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White House urges businesses to pay workers more to compete with unemployment

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The White House on Friday urged businesses struggling to find workers willing to come off unemployment to raise their pay to compete with a $300 per week federal unemployment insurance supplement.

A top economic adviser to President Biden said that competing against the government subsidies was a matter for the free market to resolve.

“The way that in our capitalist system — so the way that a market economy works is we work through prices as a signal,” said Cecilia Rouse, chair of the Council of Economic Advisers.

“Especially essential workers, their jobs are not risk free, right? They’ve become a little more — a little riskier. And so if employers have to pay a little bit more to compensate those employees to take on that risk, I think that’s appropriate — again in a market economy, where that’s the currency.”

White House Press Secretary Jen Psaki added that “many of these companies — big companies, let me say — who benefited, many of them made quite a profit during the pandemic and many of them also received quite a bit of benefits, $1.4 trillion worth — could pay, could offer to pay a little bit more, and maybe that will incentivize more workers to come back into the workforce.”

People seeking employment wait to talk to a recruiter at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds on May 12, 2021.
People seeking employment wait to talk to a recruiter at the 25th annual Central Florida Employment Council Job Fair at the Central Florida Fairgrounds on May 12, 2021.
SOPA Images/LightRocket via Getty Images

A recent Brooklyn Chamber of Commerce poll of 200 small businesses found that 64 percent were having trouble hiring people, with 42 percent of respondents citing the $300 weekly federal supplement in COVID-19 jobless benefits.

A University of Chicago study separately estimated that 42 percent of people accepting unemployment benefits earn more than at prior jobs. Chamber of Commerce estimated that at about 25 percent.

A man hands his resume to an employer at a job fair at the Central Florida Fairgrounds on May 12, 2021.
A man hands his resume to an employer at a job fair at the Central Florida Fairgrounds on May 12, 2021.
SOPA Images/LightRocket via Getty Images

States administer unemployment benefits and some — including Alabama, Arkansas, Mississippi, Montana and South Carolina — are cutting off the special pandemic boost.

President Biden said Monday, in response to a surprisingly poor jobs-growth report, that people able to work must accept positions and that “no one should be allowed to game the system and we will insist that the law is followed.” But the White House has not taken any specific action to encourage stricter enforcement.

A hiring sign hangs on a restaurant in Greenwich Village, Manhattan on May 4, 2021.
A hiring sign hangs on a restaurant in Greenwich Village, Manhattan on May 4, 2021.
Mary Altaffer/AP, File
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