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Disincentivizing Work

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Penna Dexternever miss viewpoints

Finally, states are allowing — and encouraging — businesses to reopen. But when they attempt to re-hire laid-off workers, many employers are getting a surprising response: “No thank you”

We actually should not be shocked by this because the U.S. government has made unemployment pay better than work.

The government created this disincentive to work in March by passing the Cares Act. The bill contained a provision many conservatives complained about but allowed to go through in the rush to provide relief to companies and workers affected by coronavirus lockdowns.

The Cares Act increased normal unemployment benefits by $600 per week, which equates to a $15 per hour minimum wage. According to a new economic working paper, more than two-thirds of laid-off workers are making more unemployed than they were at their jobs. One in five will make twice as much not working. Lower-wage workers benefit the most. The bottom 10 percent — mostly part-timers — will collect three times more if they remain unemployed.

Libertarian commentator John Stossel aired a TV report on this. He featured the CEO of an Arkansas sawmill who told him he simply cannot match the state’s unemployment benefits. He said, “We haven’t seen an application in weeks.” If businesses cannot find qualified workers, the recovery will be slower.

A guy who quit his job transporting hospital patients told Stossel, “My little girl is loving it.“ What about the patients? John Stossel says the $600 unemployment enhancement to the Cares Act made it so “a law that was supposed to help people did the opposite of what politicians intended.”

Well —some politicians.

The $600 per week boost to unemployment is supposed to expire July 31, but there’s an effort in Congress to extend it through January.

John Stossel says workers who depend on handouts for too long descend into what social scientists call “learned helplessness.”  The Left is fine with using coronavirus relief to increase state power over our lives. We shouldn’t be.

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