Unemployment Benefits Are Not Creating A Worker Shortage

While some employers may be struggling to hire for one reason or another, economists say generous unemployment benefits are not the cause.

Sen. Ben Sasse (R-Neb.) said the benefits would “knock this nation still harder in the coming months by unintentionally increasing unemployment.”

But as Federal Reserve Chairman Jerome Powell said last week, overall wage growth hasn’t increased. “We don’t see wages moving up yet, and presumably we would see that in a really tight labor market,” Powell said at a press conference. “And we may well start to see that.”

For now, unemployment remains elevated, at 6%, compared to 3.5% before the pandemic, and there were 4 million more unemployed people in March 2021 than in February 2020.

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