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Businesses are using signing bonuses and other incentives to draw new workers.
According to a report from AnnElizabeth Konkel — a labor market economist at job listing company Indeed — employers in the United States are offering one-time perks to attract new applicants as enhanced federal unemployment insurance expires in many states.
As the company details:
One avenue some are pursuing is to offer hiring incentives, such as hefty signing bonuses, retention bonuses, or one-time cash payments on being hired.
When advertised in job postings, these incentives can quickly get jobseekers’ attention. And the share of job seeker searches for bonuses has steadily climbed since mid-spring. But incentives are also attractive to employers because they are a one-time cost that doesn’t require increasing wages or paid time off for all employees.
The number of job postings on Indeed’s platform with hiring incentives climbed to 4.1% —more than double the percentage with incentives listed at the end of June 2020. Indeed states that some job postings explicitly mention that federal unemployment benefits — which were passed under the American Rescue Plan in March — are ending soon, while others are offering COVID-19 vaccination bonuses.
Incentives have risen most over the past six months in the driving, personal care and home health, and childcare sectors.
Indeed’s findings reflect a labor market in which employers must compete with a federal government that incentivizes workers to remain unemployed. In some states — most of which are governed by Democrats — workers can claim benefits that imply a six-figure annualized salary.
Conservative lawmakers are increasingly concerned about the macroeconomic effects of the enhanced benefits.
Rep. Jim Jordan (R-OH), for one, questioned Federal Reserve Chair Jerome Powell about the distorted job market.
“Over 9 million job openings over the past two months, only 800,000 jobs added back. That’s pretty bad. Is there a specific reason you point to as to why those numbers aren’t where we would frankly hope they would be?” asked Jordan. Powell responded that high unemployment benefits “may be a factor.”
Sen. Lindsey Graham (R-SC), for another, brought up similar issues with Office of Management and Budget Acting Director Shalanda Young.
“There’s a lot of jobs out there that are unfilled and will never be filled until you change the benefit structure. Does that logic make sense to you, given where we’re at in our economy?” Graham asked.
“I understand the logic, but I’ve also not met Americans who would prefer not to work,” Young replied. “There’s a dignity to work in this country.”
Graham chuckled as he answered, “I got a lot of people in my family that ain’t working because they’re getting — I’ll show you some of my family.”