Only about 61 percent of the adults in
Montana are employed
at the moment. That leaves more than 300,000 who aren’t working. So I was
surprised when the state’s Republican governor, Greg Gianforte, declared in May
that Montana is experiencing a “labor shortage.”
اضافة اعلان
In capitalist countries, the standard remedy for labor
shortages is to recruit workers by offering higher wages or other inducements.
Gianforte has a different plan in mind. Beginning June 27, the state will reduce
weekly payments to unemployed workers by $300, cutting off a federal subsidy
that was scheduled to run through early September.
This struck other Republican governors as such a good idea
that 23 other states have since announced plans to follow Montana’s example.
Together they intend to reject more than $26 billion in federal aid payments to
4.5 million unemployed workers — money that would have helped those workers and
surely would have been spent mostly in those states.
A lot of people are going to get hurt, and the pain will not
be distributed randomly.
States administer unemployment benefits because racist
Southern senators in the 1930s and the 1940s prevented the creation of a
federal system. Almost a century later, Southern states still operate the
stingiest unemployment programs. In recent years, for example, unemployed
workers in New Jersey have been roughly five times as likely to qualify for
jobless benefits as those in North Carolina. The benefits in New Jersey are
larger and last longer, too.
The legacy of the racism that infected so many of the New
Deal’s achievements is particularly bitter for Black workers, who continue to
live disproportionately in the states that provide the least aid to those who
lose their jobs. During the last recession, only 23.8 percent of unemployed
Black workers received benefits, compared to 33.2 percent of white workers,
according to a 2012 analysis by the Urban Institute. Those who qualify for
benefits also get less money. On average, the 11 former Confederate states
replace just 40 percent of lost wages, compared to an average of 46 percent in
the rest of the United States.
The supplemental federal payments have temporarily lifted
all boats, raising the average weekly payment in the stingiest state,
Mississippi, above the precrisis average payment in the most generous state,
Hawaii. But in the coming weeks, as blue states continue to accept federal
funds while red states stop, the gap will yawn wider than ever.
Although
Americans generally agree that government should
not act with racist intent, the unemployment safety net was designed with
racist intent. And it continues to work in the way that it was designed,
allowing Mississippi to badly serve Americans who live there.
The creation of a federal system to provide aid to jobless
workers is long overdue.
Under a federal system, maintaining supplemental payments
through the summer would be an easy call. The federal government has provided
money to bulk up state benefit programs during every economic downturn since 1958
because benefits are calibrated for normal times, replacing about half of lost
salary to strike a balance between carrying people through trouble and
encouraging them to look for work. During a downturn, it makes sense to provide
more help. During the COVID-19 pandemic, those supplemental payments —
initially $600 a week, more recently $300 a week — have kept millions of
Americans from poverty.
For opponents of the federal supplements, any evidence the
payments are allowing people to stay out of the job market or are driving up
wages is seen as damning.
To justify Gianforte’s decision, Montana retailed stories of
a Kalispell coffee shop that closed because it couldn’t find enough workers and
a Missoula bakery that is struggling to hire even after raising its base wage
to $11.50 an hour from $10.50 an hour.
Some defenders of the payments have fallen into the trap of
arguing that any effect on the behavior of workers is insignificant.
They may be right. While it’s common sense that a person
getting more federal aid has less need to work, less is not the same as none.
For people who are out of work, the federal aid is just one factor among many.
Some people already are searching assiduously. Others have sufficient reasons
to wait, like worries about workplace safety or child care.
There is no evidence of mass lollygagging. Indeed, the data
runs in the other direction. Federal payments have not altered the gaps among
states; everyone is simply getting more. And the Labor Department reports no
sign of slower job growth in more generous states.
But proponents of the federal payments are still fighting
the wrong fight. Unemployment benefits and Social Security, created by the same
1935 law, were intended not just to help those who couldn’t find work and to
allow older Americans to retire. President Franklin Roosevelt and his
lieutenants knew that a stronger safety net would drive up wages. They
understood that helping those who weren’t working would help those who were working,
too.
In recent decades, the federal government has allowed states
to chop away at unemployment benefits, driving desperation up and wages down.
Nationwide, the share of jobless workers who succeeded in obtaining
unemployment benefits fell from 44 percent in 1980 to about 28 percent in 2019,
according to the WE Upjohn Institute for Employment Research.
The average amount that workers got, relative to prior
wages, has also been in steady decline.
This state of affairs ought to be intolerable even when the
economy is growing. The federal government should set stronger minimum
standards for unemployment benefits.
Losing a job is always a crisis for the people who lose the
job. It doesn’t matter how many others lost jobs that week. And it shouldn’t
matter what state they live in.
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