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Focus on Better Jobs, Not Better Jobless Benefits

Focus on Better Jobs, Not Better Jobless Benefits

Emergency unemployment benefits are ending this month for about 7.5 million Americans, prompting much anxiety about their fate. Even some of President Joe Biden’s aides are upset at their boss’s refusal to push for an extension of the program, telling the Washington Post that a “cutoff of benefits poses a serious danger to millions of Americans who remain out of work.”

Their boss’s more serene view is more likely correct. There is an in-the-weeds academic debate over whether enhanced jobless benefits, instituted because of the pandemic, are causing a meaningful reduction in job growth. (Short version: There are several studies showing only a modest impact on growth, and there are many commentators on the left spinning those results as showing no impact.) But the big picture is clear: After hitting a record high in June, job openings hit a new record high in July.

Whether the loss of benefits spurs those out of work to take the jobs on offer remains to be seen. But the opportunities are out there. And the question of whether jobless benefits are preventing people from working is separate from the question of whether their expiration will induce material hardship.

The news coverage last week tended to focus on the latter question — and the answer was a resounding yes. As examples of people failing to find work, both the New York Times and the Washington Post cast a wide net across the whole of … New York City.

“To just cut people off, it’s ridiculous and it’s unethical and it’s evil,” a 34-year-old freelance photographer told the Times. The Post found a video producer. “I don’t understand how anyone in Washington can not know normal people,” she told the Post, “who are going through this.”

That’s sort of the point: Freelance creative types aren’t very representative of the broader U.S. workforce. There are five food-service workers for every one person in arts and entertainment, broadly defined. (In fairness, along with an out-of-work actor the stories featured a furloughed office cleaner, a former Uber driver and a former cab driver.) A much more typical example of the current jobless is a person who used to work in a restaurant, lost their job during the pandemic, has been trying to find something better, and if necessary will decide just to go back to restaurant work — maybe pleased to see that pay has increased.

The U.S. economy is on the brink — of normalcy, not a calamity. It might not be the vision of those who yearned for Elizabeth Warren’s big structural change or Bernie Sanders’s democratic socialism. But most Americans will probably be OK with it.

Skeptics argue that the Bureau of Labor Statistics’ survey on job openings and labor turnover is not a completely reliable source. And to an extent they’re right; technology has changed the process of posting jobs, applying for them and sorting through applicants in a way that makes long-term comparisons dicey.

Still, the qualitative reporting backs up the BLS. Walmart is looking to hire 20,000 supply-chain workers, while Target and Amazon have both announced plans to increase benefits for hourly workers as they look to add staff. The Postal Service is looking to add 40,000 seasonal staff, starting now. Delta has doubled its flight attendant hiring target, while Southwest has started offering staff referral bonuses to fill open positions.

Those are big companies, but small businesses are hiring too. The latest National Federation of Independent Businesses survey finds that 49% of small companies say they have open jobs, and a plurality of business owners cite the difficulty hiring workers as their biggest problem.

There’s no need to shed tears for America’s employers of low-wage labor, and their whining through the spring and summer was unseemly. At the same time, jobs are out there — and if people need to earn money, they can.

If you’re neither a socialist nor a plutocrat, one thing to remember is that people getting back to work will help people get back to work. A popular progressive theory is that the scarcity of child care, more than workers staying on the sidelines, has been holding the economy back. But another way to spin that story is that getting child-care workers back to work will have broad benefits for many people — including other low-wage workers. The wedding industry is currently facing a hiring crisis. If catering companies can hire more servers, more people can throw more parties — and that might even mean more work for freelance photographers.

The Covid economy was genuinely scary. And the federal government’s response to it was genuinely admirable: It made the welfare state more robust. The president and congressional Democrats have proposals to make parts of that new welfare state permanent. If they get their way, it will help America be a better, more humane country.

But the pandemic unemployment insurance programs aren’t like a child allowance program or Medicaid — they give you money only if you don’t work, and in many cases they gave people more money than they could earn by working. Because of the creaky plumbing of the U.S. unemployment insurance system, that was a pragmatic way to deliver help to those in need during a public health crisis. But it’s not a sustainable way to run an economy, and by letting it expire, Biden — not for the first time — is showing more wisdom than many of the more progressive members of his party.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Matthew Yglesias writes the Slow Boring blog and newsletter. A co-founder of Vox and a former columnist for Slate, he is also host of "The Weeds" podcast and is the author, most recently, of "One Billion Americans."

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