The Washington PostDemocracy Dies in Darkness

No, unemployment benefits don’t stop people from returning to work

Study after study has debunked the myth that emergency benefits keep people out of the labor force.

Hiring signs are posted outside a gas station in Cranberry Township, Pa., on May 5. (Keith Srakocic/AP)
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Last week’s U.S. jobs report, which saw far fewer hires than expected, reignited an old, long-simmering debate about whether the social safety net creates a culture of dependence in American life. Too many American workers, the argument goes, would rather stay home, play video games and collect unemployment than go back to work. And the rest of us are suffering as a result.

“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” Neil Bradley, executive vice president and chief policy officer of the U.S. Chamber of Commerce, said last week. “We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions pose to our economic recovery from the pandemic.”

This is more than just a pro-business lobby spouting a pro-business line. Late last month, Rep. David Rouzer (R-N.C.) tweeted an image of a Hardee’s restaurant that had apparently closed because of a staffing shortage. “This is what happens when you extend unemployment benefits for too long and add a $1400 stimulus payment to it,” Rouzer wrote. “Right when employers need workers to fully open back up, few can be found.” Republican House Leader Kevin McCarthy was a bit less subtle, tweeting that Democrats “have demonized work so Americans would become dependent on big government.”

The pandemic is completely changing the way we treat unemployment insurance

The main problem with this line of thinking is that it simply isn’t true and, perhaps, holds less water than it ever has. In the past year alone, study after study has debunked the myth that the emergency benefits and occasional payments provided by the government are disincentivizing people from returning to the labor force en masse. “We find no evidence that high UI [unemployment insurance] replacement rates drove job losses or slowed rehiring,” read one study by Yale economists last summer, back when enhanced federal unemployment benefits were $600 a week — or double the current amount. In a separate study of unemployed workers without a college degree last year, Arindrajit Dube at the University of Massachusetts at Amherst, found no evidence that the additional pandemic compensation passed under the Cares Act last year “held back the labor market recovery.”

Then there is the reality that, even with help from the government, a large segment of jobless Americans aren’t receiving enough money from unemployment benefits to actually get by. According to a Census Bureau survey last month, nearly 1 in 3 Americans on unemployment said they were still failing to cover routine expenses such as food, housing and medical treatments. That’s not to say the rest of those on pandemic assistance rolls are coasting either. Of the recipients of jobless benefits with children, roughly 75 percent reported not having enough food for their children either sometimes or often. Meanwhile, despite the highly meme-able frivolity associated with stimulus payments on social media, a study of how Americans spent the first stimulus by the Federal Reserve of New York revealed that only 29 percent of payments went toward consumption while the rest either went directly into debt repayment or savings.

To substantiate a point about benefits, the U.S. Chamber of Commerce also touted its analysis claiming that 1 in 4 Americans takes in more money from unemployment benefits than they would have by working. According to the Labor Department, the average unemployment recipient receives more than the equivalent of full-time work at $15 an hour. But these figures tell us a lot more about American employers than it does about American employees.

This is why when we talk about the recovery and the return of the low-wage workers who were disproportionately affected by pandemic unemployment, we should be looking at the jobs on offer and not the people. Before the pandemic, the state of hourly work was fossilized by a federal minimum wage standard that hasn’t budged in more than a decade along with real wages that haven’t moved in over 40 years. Instead of supporting comprehensive benefits, lawmakers in some states introduced ostensibly progressive initiatives such as predictive scheduling, which ensured that some hourly workers could, at least, know their work schedule more than a few hours ahead of time so they could plan their lives and secure child care. In the shadow of an unparalleled public health crisis, the default factory settings for American workers seem even more absurd. And yet, these conditions have only changed in a few cases since the pandemic began and, in many instances, have only gotten worse.

Allowing unemployment benefits to expire is political and economic malpractice

It’s an all-time understatement to say the professional lives of service workers and retail employees grew exponentially less sustainable during the past year. Across the country, hourly workers have been tasked with enforcing mask mandates and have been attacked, harassed and even shot at for protecting themselves and other customers from a public health crisis. (Back in August, Illinois took the extraordinary step of passing a law that would make it a felony for someone to assault a worker for enforcing a mask policy.) Workers have labored long hours through supply shortages and shifting and often lax safety protocols, often without hazard pay or basic benefits like sick leave or health insurance, all in the middle of a pandemic.

As the country slowly begins to reopen, workers shouldn’t be shamed or punished for not returning to industries that haven’t materially improved work conditions from their pre-pandemic standards. A glut of low-wage job openings isn’t a sign of American laziness; it’s a sign of self-preservation. And it’s a clear signal that businesses need to make jobs more attractive, especially after a year in which 90 percent of the biggest American companies turned a profit while over half of the same companies laid off tens of thousands workers.

Of course, the irony is that so many of these front-line jobs just months ago were being heralded as “heroic” and “essential.” It’s more than past time for employers to treat them that way.

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