A good worker is hard to find


A pedestrian walks past a Now Hiring sign outside a Lamps Plus store in San Francisco on June 3.


Justin Sullivan / Getty Images

A wide distribution of vaccines and the end of government blockades should lead to strong job creation. Still, the US labor market posted its second disappointing result in a row in May, according to the Labor Department report on Friday. This is what happens when the government pays Americans not to work.

Employers created 559,000 net new jobs in the month, which sounds good until you notice 1.5 million fewer workers in May said they couldn’t work because their employer closed or lost business due to the pandemic. Most of these workers should have found a new job, but they did not.

The civilian workforce fell by 53,000 in May and the number of working men over 20 fell by 8,000. The participation rate fell to 61.6%, even as the unemployment rate fell from 6.1% to 5.8%.

All of this confirms that it is increasingly difficult for employers to find volunteer workers. The first weekly jobless claims are down and this week fell below 400,000 for the first time since the early days of the pandemic. But continuing claims have declined little since March.

Which give? Occam’s razor-sharp explanation is that in March the Biden administration and Congress paid Americans another mountain of money – the work is not required. The extra $ 300 a week in improved unemployment benefits is a problem because millions of Americans can earn more by staying on the couch. This unemployment benefit is not subject to payroll tax, unlike income from wages and salaries.

This is in addition to regular unemployment benefits, as well as new or extended cash payments such as the $ 3,000 per child tax credit, additional ObamaCare grants, and $ 1,400 personal checks. Once again, no work needed.

Economists Casey Mulligan, EJ Antoni and Steve Moore estimate in a new study that in 21 states, eligible households can receive a maximum wage equivalent of $ 25 an hour in cash without working. In 19 states, the maximum allowance is equivalent to $ 100,000 per year of wages for a family of four with two unemployed parents. Not working is a rational economic choice.

Democrats were warned this would happen, but made the payments anyway. We believe they wanted to force employers to raise wages to compete with the government – a higher de facto minimum wage. And wages are increasing: 24% since March at an annual rate in leisure and hotels. It’s good for workers, but it’s pressing small businesses that are still struggling to recover from the pandemic. Some just can’t afford to pay more.

It should also be noted that this is how a universal basic income is likely to work in practice. The wage or salary threshold required for workers, especially young and unskilled workers, to enter the labor market would increase significantly. Add in travel and other expenses as well as lost leisure time, and more people will choose not to work. This means less opportunities to climb the income ladder and more dependence on government. Progressives probably intended to do it too.

The good news is that so far 25 states have said they will stop accepting the enhanced $ 300 unemployment benefits this month or next year. No Democratic-led state has done so, but no less than President Biden said on Friday he was comfortable if the grant for not working ends on Labor Day as scheduled. It’s high time.

Wonder Land: By paying people not to work, Biden’s Democrats will damage America’s work ethic for a generation. Images: Getty Images / iStockphoto

Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Published in the print edition of June 5, 2021.


About Christopher Easley

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