A Good Worker Is Hard to Find

The subsidies for not working continue to hurt the labor market

WSJ editorial. Excerpts:

"Employers created 559,000 net new jobs in the month, which sounds great until you notice that 1.5 million fewer workers in May said they were unable to work because their employer closed or lost business due to the pandemic. Most of those workers should have found new jobs but didn’t. 

The civilian labor force shrank in May by 53,000, and the number of men over age 20 who were employed fell by 8,000. The labor participation rate declined to 61.6%, even as the jobless rate fell to 5.8% from 6.1%."

"What gives? The Occam’s razor explanation is that in March the Biden Administration and Congress ladled out another mountain of cash to Americans—work not required. The extra $300 a week in enhanced jobless benefits is one problem, since millions of Americans can make more staying on the couch. This jobless pay isn’t subject to the payroll tax, unlike wage and salary income.

This is on top of regular jobless benefits, plus new or extended cash payments such as the $3,000 per child tax credit, additional ObamaCare subsidies, and the $1,400 checks to individuals. Again, no work required.

Economists Casey Mulligan, E.J. Antoni and Steve Moore estimate in a new study that in 21 states households that qualify can receive a maximum wage equivalent of $25 an hour in cash without working. In 19 states, the maximum benefit is the equivalent of $100,000 a year in salary for a family of four with two unemployed parents. Not working is a rational economic choice."

"wages are rising: 24% since March on an annual basis in leisure and hospitality."