Helping Or Hurting People Back To Work? That’s The Question

Rep. Lauren Boebert (R).

With business ramping back up to capacity and COVID-19 restrictions easing, a number of Republican state governors have announced they will stop distributing the supplemental federal unemployment aid provided by COVID relief legislation, in an effort to “encourage” their state’s population to get back to work:

At least 23 GOP-led states have announced this month that they will be ending enhanced unemployment benefits early. This includes the $300 a week supplemental benefits, as well as in nearly all cases the program for gig workers and self-employed individuals who do not qualify for traditional unemployment and the program for those facing long term unemployment. The state leaders claim their states have plenty of jobs and the benefits deter people from working.

Earlier this month, Rep. Lauren Boebert proposed the same solution, take away those terrible “unemployment bonuses” and the workers will scurry back to their low-wage status quo ante:

But the presumption held by these Republicans to justify cutting off these benefits doesn’t wash in the real world.

In the past year alone, study after study has debunked the myth that the emergency benefits and occasional payments provided by the government are disincentivizing people from returning to the labor force en masse. “We find no evidence that high UI [unemployment insurance] replacement rates drove job losses or slowed rehiring,” read one study by Yale economists last summer, back when enhanced federal unemployment benefits were $600 a week — or double the current amount. In a separate study of unemployed workers without a college degree last year, Arindrajit Dube at the University of Massachusetts at Amherst, found no evidence that the additional pandemic compensation passed under the Cares Act last year “held back the labor market recovery.”

Once you realize that the expanded unemployment benefits paid to get Americans through the pandemic over the past year are not responsible for the “labor shortage” Republicans are invoking to justify ending them, especially after being cut in half last December, the wisdom of doing so because deeply questionable. For one thing, people receiving unemployment benefits still have to look for work. But more importantly, Republicans are operating on a false (not to mention heartless) presumption that Americans simply don’t want to be productive members of society, and ignoring the larger reality that many of the low-wage jobs employers are having trouble filling right now don’t pay enough to meet basic needs. The result is even more economic pain needlessly inflicted on their constituents.

So what do you do if you’re a governor who values getting your economy back up and running again, but don’t want to gratuitously hurt your constituents who are barely making ends meet even with “enhanced” federal help? As the Grand Junction Sentinel’s Charles Ashby reports, you do what Gov. Jared Polis is doing and incentivize the change you want to see:

Depending on how many displaced workers take advantage of it, Gov. Jared Polis’ new program to entice unemployed Coloradans to get off the government dole and go back to work could cost hundreds of millions of dollars.

About 138,000 people are eligible for Polis’ Colorado Jumpstart Incentive program that would provide them with up to $1,600 each if they stop taking unemployment benefits and get a full-time job by the end of this month. (That amount drops to $1,200 if they go back to work in June.)

If all of them end up getting it — and state officials say it likely won’t be nearly that many — that would cost the state nearly $221 million.

Although it’s unlikely that this program will be utilized by everyone who qualifies, providing a voluntary and substantial incentive to go back to work it’s a far more humane way to help Colorado residents transition back into the workforce than simply cutting off federal unemployment assistance and forcing them to adapt. It’s the difference between policymaking intended to help people, and policy indifferent to the outcome for individual people as long as your ideological objectives are met. Meaning policy that’s okay with hurting people.

The choice for voters should be easy, but unfortunately there’s a lot of presumption out there.

2 Community Comments, Facebook Comments

  1. davebarnes says:

    Every article I have read on this subject basically says: we don't know why there is a labor shortage.

    Personally, I blame kumquats.

  2. JohnInDenver says:

    it would be interesting to know how much money would be spent if (when) those on unemployment insurance do NOT go back to work.  at $400 per week, pushing people to get a job pays off in 4 weeks (for May) and 3 weeks (June).  Add on whatever benefit there is from the worker and employer making contributions to the UE fund and the payback time declines a little more. 

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