Speaker 1: All right, welcome, everybody, I want to start today with something different,
we're not going to look at media pieces right now. We're going to look at some interesting op ads
that have been written in the last 24 to 48 hours. They relate to one is in The New York Times. One's
in The Washington Post. They relate to pretty big issues facing us right now and questions about the
economy and democracy and upcoming elections and so on. So let me know if this is interesting to
you and maybe we will do more of this. I want to start with an article in The New York Times called
Americans Don't Want to Return to Low Wage Jobs. This was written yesterday. It's an opinion
piece by Daniel Alpert, who's a senior fellow in macroeconomics and finance at Cornell. And it's
specifically about this issue where the right is framing it as businesses can't find people to hire
because people are making too much money off of this enhanced unemployment.
So people would rather stay home and make more or the same or close to the same rather than go in
and get some job. And that is not the way I would characterize the situation. And I think
this article does a lot of interesting, a good job of pointing out a lot of the aspects of this.
Let's skim through it. Daniel writes, The hope for hopes for a booming pandemic recovery.
Growth led by job gains in the millions every month were dealt a blow in recent weeks by a
disappointing April jobs report. Perhaps we'll see better when results for mayor released this
week on Friday. But for weeks, many Democratic policy and political circles have been queasy
about addressing the connection between federally supplemented unemployment insurance benefits
and the slowing pace of reemployment. At this stage of the recovery from the pandemic, there
is almost certainly a common sense connection. If you were a low wage worker, why aggressively
attempt to go back to work at a lousy, low paying job when you can make more money by collecting
unemployment benefits? Still, Republican politicians are getting it wrong, too. They
are citing countless news reports that businesses are struggling to fill certain positions as both a
reason to end federal unemployment benefits and as evidence that the extra benefits were too generous
in the first place. They worry that the ability of some workers to stay on the sidelines of the labor
labor market unless employers offer wages that trump jobless benefits could result in dangerous
wage inflation, a potential increase in labor costs that they believe consumers will pay for
in the form of higher priced goods and services. This is the key part. That argument simply does
not hold water either over the coming weeks and months, as this aid for the jobless phases out
there will be a flood of anxious job seekers pouring into labor markets, even if a significant
share of workers are temporarily avoiding taking low paying jobs. While benefits remain generous,
then there is no true labor shortage, as many economists and market commentators are calling it.
This is essentially the argument I've been making for some time, which is the enhanced unemployment
was one of the best parts of what was done by both the Trump administration and the Biden
administration. Remember two stimulus packages under Trump for covid, one under Joe Biden with
any welfare system or with just about any wealth, wealth, welfare system, there will be some people
that are better off on the welfare than getting out of the situation in which they qualify for the
welfare. That's always a thing. And in this case, because of these enhanced unemployment benefits
and the fact that different states have different baseline benefits to begin with, it's conceivable
that some people made more by not working than by working. We're not denying that. The point is
overall at the macroeconomic level, the enhanced unemployment saved so many people
in so many families for for millions and millions of people. And it's ending and it's ending. Now,
the other side of this, which we will get into here, is that there's the left wing argument
which counters the right wing argument that was just outlined, that if people don't want to go
and work for you, then your wages are too low. I mean, the way that a market works is
if you don't like the supply of labor available to you, if you're offering eight bucks an hour, then
maybe you offer 10 bucks an hour and that gets more people interested. Now, the counter would be
it's being the the the we have an artificially inserted problem here. It's not that the market
has dictated eight or 10 or 12 or whatever the minimum wage is in some places is too low.
It's that there's this government coming in on top and dropping this enhanced unemployment
and that's distorting the market. Well, it's going to end, right? If that's your argument,
that's that's soon to end. Daniel. Rights enhanced benefits are ending every day for the millions of
Americans who have benefited from the pandemic emergency unemployment compensation program,
which extends unemployment insurance for 13 weeks to those who exhausted their conventional
state and federal unemployment benefits, all extra federal supplements will end on September 6th,
including the general three hundred dollar weekly benefit and the pandemic unemployment assistance,
which provides aid to those who are self-employed, going on to say in the aggregate. During the week
that ended on May 1st, the unemployed were still receiving almost 10 billion dollars in
federal transfers per week. That's money being directly injected into local economies. Shutting
off that pipeline means the economy at large could experience one of two adverse outcomes.
Either there won't be enough jobs for the people eventually looking for work
because so many businesses closed or the jobs left will be frankly lousy or jobs. The latter
possibility would leave a large share of Americans underemployed, which would cause
a wide reduction in household income among the country's less wealthy half. This is a key point.
Once unemployment ends and a lot of these folks who, according to the right, have just
been hanging out on unemployment, making more than they would at some of the jobs that are available,
many of them are going to become job seekers. Many of them are going to become willing to accept
some of these crappy or lousy jobs. This will, I guess, satisfy some on the right that these lazy
people have finally gotten off their You-Know-What and gotten a job macro economically. It's not
going to be good when these folks accept these subpar jobs. If you adopt a A spending is stimulus
mindset a demand side mindset. If Joe whatever. Right. If some person who was making just picking
numbers five hundred and fifty dollars a week between state and enhanced federal unemployment
has no choice because the unemployment benefits end to accept a job making half of that.
They now only have half the money to spend in their community. Do you think that's going to
be good for all of the small businesses in that community that Joe goes from having?
Five hundred and fifty dollars to spend to only having two hundred and seventy five dollars to
spend? No, that's a massive that's the problem that happened when the pandemic hit.
It was a massive reduction in demand and that is what caused a lot of business closures
and the need for a lot of the stuff in the first place. So Daniel Alpert wraps by saying
the majority of the jobs that aren't back to pre pandemic workforce levels
are very low income jobs. They are what the US private sector Job Quality Index, which I co
created, called low quality jobs. Through March of this year, most of the private sector jobs
eliminated during the pandemic that haven't been restored. Our production and nonsupervisory jobs
that offer weekly pay averaging less than seven hundred and fifty dollars pre pandemic. There are
more than 45 million low paying jobs like these, constituting roughly 43 percent of all production
and nonsupervisory jobs in the country. This is not a mere unfortunate corner of the jobs
market. That's a huge piece of it. And then the big picture that he points out here is the chronic
problem we face as we put covid-19 in the rearview mirror is that the U.S. economy before the
pandemic was incredibly dependent on an abundance of low wage, low hours jobs. It was a combo that
yielded low prices for comfortably middle class and wealthier customers and low labor costs for
bosses, but spectacularly low incomes for tens of millions of others. This dynamic was first brought
into stark relief by the discourse about essential workers during the worst of the pandemic now will
be highlighted by the frustrating, unequal outcomes of this great reopening. So it's
not as simple as these jobs should just pay more and then everybody's going to want them. People
are going to want these jobs when unemployment runs out. The problem is that it's not good for
the economy at the macro level to have so many people that are in such a precarious situation.
While I think it maybe goes too far to simply say if people don't want to come and work for you,
as many restaurants, for example, are complaining, then your wages are too low. In many cases,
the wages are too low. That's absolutely true. But there is a bigger economic reality here, which is
if just a couple hundred bucks in unemployment benefits makes working not worth it for so many
people, which is what the right claims, that means that a huge portion of those who are employed
we're now we're not talking about in a pandemic, the folks that are saying I make a little more
the same by not working, not in a pandemic when you have even a low unemployment rate.
A lot of people are a hundred dollars a week from it not being worth it to go in. That's terrible
for the economy. That means that so much of the spending that the economy depends on is hanging by
a thread. And this is the point many progressive economists would make. So the takeaway is not
as simple as unemployment benefits were too high and so everybody was staying home. Now that it's
not that simple, it's not as simple as well. This simply means all of these businesses should raise
wages. Some of them should depends on the state that we're talking about. The point is, we have
an economy that is so precarious, so precarious that just a hundred or two hundred dollars a week
makes all the difference in one being able to afford their meager lifestyle and in it
no longer being worth it to go in and actually work these jobs. That's really the issue here.