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?