Yesterday’s jobs report was both surprising and disappointing, relative to the increased level of economic activity that has occurred over the last month. Republicans see it as evidence that the widespread stories are true: millions of minimum wage employees would rather collect enhanced unemployment compensation than go back to work. For once, they may be right. How big a problem is this?
I’m not overly concerned, because:
- Part of the rationale for the enhanced benefits was to give employers an incentive to raise wages. The system is working as planned; the problem goes away if wages go up. The real issue here is that employers feel entitled to low wage labor, based on their experience over the last few decades. That is a choice in which all of society has a voice–not just them.
- In any event, the issue goes away when the enhanced benefits disappear in a few months. At that point, we will know if there was any real basis to the lazy worker anecdotes.
- Anyone who prefers temporary enhanced benefits to the security of a job is running a big risk that neither will be available when the benefits expire.
- Unemployment is generally a proxy for misery. Today, it’s not. Is that such a bad thing?