Are unemployment benefits keeping people from working?

02.08.21 10:25 PM By Patrick

Watch the recording of our webinar discussing this topic here.

Unemployment rates skyrocketed in the spring of 2020 when the pandemic hit, and the economy is still being affected. There’s still a 6% national unemployment rate (with rates up to 11% in California.) We’ve lost 8 million jobs in the pandemic that have not come back. But, there are currently 9 million vacant jobs across the country. So why aren’t these jobs getting filled? 

The truth is that the economy as we knew it is gone. The Covid-19 pandemic forced many people out of their jobs, either due to shutting down or having to choose between work or taking care of their family because things like childcare and in-person schooling were no longer available. Women disproportionately dropped out of the workforce compared to men, citing needing to take care of their families. 

There’s a big disconnect between the workforce and struggling industries, particularly retail, restaurants, hospitality, and healthcare. In these fields, the economic crisis of the pandemic exposed weaknesses in unsustainable business models. For example, the average annual turnover for healthcare workers, particularly personal caregivers and nursing home staff, was 45% pre-pandemic, and residential employment was down 10%! Fast food restaurants had an even higher turnover. 

Many places were already moving towards automation to replace low-wage employees. We can’t build our economy off of these low-wage jobs anymore. This business model is systemic and not sustainable. To push the economy in a better direction, we have to develop the workforce.

Federal Reserve Chair Jerome Powell has also noted the shift and said in November 2020, “We’re recovering, but to a different economy, we’re not going back to the same economy.” What was the old economy? In the old economy, businesses were paying people just above minimum wage. More than half of the workforce was below the poverty line, and there was increasing income inequality. As businesses have started to reopen, those workers don’t have the incentive to return to jobs that don’t provide the kind of opportunities or wages they’re looking for.

How do we get out of this situation?

So what can be done? The answer is Workforce Development. The government, non-profit organizations, educational institutions, and businesses must train workers to meet the new economy and help workers find a sense of purpose. 

Specifically, we need to focus on “middle-skills” jobs. What are middle-skill jobs?

Middle skill jobs are:

  • Jobs that can’t be outsourced.

  • Unionized jobs.

  • Jobs that provide opportunities for on-the-job training.

Middle skills pay the bills. They’re jobs that the move toward automation won’t quickly eliminate. They will provide the kind of income that working adults need to support themselves and their families.


An easy way to achieve this is using sector strategies. Know what the jobs are in your region, be aware of what industries are hurting, and utilize a four-step approach. 

1) Engage - leverage technology like social media. Tweet, use TikTok, and ask, “Are you interested in a career in healthcare? Get paid to get trained!” it’s essential to leverage technology to measure participation levels and track how the community is responding. Go out into the community, talk to people on the street, or go to schools and engage with people. 

2) Assess - evaluate people’s skills but don’t get granular. Find out what their skills are and where their interests lie. Are they good communicators or educators, or are they good with computers? What motivates them? Organizations like Dotin provide quick assessments online to evaluate skills and guide people towards a career they’ll be passionate about.

3) Train - get them in touch with services that offer training programs and on-the-job training. Training needs to be quick, such as 90 days, not 2-4 years. It can include apprenticeships, paid internships, organizations that provide on-the-job training or work experience. The point is to get people trained quickly in middle-skill jobs that will benefit them as well as helping the industries that are hurting.

4) Connect - help them get that work experience and connect with employers. We also need we need better supportive services. We need to make childcare accessible and affordable. 

Using these tools and strategies, we can be well on our way to a modern, thriving, new economy. 

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