WASHINGTON—June’s unemployment report continued to trend in the right direction with 850,000 jobs added, compared to the expected figure of 706,000. Rachel Greszler, a research fellow in Heritage’s Grover M. Hermann Center for the Federal Budget, released the following statement Friday on the way forward:
“Today’s report showed 850,000 more people were employed in June, and though the unemployment rate rose slightly to 5.9% from May’s 5.8%, the increase in jobs was the strongest since August 2020, representing welcome news for Americans. Hopefully, the pace of job gains and the number of workers reentering the labor force will continue over the coming months so that employers can find the workers they need to recover, and productive work activity and earned incomes can replace costly unemployment benefits.
“With a record high number of job openings, a record-high number of workers quitting their jobs, and a record-low number of workers being laid off, there’s zero reason to spend even a dime on so-called ‘job-creation packages.’ Instead, policymakers should refuse to indebt young and future generations and relieve them of the costs of unnecessary unemployment benefit bonuses by ending those programs immediately.
“Unemployment insurance benefits have been wrought with fraud and abuse. The number of unemployment benefit checks has far exceeded the actual number of unemployed workers. Between April 2020 and May 2021, more than 1.365 billion individual weekly checks were delivered, even though 807 million checks would have covered all unemployed workers—that’s a difference of 557 million weekly checks. The math doesn’t add up, and we’re all paying for the mistake.”
Joel Griffith, fellow with Heritage’s Roe Institute, added:
“According to data from the Federal Reserve, all seven of the best-performing states in overall economic conditions since the pandemic began have already opted out of the federal unemployment bonuses, while the seven worst-performing states continue to provide those bonuses. Those top-performing states have actually grown more than 1% from their pre-pandemic levels, while the seven worst-performing states have experienced declines of more than 6%. The right policy solutions are obvious.”
Griffith highlighted that the faster pace of growth in June was likely due in part to governors in 26 states announcing that they are ending the federal unemployment insurance bonuses early—some in June and others in July—amid a massive labor shortage that’s hurting small businesses that are trying to recover, while contributing to higher prices, longer waits, and limited goods and services for consumers.