The day before Friday’s disappointing jobs report, South Carolina Gov. Henry McMaster followed Montana Gov. Greg Gianforte in calling on their respective states to end their participation in covid-related unemployment programs.
The Bureau of Labor Statistics report, which comes out the first Friday of every month, apparently caught financial wizards by surprise with its unexpectedly low numbers. Employers created only about one-fourth of the 1 million jobs economists had been expecting. Reacting to the numbers, many commentators were careful not to say what was obvious to McMaster and Gianforte: Giving away money and other goods has a predictable and undesirable effect on human incentive.
Both governors plan to end their participation in the extra $300-a-week benefit that Congress and the Biden administration extended until Sept. 6. In Montana, where combined state and federal unemployment benefits came out to around $600 weekly — and the minimum wage is $8.65 an hour — well, you do the math.
Now, Montana workers will receive one-time, state-funded bonuses of between $600 and $1,200 for returning to work and staying in the workforce for a month.
Though I hesitate to use the word socialism, larded as it is with potential for hysteria (on both sides of the political arena), Americans are being schooled in what socialism looks like, how it operates and how easily some people can be lulled into complacency. The gentle caress of the benevolent hand of Big Government slowly becomes the grip of dependence.
I don’t want to overstate the case. One of Ronald Reagan’s favorite gags was that the scariest words in the English language were, “I’m from the government and I’m here to help.” It was a good line and conservatives loved it.
But covid-19 forced even the strictest fiscal conservatives to admit that there are some things only government can do. Without government, there would have been no help for the sick and needy; there would have been no vaccine in record time; there would have been no essential stimulus aid to keep businesses afloat and the millions of unemployed Americans fed and housed in a time of desperate need. In March and April last year, the labor market lost an unprecedented 22 million jobs. Since then, more than 14 million jobs have been restored, or about 63 percent of what was lost.
Finding people to take jobs as they reappear, however, has become daunting if not impossible, particularly at the lower end of the pay scale. Ask almost any employer and you’ll hear the same: There are plenty of jobs but filling them is another matter. In South Carolina, where tourism matters and the hospitality industry has been hardest hit, 80,000 jobs are currently available, according to the governor’s office. Restaurants can’t stay open without servers and other staff who, thanks to the extra stimulus money, don’t see the point of working. The same goes for hotels and other establishments.
There is certainly no shame in taking government help when it is needed. But liberals may be hoping the new-wage expectations brought on by the stimulus aid will force lawmakers into raising the federal minimum wage to $15 an hour when the pandemic ends. But, alas, nothing is free; higher wages inevitably will result in higher prices; and no one seriously thinks this Congress is going to raise the minimum wage.
Some of the reasoning behind continuing stimulus and other supplemental funds, meanwhile, is pinned to people’s understanding of covid-related health risks. While conservatives have tended to play down the risks of infection — often to the point of absurdity — liberals are slow to let go of the dangers despite the rise in vaccinations and scientific evidence that it’s safe to go and play outside. Today, roughly half of all American adults have received at least one shot of a vaccine. I suspect the same folks who blasted conservatives for being allergic to science remain the most afraid of infection.
Political scientist Marc Hetherington, who has studied public attitudes toward covid-19, found last year that a third of “very liberal” people were “very concerned” about becoming seriously ill from covid-19, compared with a quarter of both liberals and moderates. Today, even though public health advice has begun shifting — and the infection rate was reported Friday at its lowest in seven months — progressives I know remain concerned.
The governors know what the economists are only now just sensing. Economic incentive is what drives human beings. What began as a helping hand now looks like an incentive to take a nap. For the economy’s sake, let’s get vaccinated and back to work.