HEADED IN THE WRONG DIRECTION

There’s a lot going on. A reality TV star doubling down on reckless behavior amid growing numbers of people catching a case of COVID. A Negro politician surfing through a mostly White and unmasked crowd and behaving as if he’s trying to get up with Herman Cain. Aging rappers thinking they can wrangle a “Black Agenda” out of an authoritarian with a long history of anti-blackness, lying, and welching on his bills. A Supreme Court nominee who, amongst other things, can’t recall the five freedoms of the 1st Amendment. Politicians tapping into an audience’s racism by “riffing” on the name of a Black woman. All of this, and more. And then there’s this: 1.3 million.

That’s the number of people who applied for unemployment insurance (UI) benefits for the week ending October 15th. If you divvy up that number, it breaks down like this: 840,000 folks applying for the regular state UI and another 464,000 registering for Pandemic Unemployment Assistance (PUA). By the way, the PUA is a federal program that ante ups some coins to people who are not normally eligible for UI, including, for instance, gig workers, the self-employed, and independent contractors. Good deal. But here’s the rub: While the PUA provides up to 39 weeks of benefits, the entire thing is scheduled to shut down on December 31st, 2020. So, come the end of the year, if you’re, say, an independent contractor whose stuff goes sour, you’d best not be counting on collecting a few coins from PUA. You’ll have to run down any savings you might have. Or hit up family members for change. Or perhaps even must depend any on some struggling charity to grab some grub to feed your face or the faces of loved ones.

Not a pretty picture.

THAT MISSING MONEY

And let’s not forget about that across-the-board $600 bump in weekly UI benefits that’s done gone missing. Or to be more direct, that Republicans in the Senate allowed to expire at the end of July. Stimulus talks are now stalled at a time when the number of cases of Corona are spiking, when talk about impending layoffs is in the air, and when millions of people are languishing in unemployment and underemployment. As noted by economist Heidi Shierholz:

This is terrible economics. For example, the extra $600 in weekly UI benefits was supporting a huge amount of spending by people who, without it, have to make drastic cuts. The spending made possible by the $600 was supporting millions of jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 dollars on lose their jobs.

Look at this way: Folks weren’t taking C-Notes and stuffing them under their mattresses. Nope. Those Benjamins were being spent. On rent. On mortgages. On food. On childcare. You name it. And every dollar spent became a dollar of income in someone else’s pockets who, in turned, spent, and created income in yet another’s pockets. Economies are deeply interconnected, not an arena of isolated or atomized individuals. As such, the aggregate impact of that $600 is multiplicative and, allowing it to expire—particularly in the case of an economic recession—is to push the economy even further in economic coma.

And in case you think I’m just blowing smoke, take note of this: There are empirical studies demonstrating the beneficial impact of that now missing $600. Take, for instance, a study done earlier this year by the Congressional Budget Office, an outfit that no one in their right mind would consider a bastion of left-wing politics. That report found that the additional $600 in benefits led to increased output and higher levels of employment. Or, peeking at it from the flip side, allowing the additional benefits to, well, go up in smoke, would not only lower output but also increase unemployment.

Multiplicative.

LEISURE LOVERS?

Some economists, however, claim that giving the jobless an extra boost in funds will only result in them in choosing “leisure” over work. Dumping some extra duckets in their pockets, so the story goes, will only cause the unemployed to cease vigorously looking for or accepting a gig. It’s bad enough that they’re receiving UI; kicking in “something extra” only further disincentivizes their job search and increases the likelihood that they’ll just chill at the crib. According to this line of argument, the last thing we need to be doing is talking about a robust stimulus plan that, amongst other things, drops duckets on households reeling for joblessness. Better to withhold such support and force them into the labor market to grab one of the many jobs available.

Nice story, I guess. But there’s a least two problems. For starters, there’s at least four times as many unemployed persons as there are job openings. So, even if everybody and their mama rejected any assistance, flooded the market, and scooped up all available jobs, there still wouldn’t be enough gigs to provide all of the jobless with employment. Millions would still be left in the lurch. Second, recent evidence indicates that topping off UI with a $600 PUA does not generate a discernible work disincentive. So much for that popular notion that financially assisting the jobless unleashes their supposedly uncontrolled love for “leisure.”

HEADED IN THE WRONG DIRECTION

What’s all this mean? Well, straight, no chaser: It means more misery in the immediate future. It means more people not having a cushion to soften their landing should they fall into unemployment. It means more people having a hard time paying their mortgage, it means more people reaching deeper into their pockets for rent and just coming with lint, it means more people slipping into poverty, it means the further vanishing of health benefits tied to disappearing jobs, it means that the nation’s most economically pressed people will continue to get peppered particularly hard by a slumping economy, and it mean\, despite the rhetoric coming out the mouths of the governing elites, the economy is headed in the wrong direction.

But it also means this: The fight is far from finished. It means that lovers of justice, and those who cherish life, must continue to perform—in words and deeds—a narrative that prioritizes the needs of the least of these. It means that we must envision and enact something better, something more just, something more beautiful than what we’ve got. That’s all I’ve got right now. Really.

Catch you on the flip side,

Doc Greene