The Unverified Stat Heard All Around the Media

The early 1980s was eerily similar to the current political moment. After his successful presidential campaign depicting jobless welfare recipients as luxury-car-driving moguls, Reagan proposed big cuts to extended unemployment benefits — and deployed a top Labor Department official to justify the policy by complaining that he saw a Help Wanted sign outside a laundromat near his home in Arlington, Virginia. Soon after, the Reagan administration tried to cut off unemployment benefits if jobless people turned down any work, even if it only paid the federal minimum wage. His crusade eventually culminated in giant cuts to the welfare system, an explosion in poverty, and two-thirds of the public telling pollsters that “welfare benefits make poor people dependent and encourage them to stay poor.”

Reagan’s reliance on anomalous anecdotes — his favorite being the one about a Chicago welfare recipient — made for good politics at the dawn of the short-attention-span era, when sound bites began substituting for macroeconomic facts.

Decades later, America’s attention span is even shorter in the age of the cable news screamfest and the social media post — and so Republicans and their media allies have predicated their grand plans to cut unemployment benefits on tweeted photos of some fast food restaurants complaining they cannot find workers. That, and a study released by the millionaire staff of the US Chamber of Commerce, which purported to show that the additional $300 of pandemic benefits “results in approximately one in four recipients taking home more in unemployment than they earned working.”

The data point is a self-own — the nation’s most powerful corporate lobby group is effectively admitting how badly workers are getting paid in the world’s wealthiest country. We’d love to see the Chamber analysis, but they did not respond to our request to review it.

In the age of misinformation, the veracity of the number doesn’t seem to matter — because the propaganda has already gone viral.

CNN host Erin Burnett, for instance, read aloud the Chamber press release on the matter to former Obama administration economist Austan Goolsbee last Friday, before asking him to respond.

A few days later, CNN anchor Jake Tapper asked Biden’s COVID czar, Jeff Zients, whether “the enhanced unemployment insurance, while obviously well-intentioned, is creating a disincentive for some Americans.”

And now, a dozen Republican senators have cosponsored Senator Marshall’s proposed legislation, called the “Get Americans Back to Work Act.” The bill “decreases unemployment benefits to $150 per week at the end of May, and then fully repeals them out at the end of June,” according to a press release from Marshall.

“Unemployment Insurance Has Saved Lives and Kept the Economy Afloat”

The tall tale about unemployment benefits generating a labor shortage is reminiscent of Republican-driven lies we’ve seen define so many past panics, from the hysteria over Iraq’s nonexistent weapons of mass destruction to Donald Trump’s “stop the steal” demagoguery.

In this new paroxysm of lies and half-truths about the job market, facts seem unable to penetrate the discourse: facts like studies showing that providing more generous unemployment benefits has little effect on overall employment. Or facts like a recent survey showing that 43 percent of small-business owners who say they are having trouble hiring workers admit that it isn’t because workers are languorously living off lavish federal benefits — but because workers are seeking better-paying jobs, fearing COVID, or unable to afford day care.

If, as Republicans insist, unemployment benefits had created a nationwide labor shortage, then the laws of supply and demand that the GOP worships would produce a significantly faster wage recovery for workers — especially since the first half of the pandemic period was marked by widespread wage cuts.

In fact, there is recent evidence that when employers deign to pay employees better, they can be flooded with eager job applicants.

“What we are witnessing with the myth of labor shortages is an attempt to ‘criminalize’ being unemployed, to force people into starvation to create a pro-business labor bargaining position. Reporters repeating this myth are complicit,” tweeted AFL-CIO economist William Spriggs.

New data from the US Census Bureau corroborates these points. The agency’s most recent survey of people who are not working — a group that includes those on unemployment as well as the much larger population of Americans who have dropped out of the labor force — shows that far more people are now reporting that they cannot work because they are caring for children or elderly relatives. The data indicates that many Americans have retired, as well as that millions are still afraid of the coronavirus.

Sure, some people are less willing to work difficult, low-wage jobs that have become even more stressful and dangerous due to COVID — but that is also because a safety net and wraparound services are still vanishingly difficult to afford or find.

“Unemployment insurance has saved lives and kept the economy afloat during the pandemic,” said Lindsay Owens, an economist and interim executive director of the Groundwork Collaborative. “Responsible employers will not have trouble bringing people back to work when the actual barriers to returning — access to childcare, inadequate pay, and uncertainty about a health and safe working environment — are removed.”

According to a blog post by the Economic Policy Institute (EPI), sporadic labor shortages “do seem to have popped up in the leisure and hospitality sector,” but there is little evidence that the federal unemployment benefits are to blame.

Restaurant wages have started to rebound, but only enough to offset their dip last year as employers cut workers’ pay or reduced their hours. As such, restaurant wages are essentially at “where they would have been based on pre-COVID trends,” wrote EPI’s director of research, Josh Bivens, and Heidi Shierholz, a senior economist and director of policy at EPI.

“Any signs that the more-generous UI [unemployment insurance] benefits included as part of the American Rescue Plan (ARP) are driving wages higher in this sector are very faint — far too faint to justify a scaling back of these benefits or to justify state-level policymakers depriving their own workers of a needed boost to the safety net,” they wrote.

GOP Slashes Jobless Aid and Worker Protections While Demanding Cash for Tax Cuts

All these facts are being ignored in service of a good narrative — to the obvious delight of Republican politicians and their wealthy benefactors.

Since last week, at least sixteen Republican governors have announced that their states will stop paying out the federal unemployment benefits early, with end dates in June or July. At the same time, twenty-one Republican attorneys general have been demanding the Biden administration allow states to use stimulus money to finance new tax cuts.

The GOP governors are trying to win yet another one for the Gipper’s right-wing ideology — and their moves were a big victory for the US Chamber of Commerce, which has dumped $850,000 into the Republican Governors Association since 2018, according to data from Political MoneyLine. It was a huge loss for hundreds of thousands of jobless people in Alabama, Arkansas, Arizona, Georgia, Iowa, Idaho, Mississippi, Missouri, Montana, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Utah, and Wyoming.

A new Century Foundation fact sheet found that nearly 1 million workers will be affected — and that was before several more states announced Thursday that they will also stop paying federal unemployment benefits. The majority of the workers losing the federal benefits will not be eligible for any unemployment aid, according to HuffPost.

One of these states, Ohio, made headlines last year for offering employers an area on its unemployment website to “report COVID-19 work refusals” when workers refused to come back to jobs for fear of being killed by COVID.

If that doesn’t convince you that Republicans’ real goal is forcing workers back to unsafe, low-wage jobs — and helping employers avoid having to raise pay — then remember that many of these same states have also gone out of their way to link health care benefits to employment, and to let employers evade stringent safety measures.

For instance, Republicans in half of the sixteen states cutting off unemployment benefits have continued to refuse federal funding to expand Medicaid and provide health insurance coverage to their states’ poorer residents, even more than a decade after the passage of the Affordable Care Act.

Meanwhile, nearly none of the sixteen states shutting off benefits currently requires people to wear masks in public or inside businesses. Ohio is the only one with a mask mandate, and that requirement will end in June.

Even worse, nearly all of these GOP governors have signed immunity laws in their states broadly shielding businesses from COVID lawsuits by substantially raising the bar for liability lawsuits. Only one of the states, Missouri, doesn’t yet have a coronavirus immunity law, but state lawmakers there can still pass a bill before their legislative session ends.

And then there is the issue of worker pay: in ten of these states, the minimum wage is still $7.25, and in the other states, it is only higher because voters passed ballot initiatives.

What’s particularly obscene is that some of the poorest states in America, such as Alabama, Arkansas, and Mississippi, led the charge to slash unemployment rather than allow a tight labor market to push up workers’ pay.

Indeed, Mississippi, where Reagan demonized welfare in his infamous “states’ rights” speech, has the highest poverty rate in the country. While politicians there have been insinuating that jobless workers don’t need more unemployment benefits, the Mississippi Clarion-Ledger reported that former NFL quarterback Brett Favre still hasn’t paid back $600,000 in state welfare money he was paid for speeches he didn’t show up to give.

You have to pay attention and connect a few disparate dots like that to see the GOP’s true colors. But every now and again, a prominent right-winger gets a bit sloppy, drops the pretense, and lets slip that the real goal here isn’t preventing a labor shortage, but instead keeping pay as low as possible for anyone who isn’t a big donor or a wealthy celebrity.

“Finding people to take jobs as they reappear, however, has become daunting if not impossible, particularly at the lower end of the pay scale,” wrote the Washington Post’s columnist Kathleen Parker. Her statement’s last clause made clear that she and her fellow conservatives cannot countenance the idea of raising wages for people who serve them food, cut their lawns, and deliver their Amazon packages.

“A shortage is a condition with excess demand *at the market price*. Wages have yet to reach the new equilibrium,” tweeted Georgetown University economist Hal Singer. “Calling it a ‘labor shortage’ puts on the onus on workers, when employers insist on paying subsistence wages.”

“You Are Obligated to Ensure This Aid Gets to Workers”

As Republicans intensified their new version of the old “welfare queen” story, on Tuesday, Biden pushed back, saying administration officials “don’t see much evidence” that unemployment benefits are incentivizing people not to work.

But as the GOP fable coursed through elite media, he threw conservatives and business groups a bone, issuing a directive to his labor secretary demanding he work with states to reinstate requirements that people receiving unemployment benefits search for jobs, a condition that most states waived at the outset of the pandemic.

“We’re going to make it clear that anyone collecting unemployment who is offered a suitable job must take the job or lose their unemployment,” Biden said, in a statement that doubled down on his press secretary’s similar jeremiad.

It was a disappointing and unexpected development, given that one of Biden’s first moves as president was to allow workers to collect unemployment if they refuse a job in a workplace that is “not in compliance with local, state, or national health and safety standards directly related to COVID-19.”

Biden’s wavering did not go unanswered: a few days later, progressive senator Bernie Sanders (I-VT) wrote to Biden’s labor secretary, Marty Walsh, to remind him of his “congressionally-mandated requirement” to make sure people continue to receive benefits under one of the COVID-related unemployment programs — Pandemic Unemployment Assistance (PUA), which provides aid to independent contractors, gig workers, and freelancers who are excluded from state unemployment programs.

“Congress did not grant states the ability to strip PUA benefits away from vulnerable workers,” Sanders noted, adding: “As secretary, you are obligated to ensure this aid gets to workers.”

Whether or not the Biden administration does so is a life-and-death issue for those million people threatened by Republican governors’ unemployment cuts.

It is also the moment when the president will decide whether to bury the “welfare queen” myth once and for all — or let it haunt American politics for another generation.