Treasury Secretary Janet Yellen has admitted that pandemic relief signed into law by President Joe Biden and which extended outsized unemployment benefits to Americans has, in the end, left the workforce “quite depressed” as a record number of people quit their jobs in September.
A combination of a healthy job market and lingering fears over COVID-19, despite record vaccination and falling infection rates, combined to lead some 4.4 million people to quit their positions earlier this fall.
But the resignations have also created massive understaffing at businesses and job sites around the country, leaving employers scrambling for ways to fill vacancies.
“Americans feel confident about the job market. Quits have increased up to record numbers, which is a sign that people are getting outside offers,” she told CBS’ “Face the Nation” on Sunday.
Treasury Secretary Janet Yellen tells @margbrennan in an exclusive interview that labor force participation is "quite depressed" compared to pre-pandemic levels, something she says is due concerns over COVID exposure, particularly in "public facing" fields like childcare. pic.twitter.com/I8pcIAnXsi
— Face The Nation (@FaceTheNation) November 12, 2021
According to Labor Department statistics, there were more job openings in September than there were unemployed people, who numbered around 7.7 million, a dynamic that further illustrates how hard it has been for many companies and businesses to lure workers.
But while most anticipated that as the pandemic subsided tens of millions of Americans would be eager to return to work after losing jobs due to shutdowns and closures, Yellen admitted that Biden’s American Rescue Plan and former President Donald Trump’s CARES Act undercut that enthusiasm by providing more in unemployment relief than many people had earned at their jobs.
At the time, several Republican lawmakers warned that would happen, but many signed off on the legislation anyway due to the devastation pandemic work closures wrought on employment.
As for Yellen, she said the extra unemployment benefits left Americans feeling “good about their finances” even amid the damage to the economy generally.
Nevertheless, Biden and most Democrats have pushed to extend the unemployment benefits but Republicans and some moderates have pushed back saying that doing so will further de-incentivize millions more Americans from returning to the workforce.
In her CBS interview, Yellen said many Americans quit jobs in September over fears of COVID.
“I think part of it reflects concerns about COVID and exposure to COVID, especially in jobs that involve public-facing activities,” she said.
But that said, employers added more than 531,000 people to payrolls in October, lowering the national unemployment rate from 4.8 percent to 4.6 percent.
“The programs that were put in place, the American Rescue Plan and the CARES Act and other programs, really were intended to support households and families to get through this so that they didn’t take a huge hit to their income,” she said.
“So financially, Americans say they feel good about their finances, and that’s not an accident,” she added. “But spending is strong and the supply of workers is not back up to normal. Unemployment is low and labor force participation is quite depressed relative to pre-pandemic levels.”
“So as I say, when we really get control of the pandemic, I think labor supply will go back to normal. But yes, we have a tight labor market, not a loose labor market,” Yellen continued.
At the same time, trillions of federal dollars have gone into the economy, inflation has soared as shortages have emerged and supply chain chokepoints have worsened, all of which the Biden administration official blamed on the pandemic.
“I think it’s important to realize that the cause of this inflation is the pandemic. It shut- all but shut down our economy. It boosted unemployment to almost 15 percent and we’ve been opening up in fits and starts. And the pandemic is really responsible, in its impact for the inflation that we’re seeing,” she said.
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