Subsidy for Unemployed Too High?
Businesses offering good jobs having trouble finding employees.
Factory. CC0 Public Domain.
Congress should think twice before getting too generous with weekly unemployment compensation. That’s because manufacturers are already having a hard time finding enough workers to man their factories.
Despite an unemployment rate that looks relatively high at 5.5%, employers in the manufacturing sector can’t find enough people to man their factories. It seems like a paradox, but the labor shortage is real.
That’s rational, but many of the people are going to work and taking the same level of risk. Indeed, the economic recovery depends on our core employers getting back to full speed with full manning.
The peripheral employers, such as restaurants and movie theaters, will never get back to full stride if the big majority of people aren’t employed and don’t have money in their pockets to spend on the less essential human activities.
At the height of the COVID-19 recession last spring, the federal government was doling out $600 per week in supplementary unemployment compensation. In Wisconsin, that came on the top of almost $300 per week in regular unemployment compensation.
That added up to almost $45,000 per year for not working. Most people want a job and all the benefits that come with full employment, but there is a minority that will take a vacation on government money if it’s available.
The current legislation in front of congress for a second round of COVID-19 subsidies has included a supplementary unemployment bonus of $300. It’s not as rich as the first COVID-19 subsidy, but it is more than enough to keep some people from taking a new job.
Yet, as Mayor Tom Barrett has said, the best form of welfare is a good job.
Not only do these open manufacturing jobs provide a living wage for a family, the worker also gains the self-esteem that comes with being a bread winner.
Further, companies are more than willing to train people who do not have the required skills for jobs in their factories. Lack of training is not an excuse for not working.
Note: employers have also raised starting wages in this area to $14 to $16 per hour, above the $15 minimum wage proposals from politicians who want every citizen to have a living level of income.
Little understood is that all good paying jobs are paid for by the private sector.
Take health care, for example. The private employers provide health care for about half of Americans. Public health care programs like Medicare and Medicaid carry the costs of the other half of Americans.
But, where does the money come from for the public health care programs? Of course, it comes from the taxes paid by the private corporations paid by their employees. Their taxes cover the public payrolls and the taxes that the public employees pay.
The obvious conclusion: let’s get people back to work in the private sector. Let’s get the incentives and disincentives for productive work set up the right way.
We don’t need excessive unemployment compensation if there are lots of open jobs with good pay and benefits. Congress and the president have to get the incentives right. We can’t afford disincentives for working.
John Torinus is the chairman of Serigraph Inc. and a former Milwaukee Sentinel business editor who blogs regularly at johntorinus.com.
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The devil is in this detail: what is a “good job”? It’s more than just a good wage (which 15$/hr is not, that’s merely a minimum living wage). A good job is predictable full-time shifts, it’s healthcare, it’s adequate training for the job. A good job is one that’s flexible with regards to childcare, elderly care, immigration status, and jail history. Are manufacturers doing this? Check in with them before suggesting taking support away from people who are steps away from poverty.
Most importantly, don’t suggest this before COVID-19 is under control nationwide.
The time to even look at this is AFTER we are over the major COVID pandemic. I am willing to work but cannot because of my age – 63 and not being able to physically do what I did in the past. That “subsidy” is helping me greatly right now and it does not last a full year. It lasts for 26 weeks only with a possible 13 week extension.
Oh, please. When will the intelligent middle class stop giving air to these self righteous, bigoted, rich selfish men? Haven’t they don’t enough harm to our society for the past 40 plus years since Reagan?
There is no amount of “ subsidy” to the rest of the people that can come close to the subsidies
paid to the rich.
Enough already.
If employers have jobs to fill, but not enough applicants for those jobs, they need to offer better compensation, not rely on removal of subsidies (unemployment compensation) for those currently without jobs. The reasoning in this is so blatantly anti-worker (and by the same token–pro-corporate-profit) that it can’t be taken seriously. End unemployment to force workers into so-called “good jobs” with mediocre pay and non-existent benefits? Ludicrous. If they want employees, let employers offer better pay; there’ll be plenty of people that show up for those jobs.
This sounds like it was written by someone who mulled over the cliche troupes of the unemployed while sitting on a mountain of bootstraps. Where did that $45,000 number come from? Just some scribbled math on a napkin? My husband – who is on pandemic unemployment (PUA) because his public-facing business literally won’t function in a pandemic – collected the max unemployment in 2020 and didn’t even come close to HALF of that number. In fact, it would be another year plus of unemployment benefits before he reaches that number, which won’t be possible because it likely won’t be extended! And you do realize that the $600/week was/is temporary, right? Not every week of the year last year.
Meanwhile, he’s also past the age of training for and suffering through some grueling manufacturing job that would likely end up paying him not much more than he’s made from PUA. And why start at the very bottom of the proverbial food chain and retrain at even a private sector job when his previous dream career is there waiting for him so long as we knock out this pandemic? Plus, who is going to hire people like my husband knowing full well that they’ll quit and return to their livelihood once the pandemic is over? I doubt my husband’s story is unique. The *types* of unemployed people out there right now – THAT is what’s unique to our current circumstances. Business owners and their staff who rely on indoor or even outdoor public experiences and events who have to ride this out and are grateful for the subsidies that allow them to, so that they can return to their livelihoods when this is over.
I’ll also add that these subsidies have allowed us to pour money back INTO our local economy and keep supporting those struggling. I’ve felt more comfortable to donate money to programs this past year. We’ve purchased takeout more often to support our favorite restaurants so they don’t go under. My husband even paid 100% out of pocket for dental work he would never have done hadn’t it been for the unemployment benefits. This is security. And for us and our community it’s a solid temporary solution. Read: temporary.
TL;DR: This is not your grandpa’s unemployment problem.
Is the problem the extra unemployment money or the lack of transportation to manufacturing jobs?
He failed to mention the drug test trope. I suppose that will be his next column.
Oh yikes, Torinus floats out another predictable stinker. Can’t wait for his next column of specious claims so logically contorted they could be confused for Jack Donaghy quotes.