Fourth stimulus check: The No. 1 reason it won’t happen
While a fourth stimulus check (or similar type of additional relief) hasn’t been completely ruled out, there’s a big reason it may not happen: A fourth stimulus check may not be needed.
Some conservative analysts and state-government officials suggest that providing more direct payments or unemployment benefits could worsen the existing labor shortage in a variety of industries, including restaurants and manufacturing. The argument? Additional aid may disincentivize workers from returning to lower-wage jobs.
Republican governors in 22 states have stopped accepting the $300-per-week federal unemployment-benefit supplements, even though the program is set to run until September. They cite workforce shortages as one reason for ending the supplements in their states. Business owners are also blaming federal aid for a slowdown in hiring.
JPMorgan Chase CEO Jamie Dimon has relayed this concern to Congress, where conservative lawmakers are unlikely to support ongoing aid.
“People actually have a lot of money, and they don’t particularly feel like going back to work,” he told members of the House Financial Services Committee during a hearing last week (May 27).
Are stimulus benefits really keeping people home?
However, unemployment benefits may not be the direct cause of the labor shortage in low-wage positions. While one study suggests that 1 in 7 workers are staying home due to ongoing unemployment-benefit supplements, some economists say that federal aid is not likely to be the major reason people aren’t returning to work.
“My guess is the $300 is having some discouraging effect on people working, but that it’s not a gigantic effect,” Joseph Vavra, an economics professor at the University of Chicago, told CNN. “But I have a lot of uncertainty because I just don’t think we have good data.”
For some Americans, unemployment checks aren’t what’s keeping them at home. Pre-existing medical conditions and the lack of child care are. More than 7 million adults have reported trouble finding child care — due to facilities closing or going remote — for kids who are not in out-of-home school or daycare.
The pro-business U.S. Chamber of Commerce has called the worker shortage a crisis and has made getting people back into jobs its primary focus with an initiative called “America Works.” The plan does address affordable child care with a proposal to create more public-private partnerships.
Or should businesses just pay people more?
However, what may really be at issue is pay. Low (and stagnant) wages may discourage people from going back to work in warehouses, restaurants and retail shops.
The Biden administration earlier this year proposed raising the federal minimum wage to $15 per hour, a provision that did not move forward. Some companies have announced plans to raise hourly wages to $15 (or higher), though this only impacts a small percentage of employees nationwide.
We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.
For all the latest Technology News Click Here