Hello Democrats: Starving People Into Getting Jobs Isn’t Working

Last month, the pandemic unemployment benefits — what I have been calling super-unemployment — expired, with the support of both Republican governors and the Biden administration. The thinking, at least partly, was that this might help push workers into new jobs: Too many Americans had gotten fat and lazy living off unemployment benefits, and it was time to starve them into the labor market.

Today, the September jobs report came in, and that thinking has been proved wrong. Just 194,000 jobs were created last month — as in comparison with hopeful economist predictions of 720,000. As Matt Bruenig writes at the People’s Policy Project, “This was the worst month of job growth since Biden became president and the second-worst since May of last year when the pandemic labor market recovery started.” America continues to be about 5 million jobs short of the pre-pandemic total. At this rate, it will likely be around December 2023 before that gap is closed. Starving individuals into jobs is not working.

Why not? Any theory should be somewhat speculative at this early date, however the obvious factor here is definitely the coronavirus. September saw the second-worst surge of COVID-19 cases since the start of the pandemic, and that has previously shown a dampening economic effect. Even with available vaccines and pandemic fatigue, individuals are typically much less willing to go out and spend cash in retailers and restaurants if a deadly disease is on the rampage.

That creates a knock-on problem for households with younger kids. Women’s labor force participation fell slightly in September, which nearly certainly has to do with child care. In-person school has restarted in most of the country, and Republican officials in many states have forbidden mask mandates or other pandemic control measures in the classroom. The end result has been tens of thousands of infected children stuck at home for days or perhaps weeks at a time, with millions more forced to quarantine after exposure. Child care was already extremely expensive before the pandemic, and in many states now it’s straight up unavailable, so many parents have been forced to remain at home to care for their children some or all of the time.

Second, reducing super-unemployment removed tens of billions of {dollars} of spending from the economy. That cash was going into the pockets of individuals more likely to spend most of it. The Economic Policy Institute estimates that ending the program cut incomes by $144.3 billion and consumer spending by $79.2 billion this year. Meaning businesses have fewer sales — and fewer job openings.

Third, we’re still coping with general labor market disruptions brought on by the pandemic. Many front-line employees are burnt out from working through this nightmare. Others died from COVID-19 or are still coping with “long COVID.” Medical providers particularly vulnerable to staff burnout — hospitals, nursing homes, and residential care facilities lost a combined 46,000 jobs in September — no doubt due to the surge of unvaccinated COVID-19 cases that crushed many hospitals in August and September.

Together, all this means that even with super-unemployment, we most likely would not have gained 1,000,000 new jobs last month. As long as the coronavirus continues to be raging, full economic recovery won’t happen. However many Republican states cut off super-unemployment somewhere between June and August, and they saw worse job growth than states that kept it. And now that super-unemployment is gone completely, once more we see a job growth nosedive. Contrary to bipartisan forecasts, had we kept the benefit, it is reasonable to suppose we might have added a couple hundred thousand more jobs this month.

However all that’s irrelevant. The purpose of super-unemployment was to not create jobs. It was to tide folks over till the pandemic passed. That has not occurred. At time of writing, the seven-day average of new cases was trending down nationally, however it’s still at nearly 100,000 cases and over 1,700 deaths per day. (And those numbers are trending up in some states, including North Dakota, Michigan, Pennsylvania, and Minnesota.) Given the abysmal vaccination rates in big chunks of the Midwest and Great Plains, I’d guess there’s at the very least another half a year to go before something close to normal conditions return.

It’s frankly staggering how blithe the political class has been about this. Back in March, when Democrats passed the American Rescue Plan, daily cases had been at about 50,000 and trending down. Party elites apparently assumed the vaccines would finally end the pandemic (at the time, I did too). In the ensuing months, a handful of small business tyrants whined to the press that they could not find enough employees to fill crummy, low-paying jobs, so about three quarters of Washington D.C. decided that the working class needed to be starved into working.

I would expect that of Republicans. However Democrats control the presidency and Congress, and they could extend the pandemic rescue measures at any time. Instead, it appears they’ve become used to mass death and mindlessly eager to shove downtrodden employees back into their customary position at the bottom of the social hierarchy. Outside of a handful of leftist members of Congress, they do not even notice when their plan to starve folks into jobs does not work.

Any sensible — not to mention progressive — party would keep pandemic policies in place until the pandemic is over. Apparently Democrats are neither.