unemployment benefits, unemployment system, minimum wage

Jobless Figures or Propaganda or Both?

Ideas and Issues
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Jobless Figures or Propaganda or Both?

June 29, 2021

New Orleans     

A pile of ruby-red states have announced an end to supplemental unemployment benefits.  Most of them have not yet gone into effect, but some have.  Interestingly, in this silent workers’ strike, observers don’t know what to make of it.  Recent articles in the Wall Street Journal and New York Times are interesting proofs of this phenomena.

In a headline trumpeting, “Benefits’ End Spurs Return to Workforce,” the lede in the Journal piece is that “The number of unemployment recipients is falling at a faster rate in Missouri and 21 other states, suggesting that ending the aid could push more people into jobs.”  Going further, after quoting the governor claiming a victory lap, the reporters argued that “The number of workers paid benefits through regular state programs fell 13.8%.”  Reading the article, the reporters, Eric Morath and Joe Barrett, are very articulate and fully attribute their arguments about the decline of benefit payments, but when it comes to backing up the promise of the headline:  there’s nothing there.  They are left with some vignettes from some St. Louis area businesses that claim they are seeing more applications.  The headline folks seem to be engaged in a bit of political propaganda that the reporters’ actual story doesn’t justify at all.  What’s up with that?

In fact, they may have realized this after the paper was printed, because the website changed the title and the subtitle. On the website, the title is “Americans are Leaving Unemployment Rolls More Quickly in States Cutting Off Benefits:  Some Missouri businesses see an uptick in applications after the state set a June end to pandemic jobless aid.”  I’d put a couple of bucks on the fact that the reporters or their editor, must have complained at the top of their lungs about the political propaganda of the headline which didn’t align with their article whatsoever.

The New York Times on the other hand looked at the same information and put a different slant on the same data with a title and subhead from another planet: “Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill:  Missouri scrapped federal pay to the unemployed, saying it kept people out of the labor market. But so far, workers still seem to be choosy.”  What’s more the reporter, Patricia Cohen, wrote that…

…in the St. Louis metropolitan area, where the jobless rate was 4.2 percent in May, those who expected the June 12 termination would unleash a flood of job seekers were disappointed.  Work-force development officials said they had seen virtually no uptick in applicants since the governor’s announcement, which ended a $300 weekly supplement to other benefits. And the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.

Cohen goes on to hit the nail even closer to the head:

Why businesses are having such trouble hiring when 9.3 million people were unemployed in May is a puzzle that has generated lots of speculation, but little hard evidence. Many economists are skeptical that enhanced jobless benefits have played an outsize role in the hiring squeeze. They are more likely to point to child care and continuing health fears with less than half the population fully vaccinated. Nor should it be surprising that the nation’s road back from the harrowing limbo of the pandemic, in which millions of jobs vanished and more than 600,000 people have died, is bumpy.  In any case, the squeeze has given many job seekers the confidence that they can push for higher wages or wait until employers come around.

That’s closer to the facts of the matter.  Whether one argues that this is propaganda from the right or the left, the facts seem clear.  Workers are on a sit-down strike as they look at jobs, but this time it’s at their houses, rather than at the workplace.  Employers are being forced to raise raises and perks, and workers are starting to calculate what it will take for them to once again put their shoulders to the wheel. One economist talked about an alignment arriving between workers and employers or what fair wages would be now.  Alignment is one way to talk about how this silent strike gets settled, not with a collective agreement like those negotiated by unions, but by a collective action that sets the price of return at something that suits workers for a change.

Got to love this moment in America for workers!