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Monday, August 3, 2020

Yes, that extra $600 a week in unemployment removes incentives to work

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It’s taken for granted that a good portion of what you see reported and discussed in the national media is a lie, but every now and then they tell a lie so absurd that you wonder if they truly hate their audience.

The latest example in this never-ending saga comes from Jamelle Bouie at the New York Times, who, like every other liberal, has never seen a welfare program he doesn’t think everyone should be entitled to. He wrote with a straight face Friday that there is “no evidence” that the extra unemployment money people got as part of the first relief bill had the unintended consequence of “keeping people who want to work from working.”

That flies in the face of not only personal experience, but also the Congressional Budget Office’s projections, and documented testimony from plenty of people who saw this exact problem play out first hand.

Two-thirds of workers who went on unemployment benefits during the shutdown were making more money than before they had been laid off. Some saw their income increase 200% with the relief money.

Of course it would be difficult to make them go back to work to make less money than they can make by not working. If your job pays $12 per hour, it’s already somewhat tempting to take $10 an hour for not working. But when you’re offered $15 an hour not to work, why would you even consider working for just $12?

The evidence is everywhere that workers make the rational choice when posed with those two options.

  • “We are still running at reduced hours at the height of our seasonal busy season. We are having a difficult time finding anyone willing to come off unemployment.”— Shaun Parrish, market owner
  • “The owners of The Crown Shop, a card and gift retail store in Little Rock, Arkansas, are planning a scaled-back reopening for Monday, but they are struggling with asking their employees to come back to work for less money than they are receiving in unemployment insurance.”— NBC News
  • “[Sean Kennedy, vice president of public affairs for the National Restaurant Association] said restaurant owners are having to decide whether they turn their employees into the Labor Department for rejecting jobs or just turn a blind eye and look elsewhere for workers.”— NBC News
  • “She wants to return to work, but being stuck at home has given her time to reflect. The extra money she receives in unemployment benefits has made her conclude she had been underpaid at her previous job, earning $10.30 an hour after five years.”— Wall Street Journal

These anecdotes aren’t proof on their own — CBO’s analysis provides the closest thing to proof. But each one is evidence. Does Bouie even read the newspapers?

Read More at Washingtonexaminer

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