeze has given many job seekers the confidence that they can push for higher wages or wait until employers come around.

“They know how in demand they are,” said Angelic Hobart, a client service manager at American Staffing who occupied a table at the Maryland Heights job fair. “And I think that is being taken advantage of.” She said she had dozens of manufacturing, warehouse, sales, office and technology positions to fill. But public benefits have made people “very complacent,” she said. And sometimes “their pay expectations are way over what their skill level is.”

Many of the 34 employers and agencies at the job fair said they had raised wages by $1 an hour or more in recent months. And they shared a refrain: There were good jobs available but not enough good workers to fill them, those who were reliable and were willing to work hard.

That’s not the way Elodie Nohone saw it. “They’re offering $10, $12, $13,” said Nohone, who already earns $15 an hour as a visiting caregiver and was hoping to find a higher-paying opportunity. “There’s no point in being here.”

Hundreds of jobs were being offered at the fair. A home health care agency wanted to hire aides for $10.30 an hour, the state’s minimum, to care for disabled children or mentally impaired adults. There were no benefits, and you would need a car to get from job to job. An ice rink, concert and entertainment center was looking for 80 people, paying $10.30 to $11.50 for customer service representatives and $13 for supervisors. But the jobs last just through the busy season, a few months at time, and the schedules, which often begin at 5 a.m., change from week to week.

In St. Louis, a single person needs to earn $14 an hour to cover basic expenses at a minimum standard, according to Massachusetts Institute of Technology’s living-wage calculator. Add a child, and the needed wage rises just above $30. Two adults working with two children would each have to earn roughly $21 an hour.

Amy Barber Terschluse, owner of three Express franchises in St. Louis, handles mostly manufacturing, distribution and administrative jobs. Wages, hours and a short commute are what matter most to job seekers, she said, and few would work for less than $14 an hour.

Terschluse said she had also had to educate employers, who have gotten used to low wages and the ability to dictate schedules and other conditions.

Some employers, she said, have also gotten into “a vicious cycle of replace, replace, replace.”

In industries such as hospitality and warehousing, annual turnover rates can surpass 100%, which can pare overall growth. Mary Daly, president of the Federal Reserve Bank of San Francisco, said good job matches between employers and workers produced the most productivity and engagement.

A dynamic labor market is one where the two sides negotiate over compensation, Daly said. If jobless benefits allow people to be a little more choosy because they are not destitute, she said, then “I, as an economist, predict that will be better for job matches and a better economy in the long run.”

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