These states cut unemployment aid early to supercharge hiring. It isn't working.

[Stevicus]

These states cut unemployment aid early to supercharge hiring. It isn't working.

In May, Missouri Governor Michael Parson explained he was directing the state to cut off $300 in weekly jobless payments, months before the federally funded benefits were due to expire in September. The "excessive" aid had "incentivized people to stay out of the workforce," he said.

But Parson's plan to supercharge hiring by curtailing jobless benefits may not be paying off, based on a new analysis of hiring data from Gusto, a company that handles payroll and other services for small and midsized businesses.

So far, a dozen states that were the first to cut pandemic jobless benefits have experienced hiring growth on par with states that kept the federal benefits, the Gusto analysis found. These 12 states, all of which have Republican governors, blamed the generous unemployment benefits for keeping workers on the sidelines, but early evidence suggests that other issues — ranging from pandemic health concerns to problems with childcare — may be weighing on the job market, Gusto economist Luke Pardue said.

So, they thought that it was the "excessive" unemployment benefits which were a disincentive to staying out of the workforce, but this would indicate otherwise.

I guess this refutes the common misconception that people take low-paying jobs "by choice." Obviously, if another choice exists, they won't take those jobs, and the employers have to try other ways of enticing employees. (Of course, actually paying people a decent living wage is out of the question.)

The dozen states that ended unemployment aid by June 19 — Alabama, Alaska, Idaho, Indiana, Iowa, Mississippi, Missouri, Nebraska, New Hampshire, North Dakota, West Virginia and Wyoming — saw its employment headcount grow 11.6% since April 2021. By comparison, hiring has grown at relatively the same rate, 11.2%, in states that kept the benefits, the Gusto analysis found.

 

[Revoltingest]

There's a balance in business.
Pay too little, & one gets fewer worser workers.
Pay too much, & one doesn't make money.
Everyone searches for that balance.
Some are more successful than others.

As for the linked study, its conclusion doesn't
take into account phase lag in economic response.
But at least it notes this weakness.
Excerpted....
To be sure, the analysis only tracks a few weeks after the termination of the jobless benefits last month. Nevertheless, the early data signals that the strategy hasn't immediately had the impact that the governors of those states hoped for.

 

[Stevicus]

There's a balance in business.
Pay too little, & one gets fewer worser workers.
Pay too much, & one doesn't make money.
Everyone searches for that balance.
Some are more successful than others.

As for the linked study, its conclusion doesn't
take into account phase lag in economic response.
But at least it notes this weakness.
Excerpted....
To be sure, the analysis only tracks a few weeks after the termination of the jobless benefits last month. Nevertheless, the early data signals that the strategy hasn't immediately had the impact that the governors of those states hoped for.

"Worser"?

I think the key point is that there's been hiring growth across the board, but they're citing other factors as to why many are not returning to the workforce. They believed that the unemployment benefits were the primary factor, but this appears to not be the case.

 

[Revoltingest]

"Worser"?

Cromulent it isn't, but it fit better than any other.

I think the key point is that there's been hiring growth across the board, but they're citing other factors as to why many are not returning to the workforce. They believed that the unemployment benefits were the primary factor, but this appears to not be the case.

Unemployment bennies are indeed a factor.
But economics is a complex thingie.
System response is time dependent.
Some might assume that if 2 states respond the same
way using different polices that the policies have no effect.
This is fallacious. If the policies were the same, the results
could've been different, ie, the different policies had a real
effect, but it was to make the results similar.

 

[metis]

They believed that the unemployment benefits were the primary factor, but this appears to not be the case.

It may be somewhat, but the point is that there are numerous factors the even more explains why so many aren't returning.

 

[Stevicus]

Cromulent it isn't, but it fit better than any other.

Unemployment bennies are indeed a factor.
But economics is a complex thingie.
System response is time dependent.
Some might assume that if 2 states respond the same
way using different polices that the policies have no effect.
This is fallacious. If the policies were the same, the results
could've been different, ie, the different policies had a real
effect, but it was to make the results similar.

But the thing is, the unemployment benefits really shouldn't be a factor. That is, if we're going to accept the notion that people take low-paying jobs "by choice." Clearly, if other choices exist, then these employers go begging for workers. If workers really wanted these jobs, they'd be lined up around the corner, willing to do it for free. Since that's not really happening, we might consider looking at other theories.

However, I do understand that these are just early figures. We can check again in 3 to 6 months and see where things stand. Too many unknowns right now, especially with this Delta variant hobbling things and causing a setback.

 

[Revoltingest]

But the thing is, the unemployment benefits really shouldn't be a factor. That is, if we're going to accept the notion that people take low-paying jobs "by choice." Clearly, if other choices exist, then these employers go begging for workers. If workers really wanted these jobs, they'd be lined up around the corner, willing to do it for free. Since that's not really happening, we might consider looking at other theories.

There is choice. Workers can take one job or another.
They can seek higher pay or not. And when offered
pay in exchange for being unemployed, this too is a choice.

I've known some people who delayed going to work until
unemployment benefits ran out. So this is a choice that
exists in the real world.

However, I do understand that these are just early figures. We can check again in 3 to 6 months and see where things stand. Too many unknowns right now, especially with this Delta variant hobbling things and causing a setback.

I can think of some time related factors....
- If an old job is lost, it'll take time to find a new one.
- If one is accustomed to not working, one might prefer
that lifestyle until cash shortage compels working again.
- If one is working under the table (no taxes), then
this might pay more than being an employee.
I know some who do this...& collect unemployment
while working full time.

For economists to tease out what's actually going on
can be very difficult.

 

[PoetPhilosopher]

Looks like my socialism gods prevailed.

 

[PureX]

There's a balance in business.
Pay too little, & one gets fewer worser workers.
Pay too much, & one doesn't make money.
Everyone searches for that balance..

No they don't. What they search for is a way to get as much labor value as possible from the employee, while giving as little compensation as possible to the employee, in return. And thus maximizing the profits to themselves. NO ONE is looking for any balance. What they're looking for is the point of maximum exploitation.

Which sadly, then, drives the employee to do the same in return: to give as little labor value as possible to the employer, so as to make the minimum compensation that he gets from the employer more equitable. Isn't an economic system that operates by forcing everyone to screw everyone else just to stay alive, wonderful?

 

[Stevicus]

There is choice. Workers can take one job or another.
They can seek higher pay or not. And when offered
pay in exchange for being unemployed, this too is a choice.

I've known some people who delayed going to work until
unemployment benefits ran out. So this is a choice that
exists in the real world.

Realistically, there are various factors which can and do limit people's choices.

However, this is another irony about a society which emphasizes opportunity and choice. If more and more people actually do it, by seeking out higher pay or similar ways to elevate (or at least maintain) their position, then the employers who depend on low-wage workers will be put into a more difficult position.

For a long time, I've heard the mantra from the arch-conservative, low-wage employers who kept saying "Well, if they don't like working here, they can always leave. Nobody is forced to work here." But now that it's actually happening, they're wondering why no one wants to work for them. They're being hoisted by their own petard.

I can think of some time related factors....
- If an old job is lost, it'll take time to find a new one.
- If one is accustomed to not working, one might prefer
that lifestyle until cash shortage compels working again.
- If one is working under the table (no taxes), then
this might pay more than being an employee.
I know some who do this...& collect unemployment
while working full time.

For economists to tease out what's actually going on
can be very difficult.

I think we're at a point where this country might have to seriously rethink and reconsider its general philosophy regarding management and labor.

 

[Revoltingest]

No they don't.

An opinion based on your vast business experience?
No, we all try to strike the best balance.
It ain't easy.
But apparently it appears so to those who don't play the game.

 

[metis]

For a long time, I've heard the mantra from the arch-conservative, low-wage employers who kept saying "Well, if they don't like working here, they can always leave. Nobody is forced to work here." But now that it's actually happening, they're wondering why no one wants to work for them. They're being hoisted by their own petard.

Yep, it's only what's good for the employer, and to hell with the employee. Like the employee being told they have to give at least a two-week notice, but the employer can dump them immediately.

This is why I strongly favor employee-owned businesses, and if that's not possible, then I much prefer union shops. Of course, undoubtedly most employees don't like either because they want the deck stacked only in their favor while probably claiming they believe in democracy-- ya, democracy as long as it doesn't have to apply to them.

 

[Revoltingest]

For a long time, I've heard the mantra from the arch-conservative, low-wage employers who kept saying "Well, if they don't like working here, they can always leave. Nobody is forced to work here." But now that it's actually happening, they're wondering why no one wants to work for them.

The arch-liberal mantra of "no one wants to work for them"
is an absurd mischaracterization. There is a labor shortage,
ie, wages are rising because the demand for labor isn't being
met. But many people are working....everyone I know IRL
who isn't retired is employed.
The unemployment rate is 5.9% per....
What Is the Current US Unemployment Rate?

 

[Revoltingest]

Yep, it's only what's good for the employer, and to hell with the employee. Like the employee being told they have to give at least a two-week notice, but the employer can dump them immediately.

Employees don't have to give 2 weeks notice.
That's just a commonly accepted time frame.
But employers in my vast experience give more
notice for layoffs...ranging from 2 weeks to 2 months.
Of course, I've terminated some immediately for cause,
eg, theft, threatening co-workers.

 

[Shadow Wolf]

But the thing is, the unemployment benefits really shouldn't be a factor. That is, if we're going to accept the notion that people take low-paying jobs "by choice." Clearly, if other choices exist, then these employers go begging for workers. If workers really wanted these jobs, they'd be lined up around the corner, willing to do it for free. Since that's not really happening, we might consider looking at other theories.

However, I do understand that these are just early figures. We can check again in 3 to 6 months and see where things stand. Too many unknowns right now, especially with this Delta variant hobbling things and causing a setback.

I really don't think things will change. These are low wage, high stress jobs that are accident prone and come with bombardments of abuse from customers. If things don't change many if these businesses probably should go under if they won't move to make things better for their workers (like better pay and protections and powers against abusive customers).

 

[fantome profane]

Employees don't have to give 2 weeks notice.
That's just a commonly accepted time frame.
But employers in my vast experience give more
notice for layoffs...ranging from 2 weeks to 2 months.
Of course, I've terminated some immediately for cause,
eg, theft, threatening co-workers.

I have been laid off a few times in my life and I know dozens of others from different companies that have as well. In my experience this never happens. Never have I been given advanced notice nor have I ever heard of such a thing, Perhaps it is different down there, but here employers do everything they can to avoid employees knowing about a layoff before it happens, for fear that they would quit and find other employment before the shutdown. If you have a production run scheduled to go until March, and your workers start leaving in February you are screwed.

 

[Revoltingest]

I have been laid off a few times in my life and I know dozens of others from different companies that have as well. In my experience this never happens. Never have I been given advanced notice nor have I ever heard of such a thing, Perhaps it is different down there, but here employers do everything they can to avoid employees knowing about a layoff before it happens, for fear that they would quit and find other employment before the shutdown. If you have a production run scheduled to go until March, and your workers start leaving in February you are screwed.

You must live in a less progressive country.
My experience has been that employer & employee
generally try to cooperate with each other. But my
experience is limited to professional fields, eg,
engineer, skilled trades, manager, accountant.

 

[PureX]

An opinion based on your vast business experience?
No, we all try to strike the best balance.
It ain't easy.
But apparently it appears so to those who don't play the game.

We all have to play this game. It's called capitalism.

 

[fantome profane]

But my
experience is limited to professional fields, eg,
engineer, skilled trades, manager, accountant.

Ah, that explains it. The elites often assume their experience is the same for everyone. Often it is not.

 

[Revoltingest]

We all have to play this game. It's called capitalism.

No, you could form a commune or cooperative.
But no matter what economic system you live under,
there'd be a game to play. The issue is which game
works best. Capitalism faces a lack of alternatives.