On May 7, 2021, the New York Times published an article titled, “Job Growth Slowed in April, Muddling Expectations.”
NT Times Reporter Patricia Cohen introduced the piece with, “The American jobs machine tottered last month, confounding optimistic forecasts of the labor market’s recovery and sharpening debates over the impact of federal pandemic-related jobless benefits on the nation’s work force.”
This is no surprise to every business leader trying to hire someone right now.
I’ve spoken with so many business leaders who are struggling to hire people, and this has been going on for quite some time.
As I’ve heard over and over again, “It’s hard to compete with the government. Our government is paying people to not work.”
If you do the math, you can see why. Our government has created this problem.
Unemployment pays about 50% of a person’s wage, plus a $300 weekly federal bonus.
So, if you made $15 per hour working 40 hours per week, you’d receive $600. Half of that is $300. For unemployment right now, someone earning $15 per hour is now receiving $600 per week to not work.
This isn’t rocket science. This is grade school economics. If you give someone the same amount to not work as you would give someone else to work, you will have those who are working start to feel like they are working to help pay for the individuals who are not working.
People have this figured out.
I think our politicians making these decisions need a lesson in economics and human behavior.
Cleary, they are disconnected from reality. Don’t we want to get people back to work?
And, when you consider some politicians want to push minimum wage up to $15 per hour, this little trick will make that happen in the free market without any policy change. Maybe that’s part of some political masterpiece? The only way employers will get people to work is if they pay them significantly more than our lucrative unemployment system. Maybe $20 per hour will become the new minimum wage, and we can all look forward to paying $25 at a restaurant for a hamburger – hold the cheese (so I can save a buck or two). This will be inflation at its best.
One business leader I spoke with said that he had four employees come to him on different occasions and request to be laid off. They knew of friends and relatives receiving unemployment, and they wanted to take advantage of this same deal offered by the government. This employer is in dire need of employees, and of course, is disappointed with the situation of excessive unemployment compensation.
In another conversation with someone who owns rental properties, I was told that they had a renter who had stopped paying rent and had accumulated over $7,000 in unpaid rent. The landlord could not have them evicted due to the limitations imposed by our government due to the pandemic. So, this individual, who was collecting unemployment (paid very well), was also not paying rent. They applied for Emergency Rental Assistance, and that entire $7,000 was paid by our government to the landlord. So, this individual was getting paid to not work by our government, and they were having their rent paid by our government.
I just have one question.
Where is all of this money coming from?
Kim Stelson says
Here is a quote from today’s New York Times from Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute.
“Talk of labor shortages is everywhere. That is to say, many economic commentators and policymakers have been bemoaning the supposedly alarming reports of a lack of workers to fill the jobs vital to the continuing economic recovery. But there is always a chorus of employers complaining they can’t find the workers they need. We have to look beyond anecdotal reports to fully understand the data.
In the same way the price of a good increases when it is in short supply, a sign of a labor shortage is accelerating wage growth, accompanied by sluggish job growth. If employers badly in need of workers can’t attract them, they will raise wages to hire them away from other employers, who will consequently raise wages to retain their workers, and so on. When those measures don’t result in a substantial increase in workers, that’s a labor shortage. Absent that dynamic, you can rest easy.
As we sift through the latest jobs report, which showed the economy gained 559,000 jobs in May, three key findings rise to the surface. Bona fide labor shortages are not pervasive. The main problem in the U.S. labor market remains one of labor demand, not labor supply. And unemployment insurance — which many commentators say is keeping workers from returning to work — is bolstering the economy.”
James Nelson says
Is this a way to disguise an increase of minimum wage…. by making it necessary
for employees to pay more to fill positions.
…..$20 hamburger is coming as stated
George Rydberg says
Publisher, did you complain when the Republicans gave away all the money and the vast majority went to stock buybacks. That only helped the rich. This unemployment addition is going to people that turn around and spend it. Also in your article you used $15 an hour to figure things. In my town the vast majority of jobs that are infilled are for less than $15 per hour. Also did you wonder after the first big payout by trump who is paying for that one? Trump had the biggest increase in the debt of any president, maybe trickle down is working.
FYI- I appreciate your newspaper and your opinions even though I don’t agree with many of them.
Gary Feine says
Absolutely the best Commentary I have read in a long time. You are spot on and many people I have spoken with feel the same way. Great Job!
Mic says
Say what u want to say but its normally for the people that have to make assumptions about what the people that don’t have should do are how they are lazy is their not doing as well as the people that have been afforded the greatest opportunities to succeed in life and when the opportunity comes for the people that have less to at least get a arm out of the ditch not their whole body God for bid that but keep advocating for Big Companies and Business but want raise the minimum wage up for those struggling people I Say go to hell
Donna says
Talk to all the businesses that can’t find employees?? Ask him how man they intend to hire for a full 40 hour guaranteed work week.
I don’t know what state you are in Florida very few people get the highest amount of state unemployment. Many only get 125 then the federal amount if 300.
Get your head out of your behind and check into all these so called openings. Very few restaurants pay even minimum wage to servers. So they have to count on tips. Tips from 50% of the customers who are actually going into a sit down restaurant.
Research both sides of your stories before you soeak