Disappointing Jobs Report Shows Extended Unemployment Benefits, Stimulus Disincentivize Work in ‘Stunning Slowdown’
Economists were expecting 1 million new jobs, but just 266,000 jobs were added over the month of April and March numbers were revised downward, too.
You’ve seen the anecdotes; employers are having quite a hard time finding help these days, and they’re pointing to Uncle Sam as the leading cause. Simply put, unemployment benefits and ‘stimmies’ pay better than actually working for a living. Now that phenomenon is showing up in the numbers.
The key takeaway from the report is that net job gains were negative, excluding the leisure and hospitality industry, which added 331,000 jobs. It is a stunning slowdown from March and has ignited the argument that extended unemployment benefits have created a disincentive to look for work. In turn, it has also ignited the idea that the market has gotten ahead of itself with its recovery/reopening enthusiasm.Page One, Briefing.com
Expectations were for around 1 million new jobs, making the April ADP report one of the worst misses in years. The unemployment rate actually ticked up as a result.
Many businesses are chomping at the bit to return to full service now that Pandemic Panic restrictions are easing around the country and the summer season bringing with quite a more sunny outlook than the last 12 months. That push is reflected in the leisure and hospitality job gains, but everywhere else jobs have been shrinking over the last several weeks.
When the government hands out unemployment benefits with a sense of infinitude, offers hefty stimulus checks to people just for breathing, it’s no wonder the incentive to actually work for a living has been diminished for a large swath of the population. It is a case study in economic incentives and one of the many negative and entirely foreseeable consequences of socialist policies.
Of course, this is exactly what the Left wants.
Normalizing constant government dependency and desensitizing the American people to direct cash redistribution schemes is laying the foundation for policies like Universal Basic Income and the complete disassociation of work from monthly paychecks. And while the arguments for relief may be more Woke, the ideas are hardly new.
Indeed, it was President Franklin D. Roosevelt who, in 1944, infamously suggested expanding the Bill of Rights to include many of the same ‘rights’ AOC is ‘totally stoked’ about in the aptly named Green New Deal. A right to a decent income, a decent home, free healthcare, retirement, and, importantly, the right to not work at all, but still get all of these things. Somehow.
As it turns out, a great many people will take advantage of such an offering for as long as the printing presses keep running and politicians keep pandering. They’ll buy things too, it seems, driving demand (and prices) up, while business owners struggle to find workers willing to actually produce the supplies in demand.
This rightly has market and political observers wondering just how ‘transitory’ the disincentive distortion will ultimately be. A mere five months into a Biden administration and Democrat-ruled Congress that has already racked up trillions in redistribution, graft, and cronyism spending, they persist in pushing multiple additional multi-trillion spending packages that will inevitably include more ‘stimulus’ for the successfully expanded dependency class.
The socialist experiment is far from over.