Talking Data – The Impact of Ending Enhanced Federal UI Benefits

Last week Indeed’s Hiring Lab reported diminishing search activity for jobs within states ending enhanced federal COVID-19 unemployment benefits:

Four states ended enhanced federal UI benefits on June 12, and eight more states ended them on June 19, months ahead of the official expiration on September 6. The share of national job search activity in these states, measured by clicks on job postings, is below the late April baseline.

It is unclear why search activity is below the baseline in states where federal UI benefits have ended. If overly generous federal UI benefits were holding back job seekers, then we would expect search activity to increase, relative to the national trend, in states where those benefits have ended.

The next four to eight weeks could very well reveal job-seekers’ willingness to return in response to ending supplemental support. Companies with publicized wage increases have seen increased interest, suggesting more widespread wage increases could be needed to boost demand for the plethora of job openings.

We encountered quite the head scratcher after reviewing Google search activity for a variety of job seeking and recruiting topics within the US. Bigger picture, searches by job-seekers have steadily improved since early April for part to full-time work. The spread between favorable and unfavorable search activity paints an optimistic picture heading into the summer months. In contrast to searches on Indeed, searches via Google suggest interest in getting back to work is STRONGEST within states having already or soon ending supplemental support

The chart below shows the rolling five-week changes in the spread between favorable and unfavorable search activity by the date support ends. Those states first pulling the chord on June 12th (AL, AK, ID, IA, MO, and MS) have seen job-seekers get most active followed by those ending June 19th and then June 26th-27th.

The next chart shows the topics used to generate this spread of favorable (blue) versus unfavorable (orange) job-related search activity. Not surprisingly, searches for unemployment benefits have fallen the most for states ending on June 12th. However these same states have the largest surge in job-seeking for part-time work.

For a more detailed look at employment-related searches by states, please see the interactive chart in last week’s post.

The chart below shows the rolling five-week changes in search activity for only entry-level, hourly, or part-time topics. The discrepancy between the searches via Google and Indeed may be due to surges in part-time job-seeking induced by ending support. Indeed reports, “before the COVID-19 crisis, part-time job postings accounted for about 12.5% of Indeed job postings.” Indeed’s heavier weight toward full-time postings could be indicating differing reaction functions between part and full-time job seekers.

Google searches strongly suggest job-seeking for part-time positions is a driving force within these states ending support. Hospitality and beauty/wellness have been significant laggards throughout the pandemic. Is this divergence going to at least mildly narrow for the better with more and more states joining the chorus? As an aside, we expect politics to play a major hand given only Republican led states have thus far ended support. 

Jim and Ben discussed the importance of tracking job-seeking and onboarding according to the end of UI benefits during the latest Talking Data podcast. We may get a strong indication to the ‘transitory’ quandary facing policy-makers. The return of workers without wage gains would suggest transitory will be correct, while a sluggish return could very well imply greater wage increases are required.  

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