Weekly unemployment claims fell again to a new pandemic low of 444,000, but Republican governors keep scapegoating jobless people as they cut off the federal unemployment aid supplement, claiming that $300 a week is keeping people from applying for jobs. Texas, Oklahoma, and Indiana have joined the states that will be ending that aid boost, bringing the total number of people affected by the cutoffs to around 3.7 million. The Biden administration has looked for a way to step in and do what the Republican-controlled states are refusing to do, but the Labor Department has concluded it has no legal recourse.
This is happening while there are still 8 million fewer jobs in the economy than there were in February 2020. And by the way, the added $300 a week in unemployment benefits has only a very small effect on whether people look for work, another study confirms.
“From the perspective of the first week of June 2020, with 8 weeks of supplementary UI payment remaining and as states were moving to re-open their economies, only workers in the lowest paid occupation (food services, with typical earnings of $460 per week) would be about indifferent between accepting an offer and remaining unemployed,” according to a working paper from the Federal Reserve Bank of San Francisco. “The value of a job, especially in a depressed labor market, significantly outweighs the value of the temporary additional UI income.”
The additional $600 a week passed by Congress in the early months of the pandemic would have a “moderate effect” on whether people took jobs, the authors estimated, but $300 a week has just a “small effect.” Small as in if you have 28 people and seven of them get job offers, one would turn it down because they were getting that extra $300 a week.
This is not the first study to find that the Republican claims about too-generous unemployment benefits keeping people from the workforce are false. One by Yale economists found that at the $600 level, there was “no evidence that high UI [unemployment insurance] replacement rates drove job losses or slowed rehiring,” and one by a University of Massachusetts economist focused on workers without a college degree, which did “not provide evidence supporting the claim that the [Federal Pandemic Unemployment Compensation] has held back the labor market recovery.” Additionally, since Census Bureau data finds one in three people on unemployment saying that they are still having trouble paying for basic necessities, the whole “people are so comfortable getting unemployment checks that they have no incentive to work” message is way off base.
Republicans aren’t letting any of that get in their way—not the dropping levels of new unemployment claims, not the gap that still exists between the number of jobs now and the number of jobs before the pandemic, not the studies showing that $300 a week is not keeping people out of the job market. Creating a desperate labor force for employers to push into low-wage, no-benefit jobs is a Republican wet dream, and they’re hoping to take it to completion. Millions of jobless workers will pay the price.