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Cutting Unemployment Benefits Isn't Solving Anything

Once again, the solution is to raise people's wages!

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Photo: Spencer Platt (Getty Images)

I marvel at politicians’ and government officials’ insistence on reinventing the wheel, so to speak, to attempt to solve a problem when a much clearer answer lies in front of them. Usually, this impulse is cruel and willfully naive, as in the case of state governments cutting federal unemployment benefits in attempts to get people back to work. Thanks to new reporting from the New York Times, we can be even more certain that, in addition to it being morally reprehensible to deny people the benefits they need during an ongoing pandemic (or, really ever), it’s also an ineffective way to make those people return to the workforce. And in fact, the states that have done so may be doing worse than those that have continued to provide residents with unemployment insurance, with respect to attracting workers.

The Times reports:

Work-force development officials said they had seen virtually no uptick in applicants since the [Missouri’s] governor’s announcement, which ended a $300 weekly supplement to other benefits. And the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.

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One economist, in a vast understatement, told the Times that “what employers and what workers think is out of whack.” Of course, this is true: Workers want living wages and many companies are still being stubborn about offering them, despite the compromising position they seem to be in.

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At the Missouri job fair that serves as the backdrop for this Times report, employers lamented that there were “not enough good workers” to fill the positions they were offering. But from some attendees’ perspectives, the wages were still paltry. A woman named Elodie Nohone went to the fair hoping to find a better-paying job than the one she has now—a caregiving job that pays $15 an hour—but the employers she encountered were only offering hourly wages of between $10 and $13. “There’s no point in being here,” she said.

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Her boyfriend, with whom she is expecting a child, currently works two jobs and was hoping to find one good one with better pay. His goal is to make an annual salary of $50,000.

As the Times points out, the reasons why people may be hesitant, unwilling, or unable to return to work are multilayered and can be highly individual: Some people still fear exposing themselves to the virus, while others may still be saddled with full-time child care, for example. Cutting unemployment benefits then isn’t just callous, it’s cowardly, a way of avoiding more complex problems.

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Unsurprisingly, the economists in the Times’ report seem to agree that “wages, hours, and a short commute” matter most to workers, who, for the most part, will not (and, I would guess, cannot) work for less than $14 an hour. There are no creative approaches to these concerns; there are only the same demands that workers have been making for decades.