There is excellent news as up to 18 states indicate that they’re going to opt out of the federal expansion and addition to unemployment insurance.
It’s excellent not because this will drive poorly paid workers back into working for their living. Rather, it’s excellent because this is what economists so desire and all too often don’t get: a true, natural experiment.
Our problem with the big economic questions, such as growth, employment, rising wages, and so on, is that we don’t have much evidence. We know the details of a handful of economies for a few decades, but that’s about it. Much of our other evidence about macroeconomics, those big questions covering the whole economy, is rooted in a series of guesses of varying quality. We can’t rewind an economy and try again with a different set of policies.