This is a broad generalization, and for most unemployed Americans, wrong.
The New York Times did a very large, good chart about this a few months ago. Only people in about half of the American states might possibly end up getting more while unemployed than they did at work. The way some states' unemployment systems are set up, it's simply not possible.
Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.
The whole "Americans are making more money from not working" is not only a three-month-old meme, it's only true in a small percentage of cases. The only thing it is good for is getting people like my mother riled up with, "People aren't working because they're getting too much unemployment!" Completely ignoring the fact that there simply are no jobs to be had, and businesses are still shutting down left and right.
What’s the point of looking at the number of states? Most people are getting more in unemployment than they made before.
> A new analysis by Peter Ganong, Pascal Noel and Joseph Vavra, economists at the University of Chicago, uses government data from 2019 to estimate that 68 percent of unemployed workers who can receive benefits are eligible for payments that are greater than their lost earnings
The folks arguing this in Congress seem never to have faced the practical issues that come with loss of employment.
Plus, I'll gander that among the 32% who qualified for the benefits noted, but whose income was still not replaced during the relevant time period-- the shortfall probably was 50% on average or more. So we cut that benefit because many low-wage-earners are receiving too much? Really? Sometimes it's hard to believe political discussion in the U.S. has devolved to this.
> Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.
This is backwards. The lower the income the greater the relative benefit from the fixed $600 assistance since as a rule of thumb unemployment pays a little over half of the replacement wage.
The simple solution would be for the government to also pay employed low-wage workers. Then, everyone can continue to buy food and pay rent and no one is earning less while working.
The $600 UI benefits were mostly done as a means of practicality, because our unemployment systems were so out of date to efficiently calculate someone's actual wage. It's sorta a general broad stroke implimentation that figured that sure, some people may be "overpaid" compared to their regular wage, but the political necessity of passing it ASAP was so great that any delay would be immensely costly.
> The $600 UI benefits were mostly done as a means of practicality, because our unemployment systems were so out of date to efficiently calculate someone's actual wage.
It wasn't about actual wages, which state unemployment systems already handle just fine. It was that many systems are too difficult to rapidly change to incorporate complex formula adjustments, but a flat +$N is more easily doable.
Not necessarily so! Gig (and self-employed) workers were included to participate in UI under CARES act, who normally are not eligible for UI benefits [1].
You are correct however in clarifying my statement above.
> Not necessarily so! Gig (and self-employed) workers were included to participate in UI under CARES act, who normally are not eligible for UI benefits
Sure, and handling them is a potential system problem, but not one addressed by the flat $600 vs. a more complex add-on choice.
Everyone seems to be acting as if this was ever going to be a permanent thing rather than an extraordinary measure for extraordinary times.
The people who should have something to say here are the ones making less who didn't lose their "essential" jobs.
That points at an even simpler solution: toss some free shit to everyone. Yes, it's ultimately paid for by everyone's taxes, etc, etc, but there's no way around this pandemic having a very high economic cost. It's just a question of tackling it actively and having that cost go towards productive programs, or paying to deal with the disaster that's resulting from our government being incompetent.
I don't see how having only 50% make more is any less ludicrous.
Should anyone ever make more money while unemployed than when employed?
Won't that completely alter the valuation of work and with that the proper functioning of the economy?
PS I know people that own businesses that can't reopen because people that usually would work for them don't want to come back as the salary he pays is less than the unemployment benefit.
Isn't the ultimate goal of technology for no one to have to work unless they want to, while providing utopian material abundance to everyone regardless of whether they work? Of course this isn't possible with our current level of technology, but isn't that what we are striving towards?
I mean, what's the point of building AI and robots and advanced energy sources and bio engineering if they don't fundamentally improve the quality of life for everyone? I certainly don't think there's some moral requirement to force everyone to work.
People thrive when they have a purpose in life and problems to solve. Take away their problems and purpose and:
1. they'll invent problems
I.e. "first world problems". We (in America, anyway) live in an incredible utopia by any historical standard. But I read on the news every day about an endless series of phony crises. (The coronavirus thing is a real crisis, but even so, by historical epidemics it is not that bad. The bubonic plague, for example, killed something like 35%.)
2. they'll be miserable and self-destructive
This is a well known problem with the offspring of very wealthy people who never had to try at anything.
3. they die
People often die shortly after their retirement. They don't survive the loss of purpose.
Jeff Bezos, Bill Gates and Mark Zuckerburg never need to work another day in their lives. Are you arguing they are miserable, self destructive, have lost purpose and will soon die?
People don't need a Sword of Damocles hanging over their head threatening them with homelessness, loss of medical treatment and hunger solely because they didn't find purpose in life.
How is being miserable and self destructive and losing purpose, as a worst case scenario, worse than homelessness, drug addiction, loss of friendship, family, self respect, health and medical treatment?
I mean, I don't see the connection. Are you saying that unless people are literally threatened with homelessness, starvation and death they won't find purpose on their own?
Some people do find purpose on their own. Many do not. I recall a story about a guy in his 90's who got a job as a Walmart greeter. The reporter asked him why not just enjoy his golden years? The fellow said he needed a reason to get up in the morning. He worked at that Walmart until he died, living many more (by all reports happy) years.
I don’t get it. Why would having his basic needs met stop him from being a Walmart greeter? If someone wants to be a Walmart greeter they can still do that. Basic income and social support doesn’t stop that.
Imagine your 30 year old son is living in your basement playing video games, which is all he's done since high school. You can easily afford to continue to support him - but how would you feel about it?
I'm guessing you wouldn't look down on your son for playing football hard in High School and trying to go pro. Would you berate your child for dreaming of playing for the NFL if they had some talent for the game? Well, nowadays, your son could go pro in video games. Tyler Bevins, for example, from the article, was entertaining over 14 million fans and was making over $500K per month.
If it's between my kids dreaming of going pro in eSports vs being a quiet Walmart greeter for 30 years - you can bet I'd encourage them to get good at those games. Play that Nintendo, son.
I'd council him that football is a career with a very small chance of success, with a high probability of brain injury and/or other debilitating injuries, and a profession you're forced out of young.
> Play that Nintendo, son.
If he's 30, still living in your basement and hasn't made a dime yet, that ship sailed long ago.
> a quiet Walmart greeter for 30 years
Somehow I escaped being a Walmart greeter :-)
Hey, you can advise or support your son however you wish. But don't ask others to pay for his Nintendo dreams.
its true, a lot of people need something to do, or to find some meaning in life
i guess the point is, at least as i understand it, we should be able to find the mission in life without that "sword of damocles" as the other poster said
maybe we can have jobs, or communites, or organizations that we serve in and contribute to them without necessarily needing to be compensated by them, but because we believe in them we contribute (our time, mind, effort etc)
also, the "need for purpose" might be a very mondern concept, i wonder how traditional societies (sorry for the loaded word) go a about life in that respect...
This is very narrow minded. Firstly, you imply that people find purpose in their jobs. Secondly, you seem to ignore that this purpose can come from other aspects in life than wage labour?
It blows my mind that people that are so prone to speaking about freedom wrt Capitalism always seem to be very uncomfortable with freedom in its literal sense.
This also reminds me of the opening lines of Bertrand Russell's essay "In Praise of Idleness":
"Like most of my generation, I was brought up on the saying “Satan finds some mischief still for idle hands to do.” Being a highly virtuous child, I believed all that I was told and acquired a conscience which has kept me working hard down to the present moment."
> you imply that people find purpose in their jobs
That's true for an awful lot of people. Even if their purpose is simply to take care of their families.
> you seem to ignore that this purpose can come from other aspects in life than wage labour
Labor is often a means to some other purpose.
> freedom in its literal sense
Freedom has many, many meanings, which should not be conflated with each other. "Free markets", for example, doesn't mean everything should be free of cost.
> That's true for an awful lot of people. Even if their purpose is simply to take care of their families.
And for an awful lot of people it's not. It will also be significant portion that finds purpose due to no other options as they try to make the best of their situation. I would not call getting paid to providing for ones family a purpose, since it would end if the person would be able to provide in some other way. If that was true, people would find purpose in standing in rationing lines.
> Labor is often a means to some other purpose.
That purpose-giving labour doesn't need to be economically coerced wage labour for someone wealthier. Especially if the scarcity is artificial it's most likely seen as an injustice and an insult.
> Freedom has many, many meanings, which should not be conflated with each other. "Free markets", for example, doesn't mean everything should be free of cost.
Yes, the term is used as propaganda. Which is at its most clear as soon as less work is discussed.
No, nobody should ever make more unemployed than unemployed, and that just shows that we need to raise the minimum wage -- not lower unemployment benefits.
That isn't actually how that works, for a lot of interesting reasons, but the most objective answer I can give you is this. Since the 1970s, the M2 money supply has 15X'd, but inflation has only divided value by 7. Just increasing the supply of money in an economy doesn't cause inflation on a 1:1 scale. If everyone made an extra $600, they would more than likely obtain an additional $280 in added welfare.
I think it's not an unrealistic way of looking at it to say that our floor is $280, and in reality, we could see up to $600 or more in net welfare added.
What you're actually doing is bringing the poor and the wealthy closer together, reducing inequality. In places with a $15 minimum wage, standard of living actually goes up for the poorest citizens.
How much do you think would entice someone to be a cashier and work 8 hours a day when someone on unemployment in the current system gets say $3600/month. Imagine a poorer state where you can easily make do with $3.6K per month.
My question is pretty much what would you have to pay someone to show up for a somewhat unpleasant workplace when they don't need an income for a decent life already? (and they would lose their previous income if they did work)
> My question is pretty much what would you have to pay someone to show up for a somewhat unpleasant workplace when they don't need an income for a decent life already? (and they would lose their previous income if they did work)
Market rates.
Without answering your question directly, that's my answer. Somewhat unpleasant workplaces should be automated, and people should be paid a living wage. If you want them to go to work pay them market rates, or make it pleasant. That's a society I want to live in. The market rate should be determined as whatever they need to pay you above a basic existence to motivate you to do a specific job -- not above death.
I'm not sure why you're advocating a society that, out of some moral imperative around the value of work, creates unpleasant workplaces at wages you can barely live on, and considers that a job well done. Mandatory and uncomfortable is a minimum standard most developed nations left behind a long time ago.
Yes this may cost me more, but you know what, if that means I don't have to stumble over heroin needles and homeless encampments on my way to work, that's a fair trade.
Because we don't have any efficient way for states to figure out exactly how much people were making before. Lawmakers have been on a campaign to defund, stifle, and keep unemployment insurance hard to access. This has resulted in ancient systems (even by government standards) that makes it very hard to figure out how much people make.
I cannot find the specific reference for it, but I believe I heard people saying some of these systems were having a hard time paying out over $1,000 a month because they were so old and outdated.
This is the case of "don't let the enemy of the perfect be the enemy of the good" that is repeated a lot in policy making. Sure, we could create a more perfect solution, but what are the costs associated with crafting that perfect solution under the specified given time frame?
Good news for him, then! Starting Monday he doesn't have to. Give it a couple of months and he can probably hire at $2 an hour, or maybe just room and board. There's a whole lot of people about to get evicted, after all. He might have a bit of a hard time getting customers, what with everyone being either broke or terrified into hoarding whatever they've got or both, but what the hell, right? They say a rising tide lifts all boats. What do you think happens when the tide goes out and stays out?
If you're not scared shitless, I have to assume you cannot possibly be paying attention.
you talk exactly like someone that has no idea what it is like to run a small business that serves a community around them.
you are jumping to conclusions that he must have been exploiting his staff etc. and you are disregarding the fact that you are punishing the most entrepreneurial, whose entire livelihood depends on this. He built the business for 20 years, has 8 trucks, garages, equipment, loans etc all goes sideways if he has to double his prices especially in this environment. He now has to compete against an unrealistic, government set salary that ironically, is paid partially from taxes imposed on him.
Maybe he should go on unemployment, and ta-da all is solved, he is now making a good salary
They missed it because they were too busy enriching themselves at the expense of the poor while patting themselves on the back and calling it rationality.
The more interesting question is whether wages were too low to begin with. Plenty of evidence points to wage stagnation in the lower-wage jobs starting in the 1980s and continuing to today. A huge number of americans collecting SNAP benefits actually work at companies like Walmart and Amazon. Is it possible the answer to the question is "we should pay workers more"?
No, the economic policy for keeping our economy from entirely imploding, instead of just partially imploding as it actually has done, has been to introduce an unusually high unemployment benefit. Raising wages has been a beneficial side effect.
I say "has been" because, again, the CARES Act supplementary benefit expired today, with no clear replacement plan in sight, and no equivalent replacement plan anywhere on the horizon.
The massively high unemployment payment is a large part of why we saw a 33% drop in GDP last quarter. You can argue whether it was good or bad that we [over-]paid people not to work, but the obvious effect is that GDP cratered because working would make most people lose money.
That's a remarkable claim - namely that the GDP hit was primarily due to supplemental unemployment, rather than to a collapse in consumer demand across many sectors as a result of the pandemic.
You'll understand, of course, that I'm going to need something more than your unsupported assertion to be convinced that this is the case.
I'm not unsympathetic, although I admit I've sounded that way just now. Terror will have that effect on a person, I suppose. Glibness aside, I spent enough years working in a company with three total employees counting myself and the owner to have a sense of what things must be like for someone trying to operate on a shoestring in this kind of environment. In a word: desperate. I'd imagine it's a familiar feeling to people who have been paid so poorly in the recent past that they find $15 an hour a step up.
Ideally, you'd see living-wage unemployment in a situation like this one matched by the kind of substantial, ongoing supplemental loans to small business owners that'd enable them to pay a living wage directly, and thus successfully compete in the labor market. But our shitshow excuse for a government - and that's not partisan; I'm indicting all sides equally here - has been no more successful at that than it has at supporting workers. And now it looks very much as if we're going to have an economic disaster no matter what anyone does.
Well. Judging by yesterday's GDP figures, I suppose I should say more of an economic disaster.
I will keep this short but I think paying predermined sums like the $600 is a terrible idea.
the number of people for whom this is exactly the right amount is tiny,
all it generates massive imbalances between those for whom this is too much and those for whom this is too little (or causes all kinds of unintended consequences)
I read the a story with the two cashiers, one got laid off, the other not. The one that did not get laid off had to show up to work during the early pandemic when everyone was freaked out, worked eight hours a day then, at the end of day took home less than the second one that got laid off and stayed home all the while.
You're not wrong. It's been a clusterfuck. Where we differ is that you seem to argue what makes sense is to return to status quo ante, and I don't see how that makes any kind of sense when the clusterfuck we're arguing about is a side effect of the order-of-magnitude larger clusterfuck that is the economic effect of the ongoing pandemic, and the US government's ongoing and in my opinion frankly treasonable mishandling of said pandemic.
Please excuse my language. At the moment I can find no word in my lexicon which is both less vulgar and still able to capture my depth of feeling.
It's 100% wrong as of today (the article is from May), as the $600 supplement has expired and won't be renewed. In fact I'm not sure why HN is discussing an expired, won't-be-renewed program as if it is current.
Because it's actually being debated right now as to whether to replace it with the same, less, or nothing, and setting perception about particular ways is in the interests of people who want a particular outcome of that debate to either occur and not have its supporters politically punished at the upcoming election, or, OTOH, to not occur and have its supporters punished at the election.
The New York Times did a very large, good chart about this a few months ago. Only people in about half of the American states might possibly end up getting more while unemployed than they did at work. The way some states' unemployment systems are set up, it's simply not possible.
Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.
The whole "Americans are making more money from not working" is not only a three-month-old meme, it's only true in a small percentage of cases. The only thing it is good for is getting people like my mother riled up with, "People aren't working because they're getting too much unemployment!" Completely ignoring the fact that there simply are no jobs to be had, and businesses are still shutting down left and right.
But, each to her own bubble.