For more than a year, the number one complaint I’ve fielded from businesses across Maryland’s First District and from the greater business community nationwide was that they cannot find employees to hire. The problem? These small businesses and employers quickly discovered it was very difficult to compete with the overly generous federally-supplemented unemployment benefits instituted last March. In fact, a Congressional Budget Office report found 80% of those receiving the $600 per week federal supplement were earning more on unemployment. Furthermore, the need to seek a job to receive benefits was waived. This was and continues to be a real challenge to our ability to re-start our economy, and employers are fully justified in their frustration.
This public policy failure could and should have been avoided. What started as temporary and well-intentioned, became a never-ending, misguided, ongoing policy punishing the American economic engine simply to sustain the liberal dreams of universal government-provided “income.”
The effort versus return calculation made by those on unemployment and not actively seeking a job is real. Unemployment insurance was never designed as substitute for income – it was designed to serve as a bridge for those losing employment as they searched for new employment. This was one of the principal issues I had with the Cares Act back in March 2020, when this policy was started. Given our current inflation indicators, the implications are even more dangerous.
Thankfully many governors have instituted or reinstituted work-search requirements for those claiming unemployment; thankfully Governor Hogan is among them. Others have even gone so far as to stop accepting the current $300 federal unemployment supplement altogether, which has played out well in those states in getting people back to work and lowering the unemployment rate.
While the handwriting is clearly on the wall, instead of working on a bipartisan basis to address the labor crisis, Congressional Democrats, in a mostly party-line vote, moved to again extend these benefits through September in the most recent “rescue” package. On top of that, President Biden’s staff rejected employer complaints out of hand saying: “We don’t see much evidence that the extra unemployment insurance is a major driver in people not rejoining the workforce.”
President Biden, Speaker Pelosi, and Majority Leader Schumer are wrong, and it’s hurting us all. They should listen to the growing chorus of pleas from the business community. The proof is all around us. Walk down the street of any town and you’ll be hard pressed to find a window without a “help wanted” sign hanging. If you talk to the business owners, they will tell you how hard it is to entice employees to forego their unemployment payments and go back to work.
With our current economy, and especially the threat of inflation, continuing federal unemployment bonuses is poor policy that incentivizes the wrong outcomes. Some unemployed claim that they still have concerns for their health, but COVID cases are plummeting and vaccines are widely available. Thanks to Operation Warp Speed under President Trump, we have gotten hundreds of millions of vaccines manufactured and administered, and the country is ready to get back to normal.
We’ve all seen the “help wanted” signs, we’ve all heard the ads, we’ve even felt the negative consequences as consumers. America wants to hire – big time – and it’s time Congress does its job to get those still on the sidelines back in the workforce – for everyone’s benefit.