On the End of Unemployment

It won't make jobs appear

Next month, Arkansas will end its enhanced unemployment program. This means an end not only to the extra $300 extra each unemployed person collects with their weekly payment, but also the programs that allowed self-employed people and gig workers to collect, and the time extensions for people who would normally be able to collect under the regular unemployment system for only 16 weeks, which is how long Arkansas’s benefits last. The state isn’t alone. Twenty-one other Republican governors are ending the enhanced unemployment program early, even though it was only authorized through September anyway.

The U.S. Chamber of Congress, lobbyists for big business, produced a report claiming that one in four workers was making more on unemployment than they did at their jobs, and there have been complaints elsewhere by businesses, claiming they face a labor shortage. Most economists disagree on those numbers, and, overall, the economy is still short on 8 million jobs compared to before the pandemic started. Other research has shown that, overall, many people are still reluctant to go back to work because they’re afraid they’ll get sick or because they don’t have childcare. Crucially, the special pandemic programs allowed people to claim unemployment if they were at special risk for severe Covid, if they had childcare issues because of school closings, and, recently added by the Biden administration, if their *employers* did not take widely accepted measures to make their workplaces safe, like requiring masks. You can trust that the rise in complaints about people being too lazy to work because of their government checks coincided with the new rules that allowed claimants to cite workplace safety issues as a reason they couldn’t return.

I’ve heard a number of complaints from local business owners, which doesn’t surprise me. What does surprise me is the complete and total ignorance about the unemployment system, the labor market, and how they work. The program for self-employed workers, for example, still required people to upload their tax returns. Self-employed workers use 1099s and self-reported cash income on tax returns. The fact that their loss of work is self-reported leaves room for doubt for the people who imagine the worst motivations for all people, but the state does work to verify these claims. There’s also been no evidence, through several studies, that the enhanced benefits, which in many instances still don’t match a full-time workers previous salary, are keeping people from going back to work. Gwen Mortiz wrote an excellent column about all of these issues.

The bigger issue is that more jobs became dangerous and more difficult during the pandemic, from cleaning people’s houses to working at McDonald’s. Wal-mart required one worker to spend his or her shift making sure everyone had masks on before entering the store; not a glamorous or easy job, and one in which the employee faced the potential of abuse. As the economic Heidi Shierholz pointed out, a fully functioning free market would account for this increased danger and difficulty by raising wages. Wages should rise until workers are willing to take those jobs. This is a good thing. “Notably, if pandemic UI benefits are playing a role in allowing this to happen, this is efficiency *enhancing*,” Shierholz wrote on Twitter. Indeed, this is the point of unemployment insurance in he first place. It makes the labor market less sticky, and allows for creative destruction without throwing people into poverty when they lose their jobs through no fault of their own.

And wages have far to rise. Annual incomes for many in the service industries hit hardest by the pandemic, especially leisure and hospitality, were only $20,628, and even lower for fast food and grocery workers, where there’s a wide range because so many of those jobs are part-time. It’s remarkable how quickly those workers went from “essential” to “lazy” when of a pay increase arose. It also ignores the extra work in childcare, teaching, and amateur epidemiology so many took on during the pandemic. The past year has required us all to take several jobs we were unqualified for, for which we were paid a measly $2,200 per person.

It’s disappointing to see that so many in so many poor states don’t see the benefits of free federal money flowing through their economies. It has undoubtedly helped keep some small businesses afloat, and definitely kept families safe and secure. The people who are complaining the loudest are those complaining about wages and workers anyway. Underneath all of this is an assumption that businesses are always good and that they’re entitled to others’ labor. I had hopes that the unemployment system would be forever reformed in positive ways after the pandemic—easier to use, available to more workers, longer lasting, and closer to real incomes—but it seems we’re going back to business as usual.

What I’m Recommending:

I’m still finding myself unable to concentrate on reading or really listening to podcasts, but I have enjoyed a few Great Courses about the histories of various regions of the world: India, Spain, the Barbarian empires of the steppes. If you have a monthly streaming service like Audible with access to the Great Courses, this is the most bang for your buck. It’s always one person’s view of history, but it’s a great way to get more of a basic grasp on the world we’re in. They’re also so comprehensive that you can still get the overall idea if you miss a detail or two.

What I’m Eating:

I’ve been obsessed for some time with baked oatmeal. This recipe for peanut butter and jelly oatmeal, from Ambitious Kitchen, is still my go-to. I first had it at a friend’s house, and it’s as warm and inviting as a memory. You could use real fruit if you wanted, and there are endless variations available at the same site. It keeps well in the fridge so you can make it ahead and have it for breakfast all week, and if you add a dollop of plain, tangy yogurt on top it takes it to the next level.

Cute Animal Pic of the Week:

I had a bit of free time this past week, so I used it to be a taxi service for dogs. I think Snowball enjoyed the ride. I’m certainly never getting all of his hair out of my car. I think many of you know I helped found a small nonprofit that helps low-income families spay and neuter their pets, and also helps spay and neuter community cats. If you’d like to donate, check us out.