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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

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    Signs of Economic Hope Are Growing, Some With Superlatives

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    Soaring retail sales and a sharp drop in jobless claims are the latest reflection of a quickening recovery and suggest a year of remarkable growth.The American economic recovery is gathering steam, renewing confidence that a vibrant revival awaits as the pandemic recedes.After months of false starts, evidence is mounting that the economy has definitively turned a corner, with more growth on the horizon. Job gains last month were the strongest since August. There are signs that the snarled global supply chain may be untangling.And in dual reports on Thursday, the government reported more good news: Retail sales in March blew past expectations, rising nearly 10 percent, and jobless claims last week fell to their lowest level of the pandemic.Even as the country is still straining to contain the virus, as millions of people remain unemployed and as a large portion of the population remains unvaccinated, the data suggests that the long-heralded economic rebound is within reach.“I’m feeling quite optimistic,” said Gregory Daco, chief U.S. economist at Oxford Economics. “I think what we’re seeing is evidence of this booming economy that we’re going to be seeing over the coming months.”In the year since the coronavirus smothered the economy, economists have held out hope for a significant turnaround defined by plentiful job opportunities, higher wages and supercharged spending after months of pent-up demand. But the tantalizing promise at times appeared unlikely at best: After a period of growth over the summer, job gains largely stalled heading into the new year. New state unemployment claims spiked to over a million in one week in January. Retail sales, bolstered by stimulus payments, jumped in January only to slide the next month.Monthly Retail Sales

    Seasonally adjusted advance monthly sales for retail and food services.Source: Commerce DepartmentThe New York TimesYet recent weeks have delivered increasing reason for hope. With a fresh round of federal payments in their pockets and vaccines in their arms, many Americans have begun shopping and dining out with renewed alacrity, driving retail sales. A 9.8 percent increase last month was a strong comeback from the nearly 3 percent drop in February, when previous stimulus money had dissipated and a series of winter storms made travel difficult across much of the United States.The increase was broad-based, including big-ticket purchases like cars and discretionary spending on sporting goods, which economists interpreted as a sign of strong household income and growing optimism. Sales of clothing and accessories rose 18 percent, while restaurants and bars recorded a 13 percent increase — demonstrating how many areas of consumption are bouncing back.“I found it very encouraging that there are signs that people are waking up from hibernation, buying new clothes and going out to restaurants,” said Beth Ann Bovino, U.S. chief economist at S&P Global. “I think people are feeling optimistic that the United States will win the war on the virus. And they have good reason to be hopeful.”Many economists said the strong retail sales were likely to continue through the spring, even after the new stimulus payments are used up.The gradual return to normal activities as business restrictions ease has in turn prompted employers to recall workers — and this time, to hold on to them.The Labor Department reported on Thursday that the number of first-time claims for state unemployment benefits fell sharply last week, to about 613,000, the lowest level since the start of the pandemic. That was a decline of 153,000, the largest week-over-week decrease since the summer.In addition, 132,000 new claims were filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 20,000 from the previous week.“We’re gaining momentum here, which is just unquestionable,” said Diane Swonk, chief economist at the accounting firm Grant Thornton.There are also broader signs of a comeback.After a devastating year, airlines are growing increasingly hopeful as travelers return. Over the past month, more than one million people were screened each day at federal airport checkpoints, according to the Transportation Security Administration, a signal that a sustained travel recovery is underway.As a result, American Airlines said this week that it expected to sell more than 90 percent as many tickets within the United States this summer as it did in the summer of 2019. Delta Air Lines said Thursday that it had recovered about 85 percent of its domestic leisure sales. If trends hold, the airline said, it could be profitable again by the summer.“A year after the onset of the pandemic, travelers are gaining confidence and beginning to reclaim their lives,” Ed Bastian, the company’s chief executive, said in announcing the airline’s first-quarter financial results. “Delta is accelerating into the recovery.”Moreover, the nation’s ports are handling record cargo volumes as consumers stock up. March was the busiest month on record for the Port of Oakland, while the Port of Los Angeles, the main point of entry for goods from Asia, said the first three months of the year were the busiest first quarter in its 114-year history.“As more Americans get vaccinated, businesses reopen and the economy strengthens, consumers continue to purchase goods at a dizzying pace,” Gene Seroka, the port’s executive director, said in a statement.For months, the port, like others around the world, has been overwhelmed by an influx of cargo, forcing container ships to wait days offshore to unload their goods. In many cases, the containers are unloaded and immediately sent back so they can be filled for another eastbound trip. While the backlog remains, Mr. Seroka said, it is expected to be eliminated in the coming months.The Port of Los Angeles, the main point of entry for goods from Asia, said the first three months of this year were the busiest first quarter in its 114-year history.Coley Brown for The New York TimesThe improving signs on so many fronts are being reflected in brightening forecasts for the months ahead. Morgan Stanley said Thursday that it expected the economy to grow 7.5 percent in 2021, after shrinking 3.5 percent in 2020. That would be the strongest growth rate for a calendar year since the 1950s.But if the economy appears to be on the upswing, the recovery is still fragile. Weekly applications for unemployment claims have remained stubbornly high for months, causing frustration even as businesses reopen and vaccination rates increase. They have also been a volatile economic indicator, temporarily dipping to their lowest level of the pandemic in mid-March before rising again in recent weeks.“You’re still not popping champagne corks,” Ms. Swonk said. “I will breathe again — and breathe easy again — once we get these numbers back down in the 200,000 range.”What’s more, concerns about workplace safety persist, especially for younger workers who have just become eligible for vaccinations. Many children are still attending schools remotely, complicating the full-time work prospects for their caregivers.Jobless claims for the next few months could remain significantly elevated as the labor market adjusts to a new normal.“The job market conditions for job seekers have really improved extremely quickly between January and now,” said Julia Pollak, a labor economist at the job site ZipRecruiter. “But there are still huge barriers to returning to work.”The rebound in March sales also shows how consumer spending — and the economic rebound as a whole — remains highly dependent on government support.President Biden’s $1.9 trillion American Rescue Plan, which was signed into law last month, provides $1,400-a-person payments to most households. The payments began arriving around March 17, and by the end of the month, economists saw signs that spending was ramping up again, such as increased hotel occupancy and travel through airports.Economists at Morgan Stanley had predicted that core retail sales would jump 6.5 percent in March, driven by the payments. The investment bank said only 30 percent of consumers tended to spend their payments within 10 days, suggesting that many have money on hand that could strengthen April sales as well.Other factors are contributing to the brightening recovery prospects. Mr. Biden moved up the deadline for states to make all adults eligible for vaccination to April 19, and every state has complied, laying the groundwork for more people to rejoin the work force. Students who have been learning remotely are increasingly returning to the classroom, a shift that will especially benefit women, who have been disproportionately sidelined during the pandemic by caregiving duties.Echoing the general perception that post-pandemic life is beckoning, American consumers are feeling increasingly upbeat. One measure of sentiment, tabulated by the Conference Board, showed that consumer confidence in March recorded its biggest one-month gain in nearly a decade, fueled by increased income and stronger business and employment expectations.“This was the deepest, swiftest recession ever,” said Ms. Pollak, the ZipRecruiter economist. “But it’s also turning into the fastest recovery.”Ben Casselman contributed reporting. More

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    China's First Quarter Growth is Expected to Boom on Paper

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    The world’s traditional growth engine is expected to report a double-digit first-quarter jump. But consumers and small business aren’t fully sharing in the spoils.Factories are whirring, new apartments are being snapped up, and more jobs are up for grabs. When China releases its new economic figures on Friday, they are expected to show a remarkable postpandemic surge.The question is whether small businesses and Chinese consumers can fully share in the good times.China is expected to report that its economy grew by a jaw-dropping double-digit figure in the first three months of the year compared with the same period last year. Economists widely estimate the number to be 18 percent to 19 percent. But the growth is as much a reflection of the past — the country’s output shrank 6.8 percent in the first quarter of 2020 from a year earlier — as it is an indication of how China is doing now.A year ago, entire cities were shut down, planes were grounded and highways were blocked to control the spread of a relentless virus. Today, global demand for computer screens and video consoles that China makes is soaring as people work from home and as a pandemic recovery beckons. That demand has continued as Americans with stimulus checks look to spend money on patio furniture, electronics and other goods made in Chinese factories.China’s recovery has also been powered by big infrastructure. Cranes dot city skylines. Construction projects for highways and railroads have provided short-term jobs. Property sales have also helped strengthen economic activity.The port container terminal in Lianyungang, a city in China’s Jiangsu Province. Global demand for Chinese goods is soaring.Hector Retamal/Agence France-Presse — Getty ImagesBut exports and property investment can carry China’s growth only so far. Now China is trying to get its consumers to return to their prepandemic ways, something that other countries will soon have to grapple with as more vaccines become available.Demand for Chinese exports is expected to weaken later in the year. Policymakers have moved to tamp down overheating in the property market and in the corporate sector, where many firms have borrowed beyond their means. Many economists are looking for signs of a broader recovery that relies less on exports and the government and more on Chinese consumers to juice growth.A slow vaccination rollout and fresh memories of lockdowns have left many consumers in the country skittish. Restaurants are still struggling to bounce back. Waiters, shopkeepers and students are not ready yet for the “revenge spending” that economists hope will power growth. When virus outbreaks occur, the Chinese authorities are quick to put new lockdowns in place, hurting small businesses and their customers.To avoid a wave of outbreaks in February, the authorities canceled the travel plans of millions of migrant workers for the Lunar New Year holiday, the biggest holiday in China.“China’s Covid strategy has been to crush it when it reappears, but there seems to be a lot of voluntary social distancing, and that’s affecting services,” said Shaun Roache, chief economist for Asia Pacific at S&P Global. “It’s holding back normalization.”A worker producing engineering equipment for export at a factory in Nantong in Jiangsu Province. Demand for Chinese exports is expected to weaken later in the year. Agence France-Presse — Getty ImagesWu Zhen runs a family business of 13 restaurants and dozens of banquet halls in Yingtan, a city in China’s southeastern Jiangxi Province. When China began to bounce back last year, more people started going to her restaurants for their favorite dishes, like braised pork. But just as she and her employees began preparing for the Lunar New Year, a new Covid-19 outbreak prompted the authorities to limit the number of people allowed to gather in one place to 50.“It should have been the best time of the year for our business,” said Ms. Wu, 33.This year, Ms. Wu decided that closing the entire business over the holiday would be cheaper. “If we want to serve Lunar New Year’s Eve dinner, the labor wage for one day is three times higher than the usual time. We save more money by just closing the doors and the business,” she said. It will be the second year in a row that the restaurants shut their doors over the holiday.Ms. Wu inherited the business from her father two years ago and employs more than 800 people. Before the pandemic, three-quarters of the business revenue came from big banquets for weddings and family reunions. She said business had yet to return to normal after months of crushing virus restrictions.The setbacks facing small-business owners like Ms. Wu are also affecting regular consumers who are jittery about opening their wallets. According to Zhaopin, China’s biggest job recruitment platform, more jobs in hotels and restaurants, entertainment services and real estate are available than a year ago. But households are still being cautious about spending.Families continue to save at a higher rate than they did before the pandemic, something that worries economists like Louis Kuijs, who is head of Asian economics at Oxford Economics. Mr. Kuijs is looking at household savings as an indication of whether Chinese consumers are ready to start splurging after months of being stuck at home.“More people still seem to not go all the way in terms of carefree spending,” he said. “At times there are still some lingering Covid concerns, but there is perhaps also a concern about the general economic situation.”Many families took on more debt last year to buy property and cover expenses during the pandemic. China still largely lacks the kind of social safety net that many wealthy countries provide, and some families have to dip into savings for health care and other big costs.Unlike much of the developed world, China doesn’t subsidize its consumers. Instead of handing out checks to jump-start the economy last year, China ordered state-owned banks to lend to businesses and offered tax rebates.Retail figures on Friday will give a better sense of where consumers are picking up their old spending habits. But data from the first two months of the year already show that consumers like Li Jinqiu are spending less and saving more.Mr. Li, 25, who recently got married, has a 1-month-old baby at home. He had planned to work for the family business, but it has been hit by the pandemic and he doesn’t think there is much opportunity for him if he stays.“The whole family has some sense of crisis,” Mr. Li said. “Because of the pandemic and because of family business, I have a sense of crisis.”Mr. Li said he had received a job offer in sales at a financial firm in Beijing but had delayed the start date to help take care of his newborn. He said he had once borrowed to spend on items like his $150,000 Mercedes. Now he drives a $46,000 electric car and has put off buying new clothes.“When I spend,” he said, “I am more cautious.” More

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    Biden Takes On Sagging Safety Net With Plan to Fix Long-Term Care

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    The proposal to spend $400 billion over eight years faces political challenges and a funding system not designed for the burden it has come to bear.President Biden’s $400 billion proposal to improve long-term care for older adults and those with disabilities was received as either a long overdue expansion of the social safety net or an example of misguided government overreach.Republicans ridiculed including elder care in a program dedicated to infrastructure. Others derided it as a gift to the Service Employees International Union, which wants to organize care workers. It was also faulted for omitting child care.For Ai-jen Poo, co-director of Caring Across Generations, a coalition of advocacy groups working to strengthen the long-term care system, it was an answer to years of hard work.“Even though I have been fighting for this for years,” she said, “if you would have told me 10 years ago that the president of the United States would make a speech committing $400 billion to increase access to these services and strengthen this work force, I wouldn’t have believed it would happen.”What the debate over the president’s proposal has missed is that despite the big number, its ambitions remain singularly narrow when compared with the vast and growing demands imposed by an aging population.Mr. Biden’s proposal, part of his $2 trillion American Jobs Plan, is aimed only at bolstering Medicaid, which pays for somewhat over half the bill for long-term care in the country. And it is targeted only at home care and at community-based care in places like adult day care centers — not at nursing homes, which take just over 40 percent of Medicaid’s care budget.Still, the money would be consumed very fast.Consider a key goal: increasing the wages of care workers. In 2019, the typical wage of the 3.5 million home health aides and personal care aides was $12.15 an hour. They make less than janitors and telemarketers, less than workers in food processing plants or on farms. Many — typically women of color, often immigrants — live in poverty.The aides are employed by care agencies, which bill Medicaid for their hours at work in beneficiaries’ homes. The agencies consistently report labor shortages, which is perhaps unsurprising given the low pay.Raising wages may be essential to meet the booming demand. The Labor Department estimates that these occupations will require 1.6 million additional workers over 10 years.It won’t be cheap, though. Bringing aides’ hourly pay to $20 — still short of the country’s median wage — would more than consume the eight-year outlay of $400 billion. That would leave little money for other priorities, like addressing the demand for care — 820,000 people were on states’ waiting lists in 2018, with an average wait of more than three years — or providing more comprehensive services.The battle over resources is likely to strain the coalition of unions and groups that promote the interests of older and disabled Americans, which have been pushing together for Mr. Biden’s plan. And that’s even before nursing homes complain about being left out.The president “must figure out the right balance between reducing the waiting list and increasing wages,” said Paul Osterman, a professor at the Massachusetts Institute of Technology’s Sloan School of Management who has written about the nation’s care structures. “There’s tension there.”Elder care has long been at the center of political battles over social insurance. President Lyndon B. Johnson considered providing the benefit as part of the creation of Medicare in the 1960s, said Howard Gleckman, an expert on long-term care at the Urban Institute. But the chairman of the House Ways and Means Committee, Wilbur Mills, warned how expensive that approach would become when baby boomers started retiring. Better, he argued, to make it part of Medicaid and let the states bear a large chunk of the burden.This compromise produced a patchwork of services that has left millions of seniors and their families in the lurch while still consuming roughly a third of Medicaid spending — about $197 billion in 2018, according to the Kaiser Family Foundation. By Kaiser’s calculations, Medicaid pays for roughly half of long-term care services; out-of-pocket payments and private insurance together pay a little over a quarter of the tab. (Other sources, like programs for veterans, cover the rest.)Unlike institutional care, which state Medicaid programs are required to cover, home and community-based care services are optional. That explains the waiting lists. It also means there is a wide divergence in the quality of services and the rules governing who gets them.Although the federal government pays at least half of states’ Medicaid budgets, states have great leeway in how to run the program. In Pennsylvania, Medicaid pays $50,300 a year per recipient of home or community-based care, on average. In New York, it pays $65,600. In contrast, Medicaid pays $15,500 per recipient in Mississippi, and $21,300 in Iowa.A home health aide accompanies a patient to a vaccine appointment. Elder care has long been at the center of political battles over social insurance.James Estrin/The New York TimesThis arrangement has also left the middle class in the lurch. The private insurance market is shrinking, unable to cope with the high cost of care toward the end of life: It is too expensive for most Americans, and it is too risky for most insurers.As a result, middle-class Americans who need long-term care either fall back on relatives — typically daughters, knocking millions of women out of the labor force — or deplete their resources until they qualify for Medicaid.Whatever the limits of the Biden proposal, advocates for its main constituencies — those needing care, and those providing it — are solidly behind it. This would be, after all, the biggest expansion of long-term care support since the 1960s.“The two big issues, waiting lists and work force, are interrelated,” said Nicole Jorwic, senior director of public policy at the Arc, which promotes the interests of people with disabilities. “We are confident we can turn this in a way that we get over the conflicts that have stopped progress in past.”And yet the tussle over resources could reopen past conflicts. For instance, when President Barack Obama proposed extending the Fair Labor Standards Act of 1938 to home care workers, which would cover them with minimum-wage and overtime rules, advocates for beneficiaries and their families objected because they feared that states with budget pressures would cut off services at 40 hours a week.“We have a long road ahead of passing this into law and to implementation,” Haeyoung Yoon, senior policy director of the National Domestic Workers Alliance, said of the Biden proposal. Along the way, she said, supporters must stick together.Given the magnitude of the need, some wonder whether there might be a better approach to shoring up long-term care than giving more money to Medicaid. The program is perennially challenged for funds, forced to compete with education and other priorities in state budgets. And Republicans have repeatedly tried to curtail its scope.“It’s hard to imagine Medicaid is the right funding vehicle,” said Robert Espinoza, vice president for policy at PHI, a nonprofit research group tracking the home care sector.Some experts have suggested, instead, the creation of a new line of social insurance, perhaps funded through payroll taxes as Social Security is, to provide a minimum level of service available to everyone.A couple of years ago, the Long-Term Care Financing Collaborative, a group formed to think through how to pay for long-term elder care, reported that half of adults would need “a high level of personal assistance” at some point, typically for two years, at an average cost of $140,000. Today, some six million people need these sorts of services, a number the group expects to swell to 16 million in less than 50 years.In 2019, the National Academy of Social Insurance published a report suggesting statewide insurance programs, paid for by a dedicated tax, to cover a bundle of services, from early child care to family leave and long-term care and support for older adults and the disabled.This could be structured in a variety of ways. One option for seniors, a catastrophic insurance plan that would cover expenses up to $110 a day (in 2014 dollars) after a waiting period determined by the beneficiary’s income, could be funded by raising the Medicare tax one percentage point.Mr. Biden’s plan doesn’t include much detail. Mr. Gleckman of the Urban Institute notes that it has grown vaguer since Mr. Biden proposed it on the campaign trail — perhaps because he realized the tensions it would raise. In any event, a deeper overhaul of the system may eventually be needed.“This is a significant, historic investment,” Mr. Espinoza said. “But when you take into account the magnitude of the crisis in front of us, it’s clear that this is only a first step.” More

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    Week’s unemployment claims fall to lowest level of the pandemic.

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    Jobless claims fell last week to their lowest level of the pandemic, renewing confidence in a dynamic economic revival.About 613,000 people filed first-time claims for state unemployment benefits last week, the Labor Department said Thursday, a decrease of 153,000 from the previous week.In addition, 132,000 filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 20,000 from the previous week.Neither figure is seasonally adjusted.With the pandemic’s end seemingly in sight, the economy is poised for a robust comeback. But weekly applications for unemployment claims have remained stubbornly high for months, frustrating the recovery even as businesses reopen and vaccination rates increase.“The job market conditions for job seekers have really improved extremely quickly between January and now,” said Julia Pollak, a labor economist at the job site ZipRecruiter. “But there are still huge barriers to returning to work.”Jobless claims for the next few months could remain much higher than they were before the pandemic as the labor market adjusts to a new normal.Concerns about workplace safety persist, especially for workers who are not yet vaccinated. Many children are still attending schools remotely, complicating the full-time work prospects for their caregivers.But there is hope on the horizon as those barriers begin to fall. President Biden moved up the deadline for states to make all adults eligible for vaccination to April 19, and every state has complied. Students who have been learning remotely will begin to return to the classroom in earnest.“This was the deepest, swiftest recession ever, but it’s also turning into the fastest recovery,” Ms. Pollak said. “And I don’t think we should lose sight of that just because some of the measures are a little stubborn.” More

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    Fed Chief Says U.S. Economy Is at an ‘Inflection Point’ as Risks Remain

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    “It’s going to be smart if people can continue to socially distance and wear masks,” Jerome Powell said on “60 Minutes.”WASHINGTON — The economy is at an “inflection point” and on the cusp of growing more quickly, the Federal Reserve chairman, Jerome H. Powell, said in an interview broadcast on Sunday night. But he warned that the crisis was not yet over.In the interview, with “60 Minutes” on CBS, Mr. Powell said that the American economy “has brightened substantially” as more people are vaccinated and businesses reopen. But he cautioned that “there really are risks out there,” specifically coronavirus flare-ups, if Americans return to normal life too quickly.“The principal risk to our economy right now really is that the disease would spread again more quickly,” he said. “And that’s troubling. It’s going to be smart if people can continue to socially distance and wear masks.”The Fed has held interest rates near zero since March 2020 and has been buying about $120 billion in government-backed bonds each month, policies meant to stoke spending by keeping borrowing cheap. Fed officials have been clear that they will continue to support the economy until it is closer to their goals of maximum employment and stable inflation — and that while the situation is improving, it is not there yet.Mr. Powell reiterated that approach on Sunday, saying that the central bank would “consider raising rates when the labor market recovery is essentially complete, and we’re back to maximum employment, and inflation is back to our 2 percent goal and is on track to move above 2 percent for some time.”But he said it would “be a while until we get to that place.”Discussing inflation, Mr. Powell once again made clear that the Fed wanted to see “sustainable” price increases before it adjusted monetary policy.“Inflation has been below 2 percent,” he said. “We want it to be just moderately above 2 percent. So that’s what we’re looking for.” “And when we get that,” he added, “that’s when we’ll raise interest rates.”Some prominent onlookers have warned that the economy has the potential overheat as the federal government pumps out trillions of dollars in stimulus aid and other spending and as the economy reopens, allowing consumers to spend more money.So far, no sustained inflation spike has materialized.Figures show the economy is recovering, albeit slowly. Employers added more than 900,000 workers to payrolls last month, but the country is still missing millions of jobs compared with February 2020, and just last week state jobless claims climbed.Mr. Powell on Sunday highlighted that while some workers were doing well, others had yet to get back to where they were before Covid-19 lockdowns, a phenomenon that will influence when the Fed reduces or removes policy support.“What you’re seeing is some parts of the economy are doing very well, have fully recovered, have even more than fully recovered in some cases,” Mr. Powell said. “And some parts haven’t recovered very much at all yet. So you do see real disparities between different parts of the economy. It’s sort of unusual for an economy like ours.”Mr. Powell also pointed to data that shows the burden is falling hardest on those least able to bear it: Lower-income service workers, who are heavily people of color and women, have been hit hard by job losses.While he expects those workers to get back to their jobs more quickly as the economy rebounds, the Fed needs to “stick with those people and support them as they try to get back to where they were in life, which was working,” he said, adding, “They were in jobs just a year ago.” More

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    Amazon Workers Defeat Union Effort in Alabama

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    The company’s decisive victory deals a crushing blow to organized labor, which had hoped the time was ripe to start making inroads.Amazon workers at a giant warehouse in Alabama voted decisively against forming a union on Friday, squashing the most significant organizing drive in the internet giant’s history and dealing a crushing blow to labor and Democrats when conditions appeared ripe for them to make advances.Workers cast 1,798 votes against a union, giving Amazon enough to emphatically defeat the effort. Ballots in favor of a union trailed at 738, fewer than 30 percent of the votes tallied, according to federal officials.The lopsided outcome at the 6,000-person warehouse in Bessemer, Ala., came even as the pandemic’s effect on the economy and the election of a pro-labor president had made the country more aware of the plight of essential workers.Amazon, which has repeatedly quashed labor activism, had appeared vulnerable as it faced increasing scrutiny in Washington and around the world for its market power and influence. President Biden signaled support for the union effort, as did Senator Bernie Sanders, the Vermont independent. The pandemic, which drove millions of people to shop online, also raised questions about Amazon’s ability to keep those employees safe.But in an aggressive campaign, the company argued that its workers had access to rewarding jobs without needing to involve a union. The victory leaves Amazon free to handle employees on its own terms as it has gone on a hiring spree and expanded its work force to more than 1.3 million people.Margaret O’Mara, a professor at the University of Washington who researches the history of technology companies, said Amazon’s message that it offered good jobs with good wages had prevailed over the criticisms by the union and its supporters. The outcome, she said, “reads as a vindication.”She added that while it was just one warehouse, the election had garnered so much attention that it had become a “bellwether.” Amazon’s victory was likely to cause organized labor to think, “Maybe this isn’t worth trying in other places,” Ms. O’Mara said.The Retail, Wholesale and Department Store Union, which led the drive, blamed its defeat on what it said were Amazon’s anti-union tactics before and during the voting, which was conducted from early February through the end of last month. The union said it would challenge the result and ask federal labor officials to investigate Amazon for creating an “atmosphere of confusion, coercion and/or fear of reprisals.”“Our system is broken,” said Stuart Appelbaum, the union’s president. “Amazon took full advantage of that.”Amazon said in a statement, “The union will say that Amazon won this election because we intimidated employees, but that’s not true.” It added, “Amazon didn’t win — our employees made the choice to vote against joining a union.”About half of the 5,876 eligible voters at the warehouse cast ballots in the election. A majority of votes, or 1,521, was needed to win. About 500 ballots were contested, largely by Amazon, the union said. Those ballots were not counted. If a union had been voted through, it would have been the first for Amazon workers in the United States. More

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    Amazon Union Vote: Labor Loss May Bring Shift in Strategy

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    After an election defeat in Alabama, many in labor are shifting strategies, wary of the challenges and expense of winning votes site by site.The lopsided vote against a union at Amazon’s warehouse in Bessemer, Ala., was a major disappointment to organized labor, which regards the fight with Amazon as central to labor’s survival. Yet the defeat doesn’t mark the end of the campaign against Amazon so much as a shift in strategy.In interviews, labor leaders said they would step up their informal efforts to highlight and resist the company’s business and labor practices rather than seek elections at individual job sites, as in Bessemer. The approach includes everything from walkouts and protests to public relations campaigns that draw attention to Amazon’s leverage over its customers and competitors.“We’re focused on building a new type of labor movement where we don’t rely on the election process to raise standards,” said Jesse Case, secretary-treasurer of a Teamsters local in Iowa that is seeking to rally the state’s Amazon drivers and warehouse workers to pressure the company.The strategy reflects a paradox of the labor movement: While the Gallup Poll has found that roughly two-thirds of Americans approve of unions — up from half in 2009, a low point — it has rarely been more difficult to unionize a large company.One reason is that labor law gives employers sizable advantages. The law typically forces workers to win elections at individual work sites of a company like Amazon, which would mean hundreds of separate campaigns. It allows employers to campaign aggressively against unions and does little to punish employers that threaten or retaliate against workers who try to organize.Lawyers representing management say that union membership has declined — from about one-third of private-sector workers in the 1950s to just over 6 percent today — because employers have gotten better at addressing workers’ needs. “Employees have access to the company in order to express any concerns they might have,” said Michael J. Lotito of the firm Littler Mendelson.But labor leaders say wealthy, powerful companies have grown much bolder in pressing the advantages that labor law affords them.Before Amazon, few companies better epitomized this posture than Walmart, which union leaders targeted in the 1990s and 2000s, convinced that the retail giant was driving down wages and benefits across the retail industry.Walmart, in turn, took sometimes drastic steps to keep unions at bay. In 2000, after a small group of meat cutters at a Texas store decided to unionize, the company eliminated the position across other stores. Five years later, when workers at a Walmart in Quebec were seeking to join the United Food and Commercial Workers union, the company shut the store. Walmart said the store was not performing well financially.“Everywhere they tried, they were defeated,’’ Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, said of the unions. “Walmart would send teams to swamp the stores to work against a union. They are good at it.”As with Walmart, labor leaders believed it was critical to establish a foothold at Amazon, which influences pay and working conditions for millions of workers thanks to the competitive pressure it puts on rivals in industries like groceries and fashion.But the labor movement’s failure to make inroads at Walmart despite investing millions of dollars has loomed over its thinking on Amazon. “They felt so burned by trying to organize Walmart and getting basically nowhere,” said Ruth Milkman, a sociologist of labor at the Graduate Center of the City University of New York.It was only a relatively small, scrappy union, the Retail, Wholesale and Department Store Union, that felt the election in Alabama was worth the large investment. As the votes were being tallied, Stuart Appelbaum, the union’s president, attributed the one-sided result to a “broken” election system that favors employers.Amazon saw things differently. “It’s easy to predict the union will say that Amazon won this election because we intimidated employees, but that’s not true,” the company said in a statement. “Our employees made the choice to vote against joining a union. Our employees are the heart and soul of Amazon, and we’ve always worked hard to listen to them.”Yet even as elections have often proven futile, labor has enjoyed some success over the years with an alternative model — what Dr. Milkman called the “air war plus ground war.”The idea is to combine workplace actions like walkouts (the ground war) with pressure on company executives through public relations campaigns that highlight labor conditions and enlist the support of public figures (the air war). The Service Employees International Union used the strategy to organize janitors beginning in the 1980s, and to win gains for fast-food workers in the past few years, including wage increases across the industry.“There are almost never any elections,” Dr. Milkman said. “It’s all about putting pressure on decision makers at the top.”In some respects, labor’s effort to gain traction at Amazon had begun to follow this playbook before the campaign in Alabama. In early 2019, Mr. Appelbaum’s union, working with nonprofit organizations, local politicians and other labor groups, helped scuttle a deal that would have brought a second Amazon headquarters to New York by drawing attention to the company’s anti-union posture.That fall, several nonprofit groups formed a coalition, called Athena, to help persuade Americans that the company was a monopolist and that it exploited workers. And during the pandemic, Amazon workers around the country have joined groups and staged walkouts to amplify their concerns about safety and pay.Labor leaders and progressive activists and politicians said they intended to escalate both the ground war and the air war against Amazon after the failed union election, though some skeptics within the labor movement are likely to resist spending more revenue, which is in the billions of dollars a year but declining.More than 1,000 Amazon workers across the country have contacted the retail workers union in recent months and many appear to be girding for confrontation with the company.Mr. Appelbaum said in an interview that elections should remain an important part of labor’s Amazon strategy. “I think we opened the door,” he said. “If you want to build real power, you have to do it with a majority of workers.”But other leaders said elections should be de-emphasized. Mr. Case said the Teamsters were trying to organize Amazon workers in Iowa so they could take actions like labor stoppages and enlist members of the community — for example, by turning them out for rallies.During the pandemic, Amazon workers around the country have joined groups and staged walkouts to amplify their concerns about safety and pay.Elaine Cromie for The New York TimesLate last year, a nonprofit group called the Solidarity Fund invited tech industry workers to apply for stipends that would help fund their organizing efforts. According to Jess Kutch, the group’s executive director, Amazon employees claimed about half of the roughly $100,000 that the group has distributed, reflecting the growing activism of its employees.As for external pressure, progressive groups said they intended to draw attention to a broad range of concerns about Amazon, from its power over small businesses to the potentially questionable uses of its home security technology, Ring.“We will be raising questions around Ring and the breadth of agreements they have with local police departments,” as they relate to surveillance of people of color, said Lauren Jacobs, a longtime labor organizer who now runs the Partnership for Working Families, a network that seeks to reduce economic inequality and that is a co-founder of the Athena coalition.Many labor officials urged Congress to increase its scrutiny of Amazon’s labor practices, including its use of mandatory meetings, texts and signs to discourage workers in Alabama from unionizing. “There have to be consequences for people like Bezos,” said Richard Bensinger, a former A.F.L.-C.I.O. organizing director who is advising workers at other Amazon facilities, referring to Jeff Bezos, the company’s founder. “We need congressional hearings to publicize this stuff.”Some members of Congress indicated that they would heed this call. “How long will Jeff Bezos thumb his nose at the United States Senate?” Senator Elizabeth Warren of Massachusetts said in an interview, citing Mr. Bezos’s refusal to appear at a recent Senate hearing on executive pay. “He has done it in the past, but the winds are blowing from a different direction today.”Other labor leaders said the loss in Alabama should prompt Congress to rewrite labor law to make it easier for workers to form unions. The Protecting the Right to Organize Act, or PRO Act, which the House passed last month, would outlaw mandatory anti-union meetings and impose penalties on employers who violate labor law. (There are currently no financial penalties for doing so.)But after Bessemer, many labor leaders think Congress should go further, letting workers unionize companywide or industrywide, not just by work site as is typical. The loss “can be an opportunity to look beyond the PRO Act and why we need labor law with a focus on the sector,” Larry Cohen, chairman of the progressive advocacy group Our Revolution and a former president of the Communications Workers of America, said in a text message.Mary Kay Henry, president of the Service Employees International Union, agreed that the key to taking on a company as powerful as Amazon was to make it easier for workers to unionize across a company or industry. “It’s not going to happen one warehouse at a time,” she said.But Ms. Henry said workers and politicians could pressure Amazon to come to the bargaining table long before the law formally requires it — in the same way that President Biden warned that there should be no intimidation or coercion during the Alabama union election.“It would be incredibly powerful if Biden and Secretary of Labor Marty Walsh called on McDonald’s and Amazon and other major corporations to set a bargaining table with workers and government and they would help support it,” she said.Michael Corkery More