By Duncan Smith
Let’s try a thought experiment, and do so without making any judgments of people.
If the government were willing to pay you as much as you were making in a job or more, would you:
a) Shun the offer and continue to work your job for no better money, or;
b) Quit that sum bitch as fast as possible and live your life at your leisure, with a guaranteed paycheck
We already know the answer: Most people would choose option b.
We know that because we have seen most people choosing option b when they can.
You may recall that part of the ‘COVID relief’ bill passed earlier this year on a straight Democrat vote contained outsized unemployment benefits on top of state unemployment benefits.
Republicans, labor experts, and real economists warned at the time that the policy was doomed to failure because it would produce a false labor shortage.
That’s exactly what happened, so red state governors started ditching the extra benefits when their business owners kept screaming they were having difficulty rehiring staff as they emerged from coronavirus shutdowns because people were making more on unemployment.
Blue states, however, continued taking the extra dough and as such, business owners in those states are still sucking big-time in terms of trying to find enough help.
Well, the verdict is in: The country’s unemployment rate has fallen strictly because of red states making the decision to end benefits; and in those states, unemployment rates are way below the national average.
On Sunday, the Wall Street Journal picked up on this and reported that “the number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states canceling enhanced and extended payments this month, suggesting that ending the aid could push more people to take jobs.”
The paper added:
The number of workers paid benefits through regular state programs fell 13.8% by the week ended June 12 from mid-May—when many governors announced changes—in states saying that benefits would end in June, according to an analysis by Jefferies LLC economists. That compares with a 10% decline in states ending benefits in July, and a 5.7% decrease in states ending benefits in September. Workers on state programs would lose the $300 weekly federal enhancement but could continuing receiving the state benefits.
Jefferies also found somewhat larger decreases in the number of people receiving benefits through pandemic programs in states curtailing benefits, though the data lags behind by an additional week. In many cases, those recipients will be cut off entirely when their state ends participation in the federal programs.
'You're starting to see a response to these programs ending,' said Aneta Markowska, Jefferies' chief financial economist. In recent months 'employers were having to compete with the government handing out money, and that makes it very hard to attract workers.'
How fast does the situation turn around once the socialist policy of providing [not] free money ends?
Then a few weeks ago, things began to change at its Missouri locations. At one property, seven people came to a job fair, which Ms. Eigelberger took as a positive sign. Then, two weeks ago, the Element St. Louis Midtown hotel had a breakthrough with 40 job seekers, she said.
'It's crazy how quickly' things seem to be ramping up, she said, noting that workers in other states where Midas operates and the federal benefits are still in place appear reluctant to re-enter the workforce.
The hotel had 11 openings, including housekeeping, front desk and food-service jobs, Ms. Eigelberger said. It offered positions to nine job seekers at the fair, and all of them arrived for their first day of work. Several of the new hires had been out of work for at least six months.
Yes, ‘crazy’ how many open jobs get filled when the government isn’t paying people not to work.
And once done contemplating the dumpster fire that the economy is in many if not all blue states, consider this: once Federal benefits run out and millions of workers flood back into the labor market, what happens to not just their wages but to everyone else’s wages as companies that have been hammered on their gross profit not only the fat but also muscle. Just how long before the current inflationary burst turns into all-out stagflation.
Is Inflation Going to Break the Back of Consumers and our Economy?
Will backed-up supply chains ever catch up to demand?
You have to be prepared for the coming financial reset