Democrats’ Economic Policies Hitting Americans In Their Wallets

Two Months After Democrats Passed Their Massive Spending Bill, Which Included An Extension Of Extra Federal Unemployment Benefits, May Economic Data Shows Americans Experienced The Largest Increase In Inflation Since 2008, Fueled In Part By Businesses Competing For Workers Against Government Benefits Passing Rising Labor And Commodity Costs On To Consumers, All Of Which Now Has Some Dems Reevaluating The Wisdom Of Their Unemployment Policies


SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “This morning, the Labor Department announced that it had observed the largest uptick in prices since the depths of the Great Recession in 2008. And core inflation had reached a nearly three-decade high. The latest data reinforce what too many Americans have been experiencing firsthand: the Biden Administration’s partisan spending bill has blunted our nation’s economic recovery. Higher prices at the gas pump and grocery store. A tougher time for small businesses trying to staff up. And unemployment policies that incentivize too many Americans to stay on the sidelines. Republicans and outside economists warned that the worst of these conditions could have been avoided. But Democrats chose to go it alone.” (Sen. McConnell, Remarks, 6/10/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Nobody should be surprised that prices are increasing everywhere from the grocery store to the car dealership. Demand is soaring as the pandemic recedes while supply constraints linger, especially in labor and transportation. As always, this is a price shock largely made by government. Congress has shovelled out trillions of dollars in transfer payments over the past year, and the Fed has rates at zero while the economy may be growing at a 10% annual rate.” (Editorial, “A Made-in-Washington Inflation Spike,” The Wall Street Journal, 6/10/2021)

  • “The personal savings rate in April was 14.9%, double what it was before the pandemic. Record low mortgage interest rates have enabled homeowners to lower their monthly payments to burn more cash on other things. Congress’s $300 unemployment bonus and other welfare payments for not working have contributed to an enormous worker shortage, which is magnifying supply shortages. All of this is showing up in higher prices…. What Congress has given in relief payments, inflation is taking away…. The money supply has increased 31% since the end of 2019, and federal spending is 50% higher. Now Democrats want to pass another $4 trillion spending bill including a massive social-welfare expansion.” (Editorial, “A Made-in-Washington Inflation Spike,” The Wall Street Journal, 6/10/2021)


‘Another Jump In Prices Tightens The Squeeze On US Consumers’: ‘Rising Commodity Costs Are Forcing Americans To Pay More For Items From Meat To Gasoline’

“U.S. consumer prices continued to climb strongly in May, surging 5% from a year ago to reach the highest annual inflation rate in nearly 13 years. The Labor Department said May’s increase in consumer inflation was the largest since August 2008. The jump followed a 4.2% rise for the year ended in April. The core-price index, which excludes the often-volatile categories of food and energy, rose 3.8% in May from a year before—the largest increase for that reading since June 1992.” (“U.S. Consumer Prices Rose Strongly Again in May,” The Wall Street Journal, 6/10/2021)


“What costs more now? …

Car rental 110% [year over year]
Gas 56%
Used cars 30%
Laundry appliances 27%
Airfares 24%
Auto insurance 17%
Moving 16%
Bacon 13%
Bikes 10%
Hotels 10%
Furniture 9%
Whole milk 7.2%
Clothes 6%” (The Washington Post’s Heather Long, @byHeatherLong, Twitter, 6/10/2021)

“American consumers absorbed another surge in prices in May — a 0.6% increase over April and 5% over the past year, the biggest 12-month inflation spike since 2008…. The increased consumer appetite is bumping up against a shortage of components, from lumber and steel to chemicals and semiconductors that supply such key products as autos and computer equipment, all of which has forced up prices. And as consumers increasingly venture away from home, demand has spread from manufactured goods to services — airline fares, for example, along with restaurant meals and hotel prices — raising inflation in those areas, too.” (“Another Jump In Prices Tightens The Squeeze On US Consumers,” The Associated Press, 6/10/2021)

“For now, though, rising commodity costs are forcing Americans to pay more for items from meat to gasoline. Prices for corn, grain and soybeans are at their highest levels since 2012. The price of lumber to build homes is at an all-time high. More expensive commodities, such as polyethylene and wood pulp, have translated into higher consumer prices for toilet paper, diapers and most products sold in plastic containers.”
(“Another Jump In Prices Tightens The Squeeze On US Consumers,” The Associated Press, 6/10/2021)

“The inflation pressures are not only squeezing consumers but also posing a risk to the economy’s recovery from the pandemic recession.” (“Another Jump In Prices Tightens The Squeeze On US Consumers,” The Associated Press, 6/10/2021)

‘More Companies Have Started Passing On To Consumers The Higher Costs They Are Facing For Raw Materials And Wages’

“More companies have started passing on to consumers the higher costs they are facing for raw materials and wages. Food makers said their costs are climbing at an alarming rate, prompting them to raise some prices. ‘The inflation pressure we’re seeing is significant,’ General Mills Inc. Chief Executive Jeff Harmening said at a recent investor conference. ‘It’s probably higher than we’ve seen in the last decade.’ He and his peers point to transportation, commodity and labor costs all increasing at the same time. They expect the trend to continue for at least the rest of this year. As a result, General Mills, Campbell Soup Co., Unilever PLC, J.M. Smucker Co. and other big food companies are raising prices. Some increases are already visible on supermarket shelves, and more are coming this summer.” (“U.S. Consumer Prices Rose Strongly Again in May,” The Wall Street Journal, 6/10/2021)

“General Mills has said it’s considering raises prices on its products because grain, sugar and other ingredients have become costlier. Hormel Foods has already increased prices for Skippy peanut butter. Coca-Cola has said it expects to raise prices to offset higher costs. Kimberly-Clark, which makes Kleenex and Scott toilet paper, said it will be raising prices on about 60% of its products. Proctor & Gamble has said it will raise prices for its baby, feminine and adult care products.” (“Another Jump In Prices Tightens The Squeeze On US Consumers,” The Associated Press, 6/10/2021)

“Chipotle Mexican Grill has hiked menu prices by roughly 4 percent to cover the cost of raising its workers’ wages. Across the restaurant industry, chains such as Chipotle, Starbucks and McDonald’s have been increasing hourly pay for employees of company-owned locations in a bid to attract new workers and retain their current ones. Consumer demand has come roaring back for restaurant meals, but the workforce has been slower to return, pushing eateries to sweeten the deal. In May, the leisure and hospitality industries added 292,000 jobs, but employment in those fields is still down by 2.5 million compared with pre-pandemic levels, according to the Department of Labor.” (“Chipotle Prices Go Up To Help Cover Cost Of Higher Wages For Employees,” NBC News, 6/08/2021)

  • “In May, Chipotle said that it would raise hourly wages for its restaurant workers to reach an average of $15 an hour by the end of June. Company executives said at the Baird Global Consumer, Technology & Services Conference that they would be passing along the price of raising pay to consumers…. CEO Brian Niccol said the company prefers not to raise its prices but that the move made sense in this scenario.” (“Chipotle Prices Go Up To Help Cover Cost Of Higher Wages For Employees,” NBC News, 6/08/2021)


There Are A Record 9.3 Million Job Openings In The United States

“U.S. job openings rose in April to a fresh record high, along with the number of people who voluntarily left their jobs, underscoring fervent labor demand and turnover as businesses emerge from pandemic-related restrictions and the economy strengthens. The number of available positions climbed to 9.3 million during the month, the highest in data back to 2000, from an upwardly revised 8.3 million in March, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Tuesday.” (“Job Openings in U.S. Jump to Fresh Record High of 9.3 Million,” Bloomberg, 6/08/2021)

Nearly Half Of U.S. Small Businesses Reported Unfilled Job Openings In May, ‘The Fourth Consecutive Month Of Record-High Readings’

“Nearly half of U.S. small business owners reported unfilled job openings in May, marking the fourth consecutive month of record-high readings as finding qualified applicants remains a lingering challenge, a trade group said on Thursday. The National Federation of Independent Business said in its monthly jobs report that 48% of small business owners reported unfilled job openings in May on a seasonally adjusted basis, up from 44% in April. May’s reading is 26 points higher than the 48-year average of 22%. Furthermore, the report showed that 93% of owners looking to hire reported few or no “qualified” applications for the positions they were trying to fill last month.” (“Record-High Number Of U.S. Small Businesses Can’t Fill Job Openings –NFIB,” Reuters, 6/03/2021)

Meanwhile, Small Business Optimism Declined In May For The First Time In Four Months ‘As A Nationwide Labor Shortage And Inflation Worries Weighed On Business Owners’ Economic Outlook’

“U.S. small-business confidence edged lower last month, the first decline in four months, , according to a survey released on Tuesday. The National Federation of Independent Business (NFIB) Optimism Index fell 0.2 point to a reading of 99.6 in May after three straight monthly increases. Five of the 10 index components improved, three declined and two were unchanged.” (“Small Business Optimism Slips On Hiring, Inflation Worries –NFIB,” Reuters, 6/08/2021)

NFIB CHIEF ECONOMIST BILL DUNKELBERG: “If small business owners could hire more workers to take care of customers, sales would be higher and getting closer to pre-COVID levels… In addition, inflation on Main Street is rampant and small business owners are uncertain about future business conditions.” (“Small Business Optimism Slips On Hiring, Inflation Worries –NFIB,” Reuters, 6/08/2021)


In Sector After Sector Of The Economy, Employers Simply Cannot Find Enough Workers

‘Grocery And Restaurant Executives Say Expanded Unemployment Benefits And Federal Stimulus Checks Are Making It Harder To Find People Willing To Work At Their Stores’

The tight labor market is hampering new restaurant and supermarket openings, putting a potential check on growth in a food industry that is being reshaped by the pandemic. Many food sellers are adding stores to capitalize on high consumer spending as Americans emerge from a year spent largely at home. But grocers and restaurants say they are struggling to hire all the workers they want for these stores. They are adding perks and bonuses to entice job seekers and in some cases delaying openings…. There were a record-high 8.1 million unfilled jobs at the end of March, according to the Labor Department, including 993,000 at restaurants and hotels and 878,000 at stores. Businesses that can’t fill jobs may close a part of a restaurant, stock shelves more slowly or serve fewer customers—accommodations that could reduce sales and, economists say, act as a brake on what otherwise is expected to be strong economic growth this year…. Grocery and restaurant executives say expanded unemployment benefits and federal stimulus checks are making it harder to find people willing to work at their stores. (“Restaurants, Supermarkets Can’t Find Enough Workers to Open New Locations,” The Wall Street Journal, 6/03/2021)

  • “‘Just to find people who want to interview is more challenging than it’s been in a long time,’ said Don Fitzgerald, co-chief executive officer of Chicago-based Dom’s Kitchen & Market, a new grocer that plans to open its first store in June. Since March, Dom’s has hired nearly 150 of the 160 employees it wants ahead of the opening. It wasn’t easy. A human-resources executive tried to recruit a potential employee while out to dinner. The company added referral bonuses and plans to get temporary staff from food-services companies if needed, Mr. Fitzgerald said.” (“Restaurants, Supermarkets Can’t Find Enough Workers to Open New Locations,” The Wall Street Journal, 6/03/2021)

Restaurants Are Being Forced To Raise Prices ‘To Account For Higher Costs’ In Hiring Workers: ‘This Is Going To Be Passed On To The Consumer’

“Restaurants are also scrambling to hire as the industry roars back to life. Carl Howard, CEO of Fazoli’s, a chain of nearly 220 Italian restaurants in 28 states, recently pushed back a Georgia opening by several weeks to find more staff. Job seekers are moving on to other employers if a job isn’t ready, he said. He said many franchisees recently raised hourly wages by 10% for several positions. Mr. Howard estimated higher spending on overtime and average hourly wages will dent margins by as much as $100,000 annually per Fazoli’s restaurant. Fazoli’s raised prices by nearly 3% in the past month to account for higher costs, he said. ‘This is going to be passed on to the consumer,’ Mr. Howard said.” (“Restaurants, Supermarkets Can’t Find Enough Workers to Open New Locations,” The Wall Street Journal, 6/03/2021)

‘U.S. Airlines Have Also Struggled With Staffing’: ‘The Labor Market Is Probably As Tough As I’ve Ever Seen It’

“U.S. airlines have also struggled with staffing as air travel demand jumped fairly quickly from historic lows to approaching pre-pandemic levels.... Customers are taking to social media to vent their frustration over two-, three- and four-hour wait times to reach a reservation agent at the nation’s largest airlines. In response, Delta Air Lines is hiring temporary summer contract workers. American Airlines is temporarily bringing back several hundred of its reservation agents who had accepted buyouts to work through the ‘busy summer months,’ and United Airlines is ramping up staffing.” (“TSA Warns Of Staffing Shortages At More Than 100 Airports, Looks For Volunteers,” ABC News, 6/10/2021)

“Southwest Airlines Co. is leaning more on digital job placement tools, including chatbots, to speed up the hiring process amid resurging demand and a competitive labor market, a senior recruiting official said. ‘The labor market is probably as tough as I’ve ever seen it, and so we’ve got to be able to move with speed, and that’s where all these tools come into play,’ said Greg Muccio, the airline’s director of talent acquisition. Southwest has about 2,000 open positions, ranging from flight attendants to gate agents, Mr. Muccio said…. Mr. Muccio said Southwest didn’t furlough or lay off any employees during the pandemic. And unlike many carriers, its business is primarily domestic leisure travel. ‘The planes get full, but it doesn’t necessarily mean they’re highly profitable,’ Mr. Muccio said. ‘But because the planes are so full, you still need the people to serve customers.’” (“Southwest Airlines Automates Some Job Recruiting Tasks as Air Travel Takes Off,” The Wall Street Journal, 6/07/2021)

The TSA Has Only Hired Half The People It Needs This Summer And Expects Staff Shortages At Airports

“As more travelers take to the skies, the Transportation Security Administration (TSA) is projecting that 131 of the nation’s airports will experience staffing shortages this month. Acting TSA Administrator Darby LaJoye is now asking office employees to volunteer at airports for up to 45 days…. TSA has said it hopes to hire 6,000 new officers to handle the summer travel boost, but it has only hired 3,100 so far. It has resorted to offering recruitment incentives such as $1,000 to officers who accept employment with the agency.” (“TSA Warns Of Staffing Shortages At More Than 100 Airports, Looks For Volunteers,” ABC News, 6/10/2021)

Traditional Summer Tourist Attractions Also Can’t Find Workers And Have Been Forced To Cut Hours

“Cedar Point amusement park won’t open on certain dates in June because it is experiencing a shortage of workers, a statement from the Sandusky [Ohio] park read on [May 21st]. Due to staffing shortages, both the park and water park will be closed on select days in June. The park is also now offering employees $20 an hour in addition to benefits and a $500 seasonal sign-on bonus.” (“Cedar Point Won’t Open On Certain June Dates Because Of Lack Of Workers,” WTOL, 5/21/2021)

“Sheridan Powell, a spokeswoman for Visit Colorado Springs, said businesses in the tourism and hospitality industry are understaffed but could see a boost as more younger workers get vaccinated against COVID-19. ‘If these shortages continue, the tourism industry as a whole will see a huge impact,’ Powell said. ‘Operating below capacity or reducing hours results in less profits for businesses, regardless of demand.’” (“Colorado Springs-Area Attractions Deal With Labor Shortage As Summer Tourist Season Heats Up,” The [Colorado Springs] Gazette, 6/07/2021)

  • “The North Pole-Santa’s Workshop is in dire need of elves. The beloved mountain amusement park, like many restaurants, hotels and fellow attractions throughout the Pikes Peak Region, is struggling to hire staff as labor shortages persist amid what looks to be a busy summer tourism season. ‘The choice you make is how thin do you want to run it, which is hard on your staff, and the guest experience isn’t as good when you thin your staff out,’ Tom Haggard, the amusement park’s owner, said Monday. That’s why Haggard decided to keep the park open five days a week throughout the summer instead of its typical seven…. Haggard is looking to fill around 20 ride-operator positions that pay the state minimum wage.” (“Colorado Springs-Area Attractions Deal With Labor Shortage As Summer Tourist Season Heats Up,” The [Colorado Springs] Gazette, 6/07/2021)


‘Swing Voters Fear Inflation’ And Point To ‘Fear Of An Impending Crash Following The Injection Of Federal Stimulus Money During The Pandemic’

“Though restaurants are bustling and signs of life are returning across a nearly post-pandemic United States, swing voters in Axios’ latest Engagious/Schlesinger focus group say they feel anxious about the current state of the economy. … Main Street is living a debate being fought in the ivory tower and among economists. Only 3 of 13 voters said they felt the U.S. economy is ‘booming.’ The rest expressed fear of an impending crash following the injection of federal stimulus money during the pandemic.” (“Swing Voters Fear Inflation,” Axios, 6/10/2021)

They Also Note Experiences With People ‘Not Looking For Jobs Because They Make More From Claiming Unemployment Benefits’

“Nearly all the voters (11 of 13) also found believable an assertion made by many businesses: that people are not looking for jobs because they make more from claiming unemployment benefits.” (“Swing Voters Fear Inflation,” Axios, 6/10/2021)

  • “Kelli V. from Seminole County, Florida, was laid off during the pandemic. She resumed work after her employer offered her job back but said it wasn’t an easy decision. ‘It was really tempting to say ‘no,’ because I made more from unemployment than I do from my part-time job,’ she said. ‘I know a couple people who didn’t lose their jobs but were talking about how they wish they could. They were hoping they would get laid off (to collect unemployment),’ said Holly M. from Gwinnett County, Georgia.” (“Swing Voters Fear Inflation,” Axios, 6/10/2021)


After Voting To Extend Enhanced Unemployment Benefits, Some Senate Democrats Now Say The Extra Federal Money Is ‘Having A Significant Impact’ And ‘It Certainly Makes Sense To Pare Them Back To Normal Size’

SEN. ANGUS KING (I-ME): “I can’t deny that it appears to be having a significant impact, particularly on the hospitality industry… (The enhanced UI) is helping to support the economy. On the other hand, is it impeding job growth? I don’t know. We’ll have to find out. … [States should have] wide discretion to make their own decisions.” (“The Risk In Democrats’ Generous Unemployment Benefits,” Axios, 6/09/2021)

SEN. TIM KAINE (D-VA): “Was everything calibrated perfectly? I don’t know that I’d say that. … I’m not questioning decisions that governors are making about it. I think if there’s solid evidence that there’s a disincentive, then governors may curb back. But I’m not exactly sure that that evidence is strong and uniform everywhere in the country.” (“The Risk In Democrats’ Generous Unemployment Benefits,” Axios, 6/09/2021)

SEN. CHRIS MURPHY (D-CT): “These extended benefits were never supposed to be permanent, and if the economy comes back online, it certainly makes sense to pare them back to normal size.” (“The Risk In Democrats’ Generous Unemployment Benefits,” Axios, 6/09/2021)

MSNBC’s KRISTEN WELKER: “Montana, your state, is one of the 21 states ending federal unemployment benefits starting in June, those enhanced benefits. … You said you don’t think that’s unreasonable. Tell me why. …”
SEN. JON TESTER (D-MT): “Well, I’m going to tell you the unemployment level in Montana is very, very low. … But I can tell you that it’s low and our businesses need employees. And if we’re going to expand the economy, it is really important. ... But I can tell you, right now, I think this is a reasonable approach.”
WELKER: “But, senator, you previously voted to support those enhanced benefits. So what’s changed?”
SEN. TESTER: “I absolutely did. ... What’s changed is we have seen the economy… snap back. We have seen businesses snap back. Now, we’re not where we need to be totally, but the fact is the unemployment rate is so low in Montana, I think this was the proper thing to do. … [I]n Montana where we’re seeing unemployment rates very low, it is important to get folks back to work. Especially coming out of this pandemic, because I’m one that believes work is therapy and there is going to be some big issues to come out of this pandemic if we don’t get folks back to work as quickly as possible.” (MSNBC, 5/20/2021)


After The April Jobs Report, The Biden White House Dismissed The Additional Unemployment Benefits Having Any Negative Impact On Hiring

REPORTER: “Mr. President, do you believe enhanced unemployment benefits had any effect on diminishing a return to work in some categories?”
PRESIDENT JOE BIDEN: “No, nothing measurable.” (President Biden, Remarks, 5/07/2021)

TREASURY SECRETARY JANET YELLEN: “You know, I don’t think that the additional — the addition to unemployment compensation is really the factor that’s making a difference. … But I really don’t think the major factor is the extra unemployment.” (White House Press Briefing, 5/07/2021)

WHITE HOUSE PRESS SECRETARY JEN PSAKI: “And we are seeing little evidence that enhanced unemployment benefits are currently impacting or affecting Americans’ willingness to work.” (White House Press Briefing, 5/07/2021)

However, After The May Jobs Report, The White House Changed Their Tune On The ‘Temporary’ Unemployment Benefits That Governors ‘Have Every Right’ To End

PRESIDENT JOE BIDEN: “And temporary boost in unemployment benefits that ended — that we enacted, I should say — helped people who lost their jobs through no fault of their own, and who still may be in the process of getting vaccinated.  But it’s going to expire in 90 days.  That makes sense it expires in 90 days.” (President Biden, Remarks, 6/04/2021)

PSAKI: “I think we shouldn’t lose sight of some basic facts here, which is that those governors who have made the decision, as they have every right to do, to pull back on unemployment benefits — or not accept them, I should say, accurately — that hasn’t even taken effect in any state across the country. So in terms of how we’re evaluating the impact, we haven’t even seen the impact yet; that takes effect in June. It is important for people to understand, factually, that the President, no one from the administration has ever proposed making these permanent or doing it over the long term. And sometimes I think that was just an effort to make that clear in the public. So we understand there’s politics at play here. That’s okay. Every governor is going to make their own decision.” (White House Press Briefing, 6/04/2021)

DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL BRIAN DEESE: “With respect to the UI benefits — you heard the President earlier today — this — that program was designed as a temporary lifeline. … I’ll just, you know, restate what the President said today: The President believes that the temporary unemployment benefits and the temporary boost to those benefits… was designed to be temporary and to expire in about 90 days. And that’s — that’s appropriate.” (White House Press Briefing, 6/04/2021)


At Least 25 Republican-Led States Are Ending Additional Federal Unemployment Payments

“A growing number of GOP-led states are planning to end supplemental unemployment benefits designed to help out-of-work Americans weather the coronavirus pandemic, a move they say will help businesses struggling to hire employees. At least 25 states decided in May and June to prematurely cut off the sweetened aid, which provided an extra $300 a week on top of regular state unemployment benefits. The supplemental benefit is not slated to expire until Sept. 6, 2021. Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming announced they will stop giving unemployed workers an extra $300 in benefits sometime over the summer.” (“These 25 States Are Ending $300 Unemployment Benefits This Summer,” Fox Business, 6/02/2021)



Related Issues: Small Business, Middle Class, Labor, Economy