Here & Now

Pandemic Unemployment Aid and the Workforce

Robin Vos:

If you pay people over $17 an hour tax-free to stay home and not work, there are going to be fewer people working. It’s not rocket science.

Frederica Freyberg:

Because he said it’s keeping people from taking a job, Assembly Speaker Robin Vos wanted to end the $300 per week extra unemployment payments, but Republicans in his chamber failed to get enough votes to override Governor Evers’ veto of a bill to do just that. But does the extra money that expires in September actually act as a disincentive to work? To that question we turn to labor economist and associate director of COWS, formerly known as the Center on Wisconsin Strategy at UW-Madison, Laura Dresser joins us. Thanks for being here.

Laura Dresser:

Thanks for having me.

Frederica Freyberg:

So I know there are these studies like from the Federal Reserve that say the enhanced unemployment only results in a small number of people choosing benefits over taking a job, but it does still seem intuitive that if the benefits are better than whatever job you lost, why wouldn’t a person stay home?

Laura Dresser:

I mean, I think if you’re just going to hold that up, you can get a job or you can get these benefits, you can kind of see that. And that’s why I think the studies find a very small impact. But it’s a very small impact. What’s really going on in this labor market is we just had a once in a century, we hope, pandemic. Our labor, we contracted dramatically and the workforce — the number of jobs we have today is still 100,000 — more than 100,000 fewer than we did in February, 2020. And so the — and we’ve all faced incredible choices about work and our families and our health. And we are all figuring that out. I think all that is going on. The unemployment insurance benefit, the increase to that literally helped people stay in their homes, literally helped people keep food on their tables. It still is doing that work that is so important. And to act as if — that if we take that money away, that will bring a flood to this labor market, which there have been longstanding shortages — longstanding shrinkage, I think that just misplaces what the issues, what the complexity of the issues holding people a little bit away from work these days is.

Frederica Freyberg:

Yeah. Because I understand, you know, people describe other impediments to going back into the job force, like child care, transportation and, as you mentioned still health concerns and perhaps now increasing health concerns.

Laura Dresser:

Yes. I mean, I think we all want to pretend that — maybe a month ago, we all wanted to pretend, okay, this is over, now we get a new thing. But we understand I think today better than then that this is a dynamic thing and variants are going to create new situations. And if we’re not all vaccinated or even if we are, variants may create these kinds of situations. And what workers who consistently in coming into this pandemic, you know, the workers that have faced very volatile hours, very low wages and never get health insurance through their jobs. You know, health insurance is a lot more important now and a restaurant job where you’re exposed to a lot of people and you never get health insurance I think looks a little less appealing.

Frederica Freyberg:

So experientially though there do seem to be these supply chain problems and service and hospitality worker shortages but again, is that because all the federal relief benefits are too generous? Or do employers need to do something to kind of attract and retain people?

Laura Dresser:

I’d really look to — there isn’t one experience of the employers in this labor market. There are — it is harder to find workers in this labor market, but there are employers that are finding workers. They’re employers that attend to their scheduling practices. Their wages are not rock bottom. They offer benefits when they can. And then the government has a role to really make a massive investment in child care, to make it accessible, affordable, stable. Good-paying jobs for the child care workers so people have the supports they need to know their kids are safe too.

Frederica Freyberg:

A lot. Laura Dresser, thanks for joining us.

Laura Dresser:

Thanks for having me.