Reason Roundup

States Hope Labor Shortage Will Shrink as They Ditch Federal Unemployment Benefits

Plus: Remembering "sexual-subculture pioneer" Pat Bond, debunking gender gap hyperbole around jobs, and more...

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sipaphotoseleven718167 | Jason Bergman/Sipa USA/Newscom
(Jason Bergman/Sipa USA/Newscom)

Programs "accomplished their goals but are now counterproductive." As Congress debates whether to extend federal unemployment benefits past September and economists debate whether these benefits are now keeping Americans from seeking jobs, some states are going ahead and opting out. Nine states so far have said they will drop out of the federal unemployment benefit programs.

The Federal Pandemic Unemployment Compensation program provides $300-per-week checks to unemployed Americans, which people can receive in addition to any state-provided unemployment benefits. The money was meant to help people put out of work by COVID-19 and shutdown mandates.

Now that vaccination is possible and America is largely open for business again, unemployment should be dwindling—and it has been. But not as much as economists and political leaders think it should. Meanwhile, some businesses across the country say they're having a hard time hiring because people earning under a certain wage threshold may make more—or at least a comparable amount—through unemployment than through going back to work.

"Even though Secretary of Labor Marty Walsh argues that the federal unemployment supplement does not contribute to a lower willingness to reenter the workforce, there is abounding anecdotal evidence that the $300 a week addition to state unemployment pay dampens worker enthusiasm," as Bruce Yandle wrote at Reason earlier this week.

Folks on the left suggest that this just means businesses need to pay more. Many have already been doing this—"the average hourly rate in the hospitality sector is up roughly $1 compared to the pre-pandemic going rate," notes The Washington Post, and "warehouses have hiked wages by more than a dollar and now pay $26 an hour on average." But a lot of employers—especially small businesses of the sort progressives claim to support—already operate on very thin margins and simply can't afford to compete with what people are currently making for not working.

In other words, it's not that companies aren't paying workers what their labor is worth but that the government has distorted the incentives, forcing employers to compete for workers with not just other employers but also with getting government benefits for nothing.

Unemployment benefits helped many during the height of the pandemic and associated lockdowns, and can still be an important stopgap measure for people who lose their jobs. But when the state provides indefinite payments that outpace many employee earnings, they go from help to hindrance. That's the argument being put forth by leaders in Alabama, Arkansas, Iowa, Mississippi, Missouri, Montana, North Dakota, South Carolina, and Tennessee.

"We will no longer participate in federal pandemic unemployment programs because Tennesseans have access to more than 250,000 jobs in our state," the state's Republican governor, Bill Lee, posted yesterday on Facebook. "Families, businesses & our economy thrive when we focus on meaningful employment & move on from short-term, federal fixes."

"Regular unemployment benefits will remain available, as they did before the pandemic, but it's time for everyone who can to get back to work," Iowa Gov. Kim Reynolds, also a Republican, tweeted yesterday. "Our unemployment rate is at 3.7 percent, vaccines are available to anyone who wants one, and we have more jobs available than unemployed people."

"After fighting through severe stress and financial hardship, many North Dakota businesses that survived the pandemic are now facing an unprecedented labor shortage as they attempt to recover," said North Dakota Gov. Doug Burgum (R) in a statement. "These federal unemployment programs were meant to supplement state benefits and provide short-term relief for displaced and vulnerable workers, and these programs have accomplished their goals but are now counterproductive."

Governors of the other states ditching federal unemployment compensation have said similar things.

Supporters of the extra federal benefits argue that it's fear of catching COVID-19 that has kept people away from many jobs. But this argument has made less and less sense as vaccines have become widely available.

FREE MINDS

RIP Pat Bond. "To cultural historians, anthropologists, sex educators and members of the now sprawling alternative-sex community known by the umbrella acronym of B.D.S.M. — for bondage, dominance, sadism and masochism — or by the more prosaic (and historical) term 'kink,' Pat Bond, to use the pseudonym he preferred, was a foundational figure, applauded at conferences, noted in academic papers and hailed as an elder by those who shared his interest in role-playing sex," Penelope Green writes.

FREE MARKETS

The gender gap in pandemic job losses has been wildly exaggerated. The scope of the gender gap in pandemic employment woes has been smaller than many have made it out to be:

In April 2021, the labor force participation rate for U.S. men 20 and older was 69.8 percent, down from 71.6 percent in February 2020. For women, it was 61.7 percent in April, down from the 63.3 percent in February 2020. So, while women's labor force participation was lower than men's at the start of the pandemic and still is, women are now slightly closer than men are to their pre-pandemic participation level, with the April 2021 labor force participation rate for men 1.8 percentage points lower and the rate for women down 1.6 percentage points.

I dig into more of the numbers—and the hyperbole surrounding them—here.

QUICK HITS

• How a prominent sex trafficking "rescue" group is harming children.

• Cops wrecked a home, terrorized a family, and assaulted a man. It was the wrong place.

• Robert Aaron Long, the suspect in fatal shootings at three Atlanta-area massage parlors, has been indicted on four counts of murder, four counts of felony murder, five counts of assault with a deadly weapon, four counts of possessing a firearm while committing a felony, and one count of domestic terrorism.

• The Department of Homeland Security has established a "new, dedicated domestic terrorism branch within the department's Office of Intelligence and Analysis."

• "The rate of new Covid cases in the U.S. fell to an average of 38,800 per day Monday, according to data compiled by Johns Hopkins University, the first time daily case counts have been below 40,000 since September," reports CNBC.

• "Those worried about the implications of a nation not going back to work should make it a higher priority to loosen occupational licensing laws that literally and intentionally prevent many Americans from being legally able to perform certain jobs even if they are yearning to do so," writes Reason's Brian Doherty.

• Keep this in mind the next time mainstream media and politicians start declaring themselves the arbiters of disinformation:

• Vaccine passports "seem destined to be part of life long after the reason for their existence is gone," laments J.D. Tuccille at Reason.

• Today in great examples of politicians being out of touch: