08.06.2021 0

Unemployment rate drops as incentives to stay unemployed end

“It is evil to encourage people to choose unemployment over work.” 

By Richard Manning

The July 2021 Bureau of Labor Statistics jobs report (BLS) shows the Democrats’ policy of giving extra COVID payments to the unemployed is keeping people out of the work force. It is evil to encourage people to choose unemployment over work.

Even as the number of unemployed in America dropped by 782,000 in July, the BLS reports that a whopping 560,000 of these coming from the roles of the long-term unemployed. This rapid decrease in unemployment coincides with many states ending the extra COVID related payment of benefits to the unemployed as those payments were blamed for the unemployed staying on the sidelines of the labor market.

The number of unemployed unfortunately remains 2.3 million higher than in February 2020 demonstrating that even in a robust jobs market.  It can be expected that many of these people will get jobs as the extra payments end in the months ahead. The sad part is that this process has been artificially delayed due to the refusal of the Biden administration and Congress to end the unnecessary extra payments which were originally intended to get people over the hump caused by the economic shutdown due to the China virus.

Conversely, and much more concerning in the report, is the increase by 276,000 people to 2.3 million of Americans who find themselves unemployed for less than five weeks.  With employers begging for workers, the fact that 276,000 people were added to this number of recently unemployed is somewhat confounding.  It is reasonable to ask how more than a quarter of a million more people became newly unemployed in July above the already inflated June number?

We don’t know this answer, but if the short-term unemployment number continues to rise and these people remain unemployed in August, this could be the first tremor of a shifting workforce earthquake.

Looking ahead on the broader labor policy front, it is reasonable to expect that when the massive extra federal subsidization of unemployment comes to an end, the summer of labor shortages will also end, bringing millions more back into the labor force in early fall.  But this will only occur if the politicians resist the urge to re-engage the failed health policies of economic shutdowns. The science shows that economic shutdowns had no effect on health outcomes from the virus while causing increases in preventable deaths across the board.  If states shut down again, the July unemployment numbers may be viewed as the high water mark of the COVID economic recovery.

And as Congress faces the end of the extra COVID unemployment payments, it is essential that they end.  As they are both economically and personally destructive.  Any attempt to reinstate these payments must be vigorously opposed by people on both sides of the aisle who want to promote both a healthy workforce and healthy American ethos.

Richard Manning is President of Americans for Limited Government.

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