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Extra $300 in benefits not discouraging return work, fed official says

Federal Reserve Governor Lael Brainard said the recent

Federal Reserve Governor Lael Brainard said the recent decrease in unemployment claims indicates that "a lot of people out there really want to work."  Credit: James T. Madore

The $300 federal supplement to weekly unemployment benefits is not discouraging the jobless from returning to work, the new U.S. labor secretary said this week, disagreeing with business owners around the country who complain it is doing just that.

"I think there’s way too much conversation on the $300," Labor Secretary Martin J. Walsh said Tuesday. "Saying this $300 is preventing [businesses] from being successful…we don’t see it, and the President doesn’t see it."

Addressing reporters on a conference call Tuesday, Walsh said while he doesn’t "dispute that there are definitely areas where restaurants and some other businesses are having a hard time finding workers," he rejects the notion that the expanded jobless benefits are the culprit.

"Most Americans would rather be working," he said. "People on unemployment…I still think they’re living week to week. People are worried about losing their homes."

Many restaurants, retailers and other service-sector companies blame the $300 supplement, which will continue into September, for discouraging employees from resuming work. In some cases, the supplement combined with regular unemployment benefits is higher than workers’ pay.

Still, the unemployed risk losing their benefits if they turn down "a suitable job," Walsh said Monday during a virtual meeting of the Society for Advancing Business Editing and Writing (SABEW).

He said employers who cannot yet afford to bring back employees full time should enroll in shared work programs, where employees receive unemployment for the days they aren’t working.

In New York, nearly 61,600 workers, including 5,525 on Long Island, have participated in the state’s Shared Work Program in the past year, according to data from the state Department of Labor, which runs the program.

Lael Brainard, a Federal Reserve governor and economist, said arguments that the $300 supplement is discouraging a return to work "don’t make a lot of sense" based on hiring in the leisure and hospitality sector last month and in March nationwide.

"That sector has the lowest average hourly earnings of all industry sectors…and that’s where we’re seeing the big increases in employment," she told the SABEW conference Tuesday.

Brainard said there was "a big 1.3 million decrease in unemployment claims between March and April, which suggests that people who were previously receiving unemployment insurance decided to return to work even though they were receiving [supplemental] benefits…A lot of people out there really want to work," she said.

Businesses still see the supplement as a challenge to hiring.

The extra $300 is "one of many factors" that Marriott hotels face in hiring, Anthony Capuano, the company’s new CEO, said during a Tuesday session of the business journalists’ group. He also cited competition for workers from Amazon, Walmart and other retailers and the continued closing of school and day care centers, which keeps parents home looking after their children.

"We’ve seen challenges in the markets where we’ve seen the most rapid recovery," he said, citing 8,000 job openings in Florida, Arizona and Texas.

Capuano said Marriott supports increasing the federal $7.25-per-hour minimum wage.

"We believe there should be an adjustment to the minimum wage…We think it should be phased in," he said.

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