An unexpectedly strong US jobs market is helping average Americans keep spending while staying up-to-date on their bills. In Atlanta, averages are of little comfort to people like LaRon Eskew.
Eskew, 28, lost his job at a large bank’s data center in February. He’s been getting by on gig work — fixing cars and installing security cameras — but the side hustles only bring in about three-quarters of his former salary.
“I wouldn’t say I’m sweating bullets, but I’m up to my neck,” said Eskew, whose rent has climbed to $1,600 monthly from $1,200 per month in the past two years.
With the US unemployment rate still hovering near historical lows, advocates for America’s jobless worry that the solid labor-market data is hiding the pain of those stung by recent cuts in sectors like housing, technology and human resources.
It’s also allowing state legislators, who have broad license to set benefit levels for unemployment insurance, to keep payouts achingly low. Five states have weekly payment maximums below $300, despite inflation that’s raised the price of an average basket of goods and services by almost 20% since 2020. A third of states don’t account for wage growth, and by extension inflation, in their payouts.
Maximum Benefits
“We have not increased the benefit amount in years, and there seems to be no appetite to do so,” said Anna Eskamani, a Democrat state representative from Florida, where the weekly maximum is $275. Eskamani said when she tried to raise the payment by $100, she was accused of “trying to help lazy people.” The $275 maximum — which also applies in Alabama, Louisiana and Tennessee — has the same buying power as about $232 in early 2020, according to the Bureau of Labor Statistic’s inflation calculator.
By the numbers, the average American should feel relatively secure in their jobs. Friday’s employment report is expected to show nonfarm payrolls rose by a robust 170,000 in December, based on economists’ forecasts, and the jobless rate ticked up to 3.8%, still low by historical standards. Weekly jobless claims have remained low as well, while wages keep increasing, helping to offset rising prices.
But for those Americans who’ve fallen through the cracks, two years of outsize inflation and the highest interest rates since the early 2000s have upped the stakes of being unemployed. Buying groceries costs 25% more than it did at the beginning of 2020, while used-car prices are up 35% and rents are up roughly 20%, according a recent Bloomberg analysis.
In Coventry, Rhode Island, Richard Dorgan lost his $57,000-per-year job with a Medicare and Medicaid consultant in June. He’s scraped by ever since: The weekly $600 he got for several months from unemployment benefits couldn’t keep up with the cost of car insurance, which has soared to more than $2,000 a year for him and his wife, on top of rises in their energy, phone and cable bills.
Dorgan, 64, is looking for a remote job so he can continue to help care for his wife, who has health problems. Hiring managers “are just sitting and waiting for the ideal candidate to come along,” he said.