As the nation finally began to emerge from the depths of the worst COVID surge since the onset of the pandemic this past winter, Americans went back to work in droves. Over the course of March, an estimated 916,000 people were added to nonfarm payrolls, blowing past estimates that anticipated just 675,000 new jobs. January and February were revised upward, too, showing that 156,000 more jobs were created in those months than we thought at the time.
Thus, the experts abandoned their priors. April would surely outpace even March’s surging job market. With warmer weather and precipitously declining COVID case rates as the fully vaccinated population approaches the point of saturation, the conventional wisdom understood that the U.S. would add around 1 million new jobs to the rolls last month. But that’s not what happened. Only 266,000 new jobs were created in April. Worse, March’s numbers were revised downward by nearly 150,000 jobs.
The moment that shockingly disappointing report dropped, a consensus formed around the obvious reason why the job market failed to keep pace with state-level reopening initiatives and declining rates of COVID infections around the country: overly generous unemployment benefits.
There are now more job vacancies in the United States than there were before the pandemic hit. Fifteen-million opportunities are available to job seekers. Firms are going to great lengths to hire and retain talent, and they’re even going so far as to offer incentives such as referral bonuses just for showing up to an interview.
But those job opportunities are primarily manual or low-skilled labor. While college-educated workers have basically returned to pre-pandemic levels of employment, workers with only some or no college education continue to languish. The inescapable conclusion left to us is that the private sector cannot compete for the labor of unskilled and semiskilled workers in an environment in which expanded unemployment benefits and generous stimulus payments together provide those workers with better compensation than they can get from the marketplace.
That is an inconvenient conclusion both for Biden administration supporters and progressives, for whom just giving people money is their one big idea. Thus, this cohort went to work convincing themselves of alternate realities.
Those on the left who took to parsing April’s data soon observed that men were more likely than women to have gone back to work. With that, a theory of everything took shape—one that explains the miss in jobs numbers but also reinforces the prevailing progressive ethos that sees women as a marginalized class within an intractably patriarchal society. “Women are overrepresented in the highest risk jobs [and] most marginalized women have used child care that is not addressed by public policy.” said Kate Bahn, an economist at the Washington Center for Equitable Growth. “It just reached a crescendo.”
You see, women cannot go back to hourly work because facilities like schools are still closed or only partially open. Therefore, only massive federal investments in a sprawling network of childcare “infrastructure” projects can provide America’s beleaguered women with relief. At least, that’s Sen. Elizabeth Warren’s prescription.
It takes a lot of gumption on the part of Democrats, whose overweening constituents in American teachers’ unions are keeping schools from fully reopening despite the low risk presented by in-person education, to shake their finger at a nation that has failed to cater to the economic needs of America’s mothers. But that wasn’t the only idea the left threw against the wall to see if it would stick.
When Goldman Sachs observed that the “labor supply appears to be tighter than the unemployment rate suggests, likely reflecting the impact of unusually generous unemployment benefits,” MSNBC host Stephanie Ruhle wondered why firms couldn’t simply decide to out-compete the government. “Pay more” in wages, she advised, and those firms will “find more workers.” “If margins are so thin that you cannot increase pay without passing it through/losing customers,” she added, “your [business] model doesn’t work.”
But why do those small businesses operate on such thin margins in the first place? Usually, because they’re trying to pass on the savings in reduced operating costs to their customers in the form of lower prices, thereby undercutting and competing against larger providers. Indeed, Ruhle observed that giants such as Amazon, Costco, and Walmart committed to boosting hourly wages during the pandemic. Yet big firms, too, are struggling to fill vacancies.
Major retailers can afford to absorb some of those costs, but smaller retailers can’t—especially when the cost of consumer goods is rising precipitously. In March, the cost of consumer goods increased by 2.6 percent, the largest single-month increase since August 2018. Forcing those firms to sacrifice one of the few competitive advantages they retain against big retailers only accelerates the trends that are transforming American main streets into pallid strip malls replete with characterless national chains. And none of this has much to do with the present labor shortage anyway.
Perhaps the least convincing explanation for employers’ struggle to attract employees was offered on Friday by CNN analyst Catherine Rampell. “Some of that might have to do with, of course, with the fact that they are getting more generous unemployment benefits,” she conceded, “but there are a lot of other factors too, including lack of access to childcare, public transit cutbacks, the risk of getting sick at work, the risk of, frankly, getting assaulted at work if you tell a customer to wear a mask.”
The notion that workers are afraid to take on a public-facing job because one of the heavy-breathing anti-mask caricatures from those viral TikTok videos might descend on them doesn’t comport with the data on which Rampell is ostensibly commenting. One of the only sectors that recovered at something approaching a reasonable pace given environmental factors was the leisure and hospitality sector—one of the most public-facing occupations you could have.
Rampell is right that “there are a lot of complex things going on here.” The ongoing pandemic complicates the picture. But the strained effort to tell the thousands of employers who can’t find workers that they shouldn’t believe their lying eyes is transparently ideological. And Democrats should be terrified by their co-partisans’ desire to talk themselves out of the obvious. When self-evident reality conflicts with ideology, ideology tends to lose that fight.