Labor Secretary rejects claims that enhanced unemployment benefits are keeping workers on sidelines

After a hugely disappointing April jobs report, U.S. Labor Secretary Marty Walsh rejected claims from Republicans and some businesses that enhanced unemployment benefits are keeping workers from going back to work.

The Labor Department reported the U.S economy added back just 266,000 jobs last month, sharply missing economists' expectations of 1 million.

"266,000 jobs under normal circumstances — and we're certainly not living in normal circumstances — would be a good month," said Walsh in an interview with Yahoo Finance Live. "We still have a steep hill to climb, but we are recovering in a strong fashion."

Walsh noted job gains in leisure and hospitality and an increased number of people looking for work as "positive signs" in the April report.

Republicans argue the weaker-than-expected job growth bolsters reports that employers are unable to find workers because they're making more money while collecting unemployment insurance.

“This is a stunning economic setback, and unequivocal proof that President Biden is sabotaging our jobs recovery with promises of higher taxes and regulation on local businesses that discourage hiring and drive jobs overseas," said Rep. Kevin Brady (R., Tx.), the top Republican on the House Ways and Means Committee.

After the jobs report was released, the U.S. Chamber of Commerce called for an end to the weekly benefits boost, saying it was "dampening what should be a stronger jobs market."

Sen. Roger Marshall (R., Kan.) plans to introduce legislation to repeal the extra $300 per week, which is set to expire in the fall.

"We still have millions of Americans out of work. Those millions of Americans, many of them would prefer to be working in a job than collecting unemployment because the unemployment is a short-term benefit that's going to run out," said Walsh. "These people would like to get back to their careers, get back to their jobs, find new opportunities."

Montana and South Carolina recently announced they'd be dropping enhanced federal benefits as the economy begins to open up again.

"There are certain areas that seem to be rebounding or doing better, less virus infection and everything's opening quicker. So again, you can't compare each state to each state. You have to take it one at a time," said Walsh. "In a lot of urban area[s], we're going to see higher unemployment numbers. We're going to need those benefits, those UI benefits, so families can survive and keep food on the table."

Walsh noted he is especially concerned about high unemployment among Black Americans and women who aren't returning to the workforce.

Walsh told Yahoo Finance fear of the virus and a lack of childcare options while some schools are still operating remotely could also be keeping Americans from going back to work. Biden's American Families Plan calls for universal pre-school and measures to make childcare more affordable.

"We just need to continue to see what the barriers are. I don't think the barrier to employment is unemployment insurance," said Walsh. "Whether it's childcare, whether it's fear of not being vaccinated, fear of the virus, your business being gone — those are the issues that we have to address, not talk about cutting a benefit for people that are unemployed."

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

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