States are wise to turn down Biden’s poison unemployment money

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It is quite rare to see a state turn down federal money. It is rarer still to see states turn it down in the name of improving their own economies.

Fortunately, several states are now doing just that. Why? Because President Joe Biden’s economic stimulus is making what’s rational for workers irrational for the economy as a whole.

At this point, the fact is unavoidable: The Biden administration’s foolish decision to extend increased unemployment benefits through the summer is clearly retarding the job market’s recovery. It made sense to pay out something to workers in exchange for government restrictions on their livelihood. But the long-term extension of extra-generous benefits has turned all the incentives on their head. For too many workers, the increased benefit makes it at least as profitable not to work as it is to work. And how can you blame anyone for not working if it actually costs them money?

Don’t blame the workers. Do blame the White House that chose to frame their choice for them so irrationally.

And indeed — how short-sighted it was in hindsight. It is still May, and the Centers for Disease Control and Prevention has now rescinded guidelines recommending mask-wearing in most contexts. Yet, the Biden administration has saddled the nation with payments for not working that will last straight into September, even though the virus’s spread has been arrested. That’s three-and-a-half more months of needless, counterproductive payments that are actually preventing the restoration of the labor market to pre-coronavirus levels.

Biden himself is in complete denial about the problem. “You can't refuse [job offers] and just keep getting the unemployment benefits,” he said. But everyone knows this is a toothless provision in the law. Those on unemployment benefits need only make a token effort at finding work in order to keep the Biden-bucks a-coming. And as long as they're being paid so well, why should they do anything more?

This is why some states, already having seen enough, are taking matters into their own hands and cutting off the expanded benefits, even though that means giving up federal money. Meanwhile, some of them are even offering bonuses to workers who leave unemployment and take a new job. This is a good idea because incentives matter. The labor forces in these states, once the Biden administration is no longer there to offer them perverse incentives, will get back on the job.

States control unemployment benefits. In this case, they are reasserting control in order to bring residents off the sidelines whom Biden has given reasons not to work. All other states would be wise to follow the example of Alabama, Arkansas, Idaho, Iowa, Mississippi, Missouri, Montana, North Dakota, South Carolina, Tennessee, and Wyoming. These states have now all set an early end-date for the increased unemployment benefits, some as soon as next month.

And at the federal level, Sen. Ben Sasse, a Republican from Nebraska, is offering legislation that would codify the idea of giving workers signing bonuses for taking new jobs quickly.

Biden can continue to be in denial as long as he wants. But as these states' job markets recover rapidly, he will be in a difficult place explaining why.





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