by oldedude on February 15, 2023 4:11 am
That's maybe an over simplification. Long story short, it's a continuation of benefits started during COVID.
Clearly, to use Keynesian terms, employment in the United States is not suffering from an “aggregate demand” failure. There are plenty of job openings; it is a failure of a good number of employable people not being interested in filling the slots employers would like to fill. Why?
A number of commentators have suggested that many are still concerned about and fearful of returning to the workplace due to the potential of still catching the coronavirus and the risk of serious illness or death. Some have argued it’s because employers are too cheap; that is, they are unwilling to pay a wage high enough to draw unemployed workers back into the active labor force. The problem with this latter explanation is that it does not make clear why wage “x” at which some of these workers were willingly employed 15 months ago is now unacceptable just a little bit more than a year later, given the lost income experienced during all that time.
However, suppose that before the coronavirus lockdowns and lost employment, a low-skilled employee was making, say, $500 a week. But now let us suppose that during the last 15 months, due to extended unemployment insurance payments and supplementary federal emergency transfers introduced during the coronavirus crisis, this person was continuing to have a government-supplied weekly income of $500, or maybe even more, say, $600. For as long as this continues, what is the incentive for him to return to the workplace for the previous salary when, instead, this individual can stay at home and be no worse or maybe even better off than working his old 40-hour week as before March of 2020?
A few weeks ago, the Foundation for Government Accountability (FGA) issued a report based on work and wages versus government income-transfer programs (state unemployment insurance, supplemental federal emergency insurance bonus, child care credits, earned income tax credit, and food stamps) in, for instance, the state of Florida. A person could receive up to the equivalent of a $20-an-hour wage by staying home rather than accepting available employment.