Coronavirus Aid, Relief, and Economic Security Act (2020)

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    Republicans Push Biden to Divert Federal Aid for Infrastructure

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    Unexpected receipts, driven in part by taxes on high earners riding a hot stock market, have prompted Republicans to push the president to spend on infrastructure instead.WASHINGTON — From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents. More

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    Small Businesses Have Surged in Black Communities. Was It the Stimulus?

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    New research finds a big rise in new businesses despite the pandemic, particularly in predominantly Black neighborhoods.Over the last year, multiple stimulus measures from the federal government have helped families buy groceries, pay rent and build a financial cushion. This aid might have also helped start a new era of entrepreneurship.There has been a surge in start-ups in America that experts have yet to fully explain. But a new study — using data that allows researchers to more precisely track new businesses across time and place — finds that the surge coincides with federal stimulus, and is strongest in Black communities. More

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    How It Looks to Live in N.Y.C. During a Pandemic on $100 a Week

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    Ms. Galán’s home is small, but happy. Christopher, 11, Mia, 7, and Ian, 1, get along. The older children help keep the space tidy. The youngest has kept them giggling during the long year they’ve spent together indoors. Before the pandemic, Ms. Galán worked at a dry cleaner in the Bronx, earning about $350 per […] More

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    Amid Economic Turmoil, Biden Stays Focused on Longer Term

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    The president’s advisers are pushing their most detailed argument yet for the long-term benefits of a $4 trillion agenda to remake the American economy.WASHINGTON — President Biden and his economic team on Thursday made their most detailed case yet for trillions of dollars in new federal spending to rebuild public investment in workers, research and physical infrastructure, focusing on long-term ingredients of economic growth and equality as the current recovery from recession showed signs of distress.The president’s aides published what amounted to a deeper economic backbone for the argument that Mr. Biden is making publicly and privately to sell his plans to lawmakers, including the message he conveyed to a group of Republican senators he invited to the White House on Thursday to discuss an infrastructure package centered on roads, bridges, transit and broadband.That meeting ended with encouraging words from both sides. Republicans said Mr. Biden invited the senators, who had previously offered a nearly $570 billion, narrowly focused package, to return with an updated offer, including how to pay for new spending.Senator Shelley Moore Capito of West Virginia, who is leading the Republicans’ negotiations, said lawmakers would prepare an updated offer for the president to review by early next week, including a more detailed list of the kinds of projects they would be willing to fund and a set of proposals to cover the costs. The senators said they expected Mr. Biden would then respond with a counteroffer.“I made it clear that this was not a stagnant offer from us,” Ms. Capito said. “He made it clear that he is serious in wanting to pursue this.”She said Republican senators were open to raising the overall top-line price tag of their offer, which is a fraction of the new spending the president proposed. She also suggested that Republicans would be willing to cut a deal with Mr. Biden even if he decided to pursue a more progressive package, including priorities beyond traditional infrastructure, with only Democratic votes. Other senators predicted the sides would know by Memorial Day whether they could reach a deal.“It’s in nobody’s interest to draw this out beyond the time when you think it’s workable,” said Senator Roy Blunt, Republican of Missouri. “But I certainly left there thinking there’s a workable agreement to be had if we want to stretch a little both ways.”Shortly before the meeting, the White House Council of Economic Advisers posted a document to its website that cast Mr. Biden’s $4 trillion economic agenda as a way to correct decades of tax-cutting policies that had failed to bolster the middle class. In its place, the administration is pushing a rebuilding of public investment, like infrastructure, research and education, as the best way to fuel economic growth and improve families’ lives.The so-called issue brief reflects the administration’s longer-term thinking on economic policy when conservatives have ramped up criticism of the president over slowing job growth and accelerating inflation.Administration officials express confidence that recent price surges in used cars, airfare and other sectors of the economy will prove temporary, and that job growth will speed up again as more working-aged Americans are vaccinated against Covid-19 and regain access to child care during work hours. They say Mr. Biden’s $1.9 trillion economic aid package, which he signed in March, will lift job growth in the coming months, noting that new claims for unemployment fell to a pandemic-era low on Thursday.The officials also said it was appropriate for the president to look past the current crisis and push efforts to strengthen the economy long term.The two halves of Mr. Biden’s $4 trillion agenda, the American Jobs Plan and the American Families Plan, are premised on the economy returning to a low unemployment rate where essentially every American who wants to work is able to find a job, Cecilia Rouse, the chair of the Council of Economic Advisers, said in an interview.“The American Rescue Plan was rescue,” Dr. Rouse said. “It was meant as stimulus as we work through this hopefully once-in-a-century, if not longer, pandemic. The American Jobs Plan, American Families Plan are saying, look, that’s behind us, but we knew going into the pandemic that there were structural problems in our country and in our economy.”Mr. Biden’s plans would raise taxes on high earners and corporations to fund new federal spending on physical infrastructure, care for children and older Americans, expanded access to education, an accelerated transition to low-carbon energy and more.Those efforts “reflect the empirical evidence that a strong economy depends on a solid foundation of public investment, and that investments in workers, families and communities can pay off for decades to come,” Mr. Biden’s advisers wrote. “These plans are not emergency legislation; they address longstanding challenges.”The five-page brief focuses on arguments about what drives productivity, wage growth, innovation and equity in the economy. The issues predate the coronavirus recession and recovery, and Democrats in particular have pledged for years to address them.The brief begins by attacking the “old orthodoxy” of tax-cutting policies by presidents and Congress, including the 2017 tax cut passed by Republicans under President Donald J. Trump. A driving rationale behind that law was an effort to encourage more investment by private companies, bolstering what economists call the nation’s capital stock. The brief faults those policies for not producing the rapid gains in economic growth that champions of those policies promised, and it says that raising taxes on high earners “will help ensure that the gains from economic growth are more broadly shared.”Republicans continue to insist that tax cuts, particularly for businesses, are the key to economic competitiveness and middle-class prosperity. They have refused to negotiate any changes to their party’s signature 2017 tax law as part of an infrastructure agreement, even as they concede some need for a limited version of the new public investments Mr. Biden is calling for.Republicans used the meeting on Thursday to reiterate that they would be unwilling to raise corporate or personal taxes lowered by their 2017 law. Instead, they pitched the president on the use of zero-interest loans and public-private partnerships, in addition to existing gasoline taxes and other government savings.Mr. Biden would raise taxes to reverse what his economic team calls the federal government’s underinvestment in policies that help educate children and adults, facilitate the development of new technologies and industries and support parents so they are able to work and earn more. His team cites the wave of quickly developed coronavirus vaccines from Pfizer and Moderna, which grew out of publicly funded research, as an example of public investments yielding private-sector innovation.“Those started with ideas that were funded by the public sector decades ago,” Dr. Rouse said. “And then the private sector built on top of that, so it’s really, the private sector needs to work with the public sector. We are all very grateful that the public sector was willing to take that risk, and it didn’t pay off right away.”“In many ways, the federal government should be patient,” she said. “We are a kind of entity, we should be patient. So I’m not saying we have to wait a million years for something to pay off, but we don’t need to have the kind of immediate payoff that a private company might need to see.”That argument is in many ways a departure from how administrations typically pitch economic policies during a crisis. There is no focus in the brief on immediate job creation or a quick bump in economic growth.Weeks after Mr. Biden detailed both halves of his plan, the administration has offered no projections about the effects of his policies on jobs or growth. Instead, Dr. Rouse and other administration officials cited forecasts by the Moody’s Analytics economist Mark Zandi, which are among the more favorable outside analyses of the president’s agenda.Administration officials say there is no need for their economic team to produce such forecasts. Congressional Republicans have repeatedly called for the White House to produce an estimate of how many jobs would be created by Mr. Biden’s plans. More

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    As Trillions Flow Out the Door, Stimulus Oversight Faces Challenges

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    A sprawling system meant to police trillions of dollars is showing signs of strain as watchdogs warn of waste, fraud and abuse.WASHINGTON — Lawmakers have unleashed more than $5 trillion in relief aid over the past year to help businesses and individuals through the pandemic downturn. But the scale of that effort is placing serious strain on a patchwork oversight network created to ferret out waste and fraud. More

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    Automatic Aid for the People? How Jobless Benefits Can Fit the Economy.

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    The pandemic showed the flaws in the American approach to help the unemployed. Alternatives exist.The line outside an unemployment office in Fayetteville, Ark., last April.September Dawn Bottoms for The New York TimesFor years, people who study unemployment benefits have warned that the American system of jobless insurance was too antiquated and clunky to meet the needs of workers in a time of economic crisis.To understand what they were worried about, consider this bizarre timeline since the start of the pandemic:Last spring, when the economic shutdown caused millions to lose their jobs, many state systems were so clogged that people were unable to receive jobless benefits for weeks, sometimes longer.Congress concluded that it would be technologically impossible to calibrate extra benefits to replace every jobless person’s full income, so it took a blunter approach: Lawmakers tacked an extra $600 per week onto unemployment checks. The result, by one estimate, was that 76 percent of recipients made more than they earned when they were working.At the end of July, that $600 supplement expired, falling to zero. But the economy remained in dire condition with jobs nowhere to be found — leaving millions of jobless people in the lurch.Then, early this year, $300 per week was tacked on. It is set to stay there until September, even as Americans are vaccinated on a mass scale and as the economy starts to roar ahead.So while unemployment insurance has fulfilled a vital role of keeping families afloat financially — and preventing overall demand for goods and services from collapsing — the stop-and-start cash sequence has been reflective of neither individual recipients’ lost income nor the state of the labor market.This has been partly the result of U.S. policymakers’ rejection of ideas that many labor market experts support, and that some advanced nations have adopted to varying degrees. These economists have called for investing more in the technological and customer service infrastructure of state unemployment systems, and presetting benefits based on economic conditions. Benefits would adjust automatically to the level of need, thus helping people who are struggling and stabilizing the overall economy without Congress having to do much of anything.“There are a lot of flaws and gaps in the unemployment insurance system that were revealed in Covid but have always been there,” said Chloe East, an economist at the University of Colorado Denver who has studied the system.Such proposals have typically come from left-of-center policy experts. But now, as the economy starts to recover, there’s a twist. In the potential boom-time summer to come, these automatic triggers would probably fulfill conservative policy goals — ensuring that benefits are reduced as the economy recovers, thus increasing incentives to return to work.In some areas, employers are struggling to attract workers.  A roadside banner beckons potential employees outside Channel Control Merchants in Hattiesburg, Miss.Rogelio V. Solis/Associated PressBusinesses around the country are complaining of difficulty finding people to hire. Many employers blame generous unemployment insurance payments that may give some would-be workers incentive to stay home.Some recipients still earn more on unemployment than they do when they’re working, thanks to the $300 supplement. And under current law, those benefits will remain in place until Sept. 6 no matter how much the economy might boom or how abundant jobs turn out to be.In a proposed sweeping overhaul of the system published this month by Arindrajit Dube of the University of Massachusetts Amherst, the duration of jobless benefits would vary based on the unemployment rate. States with a jobless rate under 5 percent would extend benefits for 26 weeks, and those with 10 percent unemployment for 98 weeks. He would also raise benefits by $100 a week when the jobless rate was above 6 percent, and by $200 when it was above 8 percent.Some lawmakers are thinking similarly. Two Democrats, Senators Ron Wyden of Oregon and Michael Bennet of Colorado, proposed legislation this month that would, among many other things, extend benefits when the unemployment rate is at or above 5.5 percent.Similar proposals have failed to advance for a range of reasons. For one, the plans appear expensive in the conventions of budget math. The current practice is to extend benefits in a bill, or a series of them, if the need arises. That appears less expensive than building in money in advance for jobless benefits and automatic triggers based on the economy.Now consider the partisanship that can come into play in limiting the size of recession aid packages. If lawmakers agree to spend only $900 billion on economic help, for example, it’s a disadvantage if some of that is devoted to a theoretical estimate of what jobless benefits might be years in the future.Moreover, lawmakers may like the appearance that they are leaping to citizens’ aid in a crisis or recession — which would be less visible if the aid were increased automatically.In times of economic crisis, like last year, Democrats and Republicans have been able to agree on these policies. But if they were to try to devise a system from scratch, they might turn out to be quite far apart on how generous jobless benefits should be.“I think everyone can agree the optimal system would be calibrated to the economy, but the devil is so much in the details,” said Marc Goldwein, policy director of the Committee for a Responsible Federal Budget. “I suspect the parties are much farther apart on what a permanent trigger should look like than what we should do in the next six months.”Still, the current moment shows there could be harmony between at least some fiscal conservatives and pro-business interests and those on the left who would like to see more expansive benefits.“Even people who would like to see pandemic unemployment insurance gone by now would have wanted people last May and June to be getting checks when millions of people weren’t getting them because the systems couldn’t function,” said Jay Shambaugh, an economist at George Washington University. “One way or another, the system we have now didn’t provide money along the optimal path.”The flip side of a system that can get money out quickly is that it can also be fine-tuned to make sure benefits go away when circumstances justify it. 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    Federal Aid to Renters Moves Slowly, Leaving Many at Risk

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    Congress allocated $25 billion in December and another $21 billion in March to help people who fell behind on rent during the pandemic. Little has reached landlords or tenants.WASHINGTON — Four months after Congress approved tens of billions of dollars in emergency rental aid, only a small portion has reached landlords and tenants, and in many places it is impossible even to file an application.The program requires hundreds of state and local governments to devise and carry out their own plans, and some have been slow to begin. But the pace is hindered mostly by the sheer complexity of the task: starting a huge pop-up program that reaches millions of tenants, verifies their debts and wins over landlords whose interests are not always the same as their renters’.The money at stake is vast. Congress approved $25 billion in December and added more than $20 billion in March. The sum the federal government now has for emergency rental aid, $46.5 billion, rivals the annual budget of the Department of Housing and Urban Development.Experts say careful preparation may improve results; it takes time to find the neediest tenants and ensure payment accuracy. But with 1 in 7 renters reporting that they are behind on payments, the longer it takes to distribute the money, the more landlords suffer destabilizing losses, and tenants risk eviction.Millions of tenants are protected from eviction only by a tenuous federal moratorium that faces multiple court challenges, omits many households and is scheduled to expire in June.“I’m impressed with the amount of work that unsung public servants are doing to set up these programs, but it is problematic that more money isn’t getting out the door,” said Ingrid Gould Ellen, a professor at New York University who is studying the effort. “There are downstream effects if small landlords can’t keep up their buildings, and you want to reach families when they first hit a crisis so their problems don’t compound.”Estimates of unpaid rents vary greatly, from $8 billion to $53 billion, with the sums that Congress has approved at the high end of the range.The situation illustrates the patchwork nature of the American safety net. Food, cash, health care and other types of aid flow through separate programs. Each has its own mix of federal, state and local control, leading to great geographic variation.While some pandemic aid has flowed through established programs, the rental help is both decentralized and new, making the variation especially pronounced.While Charleston has started a local rent assistance program, South Carolina has $272 million to spend and has not begun taking applications.Cameron Pollack for The New York TimesAmong those seeking help is Saundra Broughton, 48, a logistics worker outside Charleston, S.C., who considered herself safely middle class in the fall, when she rented an apartment with a fitness center and saltwater pool. To her shock, she was soon laid off; after her jobless benefits were delayed, she received an eviction notice.“I’ve always worked and taken care of myself,” she said. “I’ve never been on public assistance.”A judge gave Ms. Broughton 10 days to leave her apartment. Only a last-minute call to legal aid brought word of the federal moratorium, which requires tenants to apply. She rushed to the library to print the form with 24 hours to spare. “But I still owe the money,” she said, about $4,600 and counting.If Ms. Broughton lived in nearby Berkeley County, she could have sought help as early as March 29. In Charleston County, a few miles away, she could have applied on April 12. But as a resident of Dorchester County, she must apply through the state, which has $272 million in federal money but is not yet taking applications.“Why are they holding the money?” she said. “I have thousands of dollars of debt and could be kicked out at any moment. It’s a very frightening feeling.”The huge aid measures passed during the early stages of the pandemic did not include specific provisions to help renters, though they did give most households cash. But hundreds of state and local governments started programs with discretionary money from the CARES Act, passed in March 2020. These efforts disbursed $4.5 billion in what amounted to a practice run for the effort now underway with 10 times the money.Lessons cited include the need to reach out to the poorest tenants to let them know aid is available. Technology often posed barriers: Renters had to apply online, and many lacked computers or internet access.The demand for documentation also thwarted aid, as many people without proof of leases or lost income could not finish applications. Some landlords declined to participate, perhaps preferring to seek new tenants.Despite rising need, programs in Florida and New York, financed by the CARES Act, returned tens of millions of unspent dollars to the states. By the time Congress passed the new program in December, nearly 1 renter household in 5 reported being behind on payments.The national effort, the Emergency Rental Assistance Program, is run by the Treasury Department. It allocates money to states and also to cities and counties with populations of at least 200,000 that want to run their own programs. About 110 cities and 227 counties have chosen to do so.The program offers up to 12 months of rent and utilities to low-income tenants economically harmed by the pandemic, with priority on households with less than half the area’s median income — typically about $34,000 a year. Federal law does not deny the aid to undocumented immigrants, though a few states and counties do.Modern assistance seems to demand a mix of Jacob Riis and Bill Gates — outreach to the marginalized and help with software. Progress slowed for a month when the Biden administration canceled guidance issued under President Donald J. Trump and developed rules that require less documentation.Other reasons for slow starts vary. Progressive state legislators in New York spent months debating the best way to protect the neediest tenants. Conservatives legislators in South Carolina were less focused on the issue. But the result was largely the same: Neither legislature passed its program until April, and neither state is yet accepting applications.“I just don’t know why there hasn’t been more of a sense of urgency,” said Sue Berkowitz, the director of the South Carolina Appleseed Legal Justice Center. “We’ve been hearing nonstop from people worried about eviction.”There is no complete data on how many tenants have been helped. But of the $17.6 billion awarded to state governments, 20 percent is going to states not yet taking applications, though some local programs in those states are. Florida (which has $871 million), Illinois ($566 million) and North Carolina ($547 million) are among those that have yet to start.“The pace is slow,” said Greg Brown of the National Apartment Association, who emphasized that landlords have mortgages, taxes and maintenance to pay.In a recent talk at the Brookings Institution, Erika Poethig, a housing expert on the White House Domestic Policy Council, praised the “unprecedented amount of rental assistance” and said “the federal government only has so much ability” to encourage faster action.Accepting applications is only the beginning. With $1.5 billion to spend, California has attracted 150,000 requests for help. But of the $355 million requested, only $20 million has been approved and $1 million paid.Texas, with $1.3 billion to spend, started quickly, but the company it hired to run the program had software failures and staffing shortages. A committee in the state House of Representatives found that after 45 days, the program had paid just 250 households.By contrast, a program jointly run by the city of Houston and Harris County had spent about a quarter of its money and assisted nearly 10,000 households.Not everyone is troubled by the pace. “Getting the money out fast isn’t necessarily the goal here, especially when we focus on making sure the money reaches the most vulnerable people,” said Diane Yentel, the director of the National Low Income Housing Coalition.Given the challenge, she said, “I think it’s going OK.”She points toward a program in Santa Clara County, Calif., that won praise for its outreach last year. Many of the people it served spoke little English or lacked formal leases to submit. Now, with $36 million to spend under the new program, it opted for weeks of additional planning to train 50 nonprofit groups to find the poorest households“Giving away money is actually quite hard,” said Jen Loving, who runs Destination: Home, a housing group leading the campaign. “All the money in the world isn’t going matter if it doesn’t get to the people who need it.”In Charleston, S.C., housing became a subject of concern after a 2018 study found the area had the country’s highest eviction rate. Charleston County ran three rounds of rental relief with CARES Act money, and the state ran two.The second state program, started with $25 million in February, drew so many applications that it closed in six days. But South Carolina is still processing those requests as it decides how to distribute the new federal funds.Antonette Worke is among the applicants awaiting an answer. She moved to Charleston from Denver last year, drawn by cheaper rents, warmer weather and a job offer. But the job fell through, and her landlord filed for eviction.Ms. Worke, who has kidney and liver disease, is temporarily protected by the federal eviction moratorium. But it does not cover tenants whose leases expire, as hers will at the end of next month. Her landlord said he would force her to move, even if the state paid the $5,000 in overdue rent.Ms. Worke is temporarily protected by a federal moratorium on evictions, but her lease is set to expire at the end of the month.Nora Williams for The New York TimesStill, she said the help was important: A clean slate would make it easier to rent a new apartment and relieve her of an impossible debt. “I’m stressing over it to the point where I’ve made myself sicker,” she said.Moving faster than the state, Charleston County started its $12 million program two weeks ago, and workers have taken computers to farmers’ markets, community centers and a mall parking lot. Christine DuRant, a deputy county administrator, said the aid was needed to prevent foreclosures that could reduce the housing stock. But critics would pounce if the program sent payments to people who do not qualify, she said: “We will be audited,” possibly three times.Latoya Green is caught where the desire for speed and accounting collide. A clerk who lost hours in the pandemic, she owes $3,700 in rent and utilities and is protected by the eviction moratorium only until her lease expires next month.She applied for help on the day the county program started but has not completed the application. She said she is unsettled by the emails requesting her lease, which she lacks, and proof of lost income.Still, Ms. Green does not criticize Charleston County officials. “I think they’re trying their best,” she said. “A lot of people run scams.”With time running short, she added: “I just hope and pray to God they’ll be able to assist me.” More

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    Unemployment Is High. Why Are Businesses Struggling to Hire?

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    Health concerns, expanded jobless benefits and still being needed at home are among the reasons would-be workers might be staying away.A BevMo store in Larkspur, Calif., early this month.Justin Sullivan/Getty ImagesThere are two distinct, and completely opposite, ways of looking at the American job market.One would be to consult the data tables produced every month by the Bureau of Labor Statistics, which suggest a plentiful supply of would-be workers. The unemployment rate is 6 percent, representing 9.7 million Americans who say they are actively looking for work.Alternately, you could search for news articles mentioning “labor shortage.” You will find dozens in which businesses, especially in the restaurant and other service industries, say they face a potentially catastrophic inability to hire. The anecdotes come from the biggest metropolitan areas and from small towns, as well as from tourist destinations of all varieties.If this apparent labor shortage persists, it will have huge implications for the economy in 2021 and beyond. It could act as a brake on growth and cause unnecessary business failures, long lines at remaining businesses, and rising prices.What explains the disconnect? There are competing theories, all plausible — and potentially interrelated. Meanwhile, the economic and public health situation is evolving too quickly for research to keep up. So consider this a guide to these potential explanations, and an accounting of the evidence for each.Benefits too generous?“The government is making it easy for people to stay home and get paid. You can’t really blame them much. But it means we have hours to fill and no one who wants to work.” — Tom Taylor, owner of Sammy Malone’s pub in Baldwinsville, N.Y., quoted in The Syracuse Post-Standard.Business leaders have been quick to blame expanded unemployment insurance and pandemic stimulus payments for the labor shortages.The logic is simple: Why work when unemployment insurance — including a $300 weekly supplement that was part of the newly enacted pandemic rescue plan — means that some people can make as much or more by not working? And the combined $2,000-per-person cash payments enacted since late last year created a cushion people can rely on for a time.Ample economic research shows that more generous unemployment benefits are a disincentive for people to seek or accept work. But several studies on what happened when a $600 weekly supplement was added to benefits last spring suggested that the early pandemic had unique dynamics.Research by Ioana Marinescu, Daphné Skandalis and Daniel Zhao, for example, found that every 10 percent increase in the jobless benefits a person received corresponded to a 3 percent decline in the number of jobs applied to. But in the context of mass closings of businesses, that didn’t matter for how many people were employed — there were still far more job seekers than jobs.By contrast, “right now what seems to be happening is that job creation is outpacing the search effort that workers are putting forth,” said Professor Marinescu, an economist at the University of Pennsylvania. “Compared to how people reacted last spring, it’s not that long ago, but the situation has changed a bit.”That is to say, a similar decline in workers’ desire to pursue jobs matters more when there are plenty of jobs to go around, which is increasingly the case as the economy reopens.In other research on the expanded jobless benefits, Peter Ganong of the University of Chicago Harris School and five co-authors found a smaller decrease in the inclination to search for jobs than earlier research would have predicted. In other words, those $600 weekly supplements didn’t decrease employment very much.But those were circumstances that may no longer apply.“The goal of government should be to get everyone back to work as soon as possible while continuing to provide economic support to workers who have not gone back to work yet,” Mr. Ganong said. “Those two things were not in tension in 2020, and they are in tension in 2021. All of those things that made 2020 special are receding, so we now face a more traditional set of trade-offs.”Arindrajit Dube, an economist at the University of Massachusetts Amherst who has also studied the impact of last year’s expanded benefits, is skeptical that the lure of jobless benefits is the primary explanation. He notes that even with the reported shortages, businesses appear to be successfully hiring at a breakneck pace.Companies added 916,000 employees to payrolls in March alone, a number matched only by the initial rebound from pandemic shutdowns last summer and in the immediate aftermath of World War II. Moreover, the expanded benefits are scheduled to expire in September.“Maybe an unemployed person spends several additional days unemployed because of the $300,” Professor Dube said. “But if it’s a problem, it takes care of itself. It’s nothing compared to the broader trajectory of the reopening, which swamps anything on the unemployment insurance front.”Which brings us to other factors that may be keeping would-be workers away from the job market, especially in the service sector.Worried about getting sick“We’ve been taking lockdown pretty seriously. My wife and son have some autoimmune conditions. I didn’t want to put my family in a position where I’d be working in a very public-facing job and potentially bringing something home.” — Paul Hofford, former bartender at A Rake’s Progress in Washington. Quoted in Washington City Paper.Nobody wants to get a potentially deadly disease for a job slinging eggs Benedict. And more so than many other occupations, restaurants and other parts of the service sector require face-to-face contact with the public.One piece of evidence supporting this idea: There appears to be a relationship between vaccinations of people and a rise in their employment rate.Aaron Sojourner, a University of Minnesota economist, used the Census Bureau’s Household Pulse Survey to explore that relationship among 3,600 finely grained groupings of Americans by demographics and geography.A 10-percentage-point increase in the share of people fully vaccinated corresponded with a 1.1-percentage-point increase in their employment. There are many ways to interpret the finding — it doesn’t tell us anything about causation — but one possibility is that vaccinated people are more comfortable taking jobs.“The first-order issue is the virus, and if that’s what caused the crisis, then it is also the path out of the crisis,” Professor Sojourner said. “Crushing the virus is the solution to both the supply problem and the demand problem.”Health concerns and the expanded jobless benefits can operate hand in hand. It’s easier for a person nervous about the virus to stay out of the work force when benefits are more generous.Still needed at home“Lot of kids are still at home doing school so, depending on age, they’ve got to have a parent there, somebody who would have been in the work force. We need them back and we need them back in force.” — Stacy Roof, president of the Kentucky Restaurant Association, quoted in The Lexington Herald-Leader.Someone has to oversee the school-age children stuck at home taking classes. The same goes for older or disabled relatives who might have had other forms of care before the pandemic.The Census Household Pulse survey shows that this remains a major reason for adults not to be working. Based on surveys taken in late March, 6.3 million people were not working because of a need to care for a child not in a school or day care center, and a further 2.1 million were caring for an older person. Combined, those numbers amount to nearly 14 percent of the adults not working for reasons other than being retired.What’s more, those numbers have actually gone up since the start of the year — an additional 850,000 people.That speaks to the interrelated challenges of reopening the economy. Many businesses may be opening and seeing a surge of demand, but so long as schools, day care centers and elder care are still limited, there will be constraint in their ability to get workers.“As we move toward herd immunity, those issues around care infrastructure will get better,” said Heidi Shierholz, an economist at the Economic Policy Institute. “These structural things related to public health, we may not know the magnitude of how many people they’re keeping out of the labor force, but with the vaccine we can come at this with optimism that it will improve.”Show me the money“If you can swing a hammer, you can go make $25 an hour.” — Brandt Casey, manager of Cafe Olé in Meridian, Idaho, quoted in The Idaho Statesman.The simple, Economics 101 answer to what a company should do when it has trouble recruiting enough workers is to pay them more. That is the logic that underpins the economic policy of the Biden administration and the Federal Reserve: Achieving a tight labor market will result in higher pay for workers.But the restaurant industry faces a particular challenge. The sectors that have thrived during the pandemic have been on hiring binges, often paying higher wages than restaurants do. Amazon alone added 500,000 employees in 2020, with a wage floor of $15 an hour. Companies like Walmart, Target and home-improvement and grocery chains have all been hiring aggressively with wages at or not far behind those levels.And as Mr. Casey suggested, those with some in-demand skills — whether in construction or commercial truck driving — can do even better. Knight-Swift Transportation Holdings has raised its wages for newly certified drivers by 40 percent, to the point they can average $60,000 salaries.That puts restaurants in a tough spot competitively. According to federal data, the median cook or food preparation worker made $13.02 an hour in May 2020, and dishwashers $12.15.For tipped workers like waiters and bartenders, the pandemic has made potential earnings more erratic. In an era of outdoor dining, a rainy day can mean a drastic loss of income.It’s easy to see how restaurant workers might be exploring other options. Restaurants, with thin profit margins in the best of times, have had their finances walloped by a year of stop-and-start pandemic closures.“When certain sectors have disadvantages like not enough tipped earnings or worries about the pandemic, you would expect reduced labor supply to those sectors and greater labor supply to other sectors that have experienced increased demand, like logistics,” Mr. Dube said.Reconsidering career decisions?“This reprieve has given for a lot of people a chance to contemplate their lives, where they’re going and where they want to be, and for the industry to take a look at itself.” — Lisa Schroeder, owner of Mother’s Bistro in Portland, Ore., quoted in The Counter.Has the pandemic spurred many people to re-evaluate their lives, their careers and what they care about most?Many people who have long done hard, physically demanding work — with odd hours and modest pay — might second-guess those choices when faced with a year of crisis. In industries that had their economic underpinnings severed last March virtually overnight, there was a particular lesson in the inherent instability of the modern economy and what really matters.Could this be a meaningful cause of the food service sector’s labor shortage? It’s not the type of question that can be answered with solid data. But it is one that hangs over all sorts of businesses as the great reopening begins. More