Job Growth Twice as Fast in States Retaining UI
August Job Growth Was Twice as Fast in States That Retained UI – “People’s Policy Project,” Matt Bruenig, September 21, 2021
I ran across this author and his site while reading a commentary (referencing Matt Bruenig’s story) on McDonalds experience in Denmark at Yves Smith’s Naked Capitalism. Since my background over 40 odd years has been in manufacturing and the impact of direct Labor on it, I was drawn to that article and visited Matt’s site. This caught my attention.
Yes, there are people who may not want to work . . . period. In my experience, I have found this reasoning of not working outside of illness, children being home, etc. is not realistic. Most people do want to work . . . period.
In all of their wisdom, some states, half the states, mostly Republican states, put emphasis on back to work efforts . Emphasizing it by eliminating unemployment benefits or benefits which were put in place due to the Covid pandemic. This started back in June as detailed by Matt at People’s Policy Project.
Recently, the BLS released its August (monthly) local area unemployment data. The data showed once again UI cuts are not supercharging employment growth as depicted in the chart.
Matt Bruenig: “The federal government eliminated pandemic UI benefits on September 6 with the full support of President Biden. At the time, the available labor market data showed that this was a mistake:
states that had prematurely ended the benefits in the summer did not grow payrolls faster than states that didn’t and so the cuts served no purpose except to immiserate jobless people.
The Unemployment Insurance cuts did not supercharge employment growth and quite the opposite occurred. In August. States cutting UI benefits over the summer saw their payrolls grow by 0.12 percent. States retaining UI benefits grew their payrolls by 0.27 percent or more than twice as fast as the benefit-cutting states.
Half of the states announced in May of this year that they would be cutting UI benefits early, with the first wave of cuts happening in early June. The other half of the states held on to the pandemic UI benefits until September 6 when the federal government cut them off. Between that period, the states that cut UI benefits grew their payrolls by 1.47 percent. That states that did not cut UI benefits grew their payrolls by 1.60 percent.
No serious economic planner would look at this time series and say it shows we need to eliminate pandemic UI benefits in order to supercharge employment growth. And yet this is exactly what the federal government has now done with precisely that goal in mind.”
I agree with Matt, Biden quietly allowing Federal pandemic funding to end is not acceptable or the stick in the eye of Republicans which I would have liked to see, or showing much backbone. States still have resources to extend benefits, many have been running surpluses, and states are discussing tax rebates much of it will go into the pockets of those who do not need it. many states also have allocated federal Covid pandemic funds which they purposely did not release (Michigan is one example).
Putting the emphasis solely on Biden is a mistake and we need to call Republicans and states out.
Not so vaguely related.
The Economy Looks Solid. But These Are the Big Risks Ahead.
NYT – Neil Irwin – Sep 27
I agree with you entirely and am grateful to you for pointing it out.
But I am a grumpy old man and love to live dangerously so..
My first thought is “oh, yes, let us call them out. The whole world will stand up and say, “Gwarsh, AB has called on us to be sane. We better do that. Now!””
My second thought …not so sure about, being a grumpy old man and all… is isn’t it a mistake to call it “a steeper slowdown”? Wouldn’t we normally expect the rate of growth to slow as it reaches a normal level of growth (itself a rate)?
Third, can we really expect politicians to not find a way to mess this up…both Democrats and Republicans in their charmingly different ways?
Thanks to Dobbs for pointing out supply chain difficulties as another reason for slower recovery besides lazy workers.
And, of course, do we really need so much growth, speaking as a lazy worker who worries about the rate of resource depletion…including those resources that make life worth living..
Did cutting Unemployment benefits fix the supply chain issues? Also, the manufacture of semiconductors consists of what? It is not labor intensive and there are two stages to it.
I will explain it anyways. What was being experienced early this year was also experienced in 2008-10. Industry did not maintain their orders to the semiconductor manufacturers (the demand does not go away). The industry placed their orders with the manufacturers at a rate which can not be done in a brief amount of time and lengthening lead times does not increase capacity. Packaging semi-conductors occurs at different facilities than growing the wafers used to package the semiconductors.
It is not a fast process. I doubt NYT knows the process(es).
It takes time to grow the wafers in the wafer facilities and it also takes time to start up the packaging facilities. Both are in filtered facilities keeping dust and pollutants to an extremely low level.
We went through this in 2010 with semiconductors. It is nothing new and little has changed. Every industry using a semiconductor was faced with the same issue unless they were smart enough to learn from the last 2010 go-around.
I was on those calls between my manufacturing facility, Chrysler, Ford, etc. and Panasonic, Infineon, NXP, etc. The Japanese told the Chrysler exec he should give us some of his allocation (muffled laugh).
Did throwing people off of emergency benefits get them back to work?
PS. I am waiting for cabinetry to be installed in a new and smaller home so we can move into it. The process started back in May. A couple of weeks ago we were told they ordered different cabinets for a couple of $thousand more because the original version was still not available. I would love to see their supply chain for a build-to-spec home with no alterations. I am sure I could help them improve it and lower costs.
Coberly: I was supply chain in support of all types of manufacturing. Yu are “shit-stirring.”
I must be a much worse writer than even I thought.
I said nothing that disagrees with what you said here…or there.
Except about the sh.t stirring. I think that must be in the mind of the beholder.
Please go back and read what I actually said.