It’s Not That People Don’t Want to Work, It’s That Work Is Broken
Social media has been abuzz this week with restaurants and hotels claiming they can’t find enough workers to fill open jobs — one study from the conservative-leaning NFIB said 44% of businesses were lacking employees. Republicans have blamed the stimulus and unemployment payments as disincentivizing work. But what’s really going on is more complicated.
The Washington Post reports that many analysts say the lag in hiring is “an anomaly” and that more people will go back to work once they get vaccinated. Others suggest a lack of child-care is still holding back job gains — and in fact, all 266,000 jobs the economy did add in April went to men, while women actually lost jobs.
Yet others suggest that the nature of low-paid retail work is just…not that appealing for people, and the coronavirus pandemic has been the straw that finally triggers that realization. “The problem is we are not making enough money to make it worth it to go back to these jobs that are difficult and dirty and usually thankless. You’re getting yelled at and disrespected all day. It’s hell,” one former retail worker told the Post.
A brief from the Economic Policy Institute backs up this last theory, noting that while there are some labor shortages, they seem mostly confined to leisure and hospitality, which is “highly segmented off from other sectors” and not likely to affect the labor market in other sectors. EPI also reiterated that a lack of childcare is keeping women out of the workforce, and cutting unemployment benefits wouldn’t do anything on that front to get women back at work.
Tighter Payday Lending Rules Likely to Pass Congress
The Senate Tuesday passed a resolution to repeal a rule that allowed consumers to take loans with interest rates above their states’ maximum, what consumer-interest groups widely called a loophole to get around payday lending restrictions, The Hill reports.
The resolution heads to the Democratic-controlled House, where it is expected to pass, and President Biden has signaled that he will sign.
While many states cap interest rates on short-term payday loans, banks are generally exempt from those caps, the National Consumer Law Center said in a brief on the issue. The “true lender” rule, approved in October 2020, makes payday lenders, operating out of states where interest rates are not capped, able to lend to people in-state as long as an in-state bank is named as the lender on the loan paperwork.
“States are taking measures to protect their constituents … their consumers against these end-runs around their laws designed to prohibit these predatory practices. But last October, in the middle of the pandemic, when many working families were plunged into economic uncertainty and turmoil, the Trump administration gave these rent-a-bank schemes a free pass to exploit these loopholes,” Sen. Chris Van Hollen (D-Md.), sponsor of the resolution to repeal the rule, told The Hill.
New Jersey Plans Stimulus Checks for Undocumented Residents
Low-income undocumented people living in New Jersey will receive one-time stimulus checks funded by the CARES Act, Gov. Phil Murphy announced this week and NJ.com reported.
To receive the stimulus payment, people will have to show they were excluded from other forms of relief, that they made less than $55,000 last year, and that they were affected by the coronavirus pandemic.
The news comes after 35 essential workers began a month-long hunger strike to raise awareness about the need for financial relief. Last Friday, those workers said they would end their hunger strike, but they emphasized that the NJ fund would “only reach a fraction of the population of excluded workers and their families, and is not nearly enough to meet the vast and desperate need.”
American Recovery Act Money Flowing to Cities
The $350 billion in federal funds for states and cities is starting to flow, various news outlets have reported. The U.S. Treasury has released guidance on how the funds can be spent. In general terms, the money can be spent on COVID-19 responses such as contact tracing or vaccination clinics; programs that help businesses and industries recover; essential workers’ pay; revenue replacement; and water, sewer and broadband infrastructure.
Not on the list, to the dismay of state legislators in Colorado: Transportation.
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.