WASHINGTON—July’s unemployment report was surrounded by uncertainty, but today’s numbers represent positive news, with 943,000 jobs added and the unemployment rate falling to 5.4%. Rachel Greszler, a research fellow in Heritage’s Grover M. Hermann Center for the Federal Budget, released the following statement Friday on the path forward:
“After half of the states ended unemployment insurance benefits, the unemployment rate fell by more in a single month than it did over the prior five months.
“Strong job gains of 943,000 in July, with the unemployment rate falling half a percentage point to 5.4% is welcome news, and shows that states that ended unemployment insurance benefits did the right thing for their workers, employers, and economies. To recover from this pandemic, we must encourage people to get back to work.
“Not only is this great news for the 943,000 individuals who have jobs and are positively contributing to our recovery, but it’s great news for families and employers as well. Those 943,000 filled jobs are crucial to combatting higher prices, supply shortages, and anemic economic recovery. Hopefully, job growth will continue over the coming months so that even more of the record-high 9.2 million job openings will be filled.
“Notably however, even as the number of unemployed workers declined to 8.7 million in July, unemployment insurance programs were sending checks to 13 million people. That’s 4.3 million people receiving benefits who aren’t unemployed. Since the pandemic began, massive fraud by criminals stealing Americans’ identities and falsely claiming unemployment benefits has meant that unemployment checks far exceeded the number of unemployed people.
“A Heritage analysis found that unemployment insurance programs sent out a total of 1.365 billion weekly benefit checks between April 2020 and May 2021, but covering every single unemployed worker—an optimistic goal—would have required only 807 million benefit checks. That’s an excess of 557 million unemployment checks and $357 billion of taxpayers’ money sent to people—likely criminals—who weren’t unemployed. This negligence and waste of taxpayer dollars must stop.”
Greszler highlights that the unemployment expansions were supposed to last for fewer than five months, yet most are now on track to remain on the books, 18 months after the start of the pandemic. About 70% of the excessive and fraudulent payments have occurred after the benefits were supposed to expire. It’s time for the remaining governors to end these excessive and poorly managed pandemic unemployment benefits—to protect hard-earned tax dollars from going to criminals, and so employers across America can hire the workers they need to recover and meet Americans’ demand for goods and services.