A national debate is arising over unemployment benefits. The sides are divided. Workers, particularly in the retail, restaurant and hospitality spaces, say that they’re not being paid well enough to take on dead-end jobs that potentially put their health at risk.
The opposing group contends that the federal government gave too much money to people, in the form of multitrillion-dollar financial aid programs that included enhanced unemployment benefits and stimulus checks mailed directly to families, which disincentivized them to work. They further state that the unemployed aren't even asked to look for or accept a job, as they are collecting benefits.
There seems to be an agreement among economists, Wall Street and consumers that we are starting to see a surge in inflation. Prices have substantially increased, ranging from food at the grocery store to lumber needed to build houses. Supply chain disruptions have caused gas prices to rise, if you can even find a station that has inventory. There is a school of thought that if workers remain on the sidelines, businesses will have a tough time serving customers and the increases in salaries will put further pressure on pushing up inflation.
At last count, about nine U.S. states announced that they will be ending participation in unemployment assistance programs, which enhanced unemployment checks by $300. The states electing to opt out of the federal program that increases payouts are largely run by Republican governors.
Contending that unemployment recipients earn more by staying home, Tennessee Governor Bill Lee joined Alabama, Arkansas, Iowa, Mississippi, Missouri, Montana, North Dakota and South Carolina on Tuesday in ending state participation in federal unemployment programs.
Lee stated, “Families, businesses and our economy thrive when we focus on meaningful employment and move on from short-term, federal fixes." Republicans were mostly against President Joe Biden’s financial stimulus programs, claiming that too much money was flooding the economy, which would cause inflation. This would end up hurting workers and the unemployed, as prices on everyday items would be more expensive.
The U.S. Chamber of Commerce, a membership organization that represents small and midsize businesses, called for the cessation of the $300 federal boost, stating, “Paying people not to work is dampening what should be a stronger jobs market.” The lobbying group believes about 25% of people are earning more with unemployment compared to working.
For many people who accept benefits, it's a reasonable decision. It's one of the safety-net programs offered by the government. Some point to major corporations, such as the airlines industry, that received billions of dollars in bailouts or the big banks that were rescued during the financial crisis. A commonly asked question is: if the big, deep-pocketed corporations get socialist type of handouts, why shouldn’t they?
The jobs in question tend to be frontline, face-to-face roles that could lead to catching and spreading Covid-19. These are also jobs in factories, warehouses, delivering food and stocking shelves. Workers in these sectors say that they’re not paid fair living wages. Due to school closing, working mothers felt forced into leaving the job market to care for their children. While you may disagree with their choices, it's understandable that some may accept the payments, wait for the pandemic to end and try to find better jobs, as the economy improves.
Biden, the architect of the $1.9 trillion rescue package that includes the extra $300, claimed that the supplement isn't to blame for the labor shortage. Interestingly, Biden, an ardent supporter of workers, asked the Labor Department to consider enacting rules that would require people who are receiving unemployment benefits to search for a job and accept one if offered. Biden said, “Anyone collecting unemployment, who is offered a suitable job, must take the job or lose their unemployment benefits.”
Alabama Governor Kay Ivey said she’s halting the state’s inclusion in the federal unemployment benefits program. Ivey disclosed, "We have announced the end date of our state of emergency. There are no industry shutdowns and daycares are operating with no restrictions. Vaccinations are available for all adults. Alabama is giving the federal government our 30-day notice that it's time to get back to work." She’s also requiring work-search requirements for benefit recipients.
Governor Mike Parsons of Missouri announced, "While these benefits provided supplementary financial assistance during the height of Covid-19, they were intended to be temporary, and their continuation has instead worsened the workforce issues we are facing." Parson said that he’ll end the extra benefits. "It's time that we end these programs that have ultimately incentivized people to stay out of the workforce," said the Missouri governor.
Economic Policy Institute’s Josh Bivens and Heidi Shierholz claim, “Cutting pandemic UI benefits now, as some states have done or are considering, will not just hurt workers who are depending on federal benefits while they cannot find work or are unable to work, it will also drag on the economy, as those benefits are supporting spending.”
Federal Reserve Governor Lael Brainard sympathized with the unemployed, stating, “People do actually want to go back to work; they are willing to do that.” Brainard said that school closures have caused parents to look after children and unable to look for jobs. It was pointed out that Covid-19 continues to claim lives and only around 25% of the population have been fully vaccinated.
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Nine States Say They Won’t Accept The Extra $300 Unemployment Benefits, Claiming It's A Disincentive To Getting A Job - Forbes
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