Q&A Of The Day – How Many People Are Choosing To Stay On Unemployment?
Each day I feature a listener question sent by one of these methods.
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Today’s entry: I’ve heard you discuss the negative consequences of extended and supplemental unemployment benefits. Thank you, my business is among the impacted. During the Great Recession any job openings I posted would have brought dozens of applications because people were hungry to get back to work. Now the country has incentivized laziness and it’s hurting everyone including the lazy people collecting unemployment. My question is if we know how many people would likely go back to work if it weren’t for the extended unemployment benefits?
Bottom Line: There’s no way to give you a hard number but I can give you a pretty good idea. According to the last month’s job’s report from the Bureau of Labor Statistics, there are 9,812,000 people collecting unemployment. Incidentally, despite record job openings being posted and increased job openings due to pandemic restrictions being rolled back in various states there are 102,000 more people collecting unemployment today than a month ago. The bottom line is that it’s a demonstrable fact that many have opted to collect unemployment with the federal supplemental assistance as opposed to going back to work. This isn’t a surprise, as this phenomenon has played out regarding welfare benefits previously. In terms of figuring out how many of the near ten million people on unemployment are collecting by choice... I’m going to use to opening data.
According to the Department of Labor’s JOLTs report there are currently a record 8.12 million job openings. In the past month alone, there were 2 million more new job postings than hiring's which took place. It’s remarkable that there are 102,000 more people collecting unemployment today compared to a month ago while there are 2 million more jobs available today compared to a month ago. But that’s what incentivizing complacency will do to a society. Now to figure out how many are collecting by choice I’m going to compare today’s data to where we were in February of 2020 – when we had record low unemployment.
In February of 2020, the US unemployment rate was 3.5% with 5.8 million people collecting unemployment. The February 2020 JOLTs report showed 6.9 million job openings. So, there was a difference of 1.1 million between job openings and those collecting unemployment. Today that total is 1.692 million. This implies that at a minimum there are 592,000 Americans, or 6% of those unemployed, choosing to collect unemployment rather than working. The high end would be the difference between the two job openings reports - 1.22 million people or 12.4%. So, while I can’t provide a precise number it can be evidenced that between 6% to 12% of those unemployed right now having chosen to remain unemployed.
In Florida, there are 474,626 people collecting unemployment. That means that between 28,500 and 57,000 Floridians have likely chosen to collect unemployment as opposed to work. Precisely why Governor DeSantis refused to increase unemployment benefits in the state session.
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