WASHINGTON—With millions of Americans still out of work and job openings at a record high, policy makers are dealing with an unexpected problem: How to coax people back into the labor force.
Congressional lawmakers from both parties are considering incentives such as providing federal funding to pay for hiring bonuses for workers and expanded tax credits for employers. A handful of states are moving to implement such programs on their own, without waiting for action from Washington.
Some economists, Republican lawmakers and business owners say enhanced federal unemployment benefits are contributing to the labor shortage, because many workers receive more in government aid than they would get on the job. Those benefits—$300 a week on top of regular state payments—are due to expire after Labor Day.
Other economists say the payments have provided a boost to many lower-income families, who have disproportionately lost jobs in the coronavirus pandemic, while in turn pushing money back into the broader economy.
Surveys suggest other factors are also holding people back from returning to work, such as continuing fear of contracting Covid-19 or lack of child care. As the economy continues to improve and the pandemic wanes, however, it’s possible the payments could become a bigger disincentive for those who are still unemployed to return to work, some economists have said.