It is quite rare to see a state turn down federal money. It is rarer still to see states turn it down in the name of improving their own economies.
Fortunately, several states are now doing just that. Why? Because President Joe Biden’s economic stimulus is making what’s rational for workers irrational for the economy as a whole.
At this point, the fact is unavoidable: The Biden administration’s foolish decision to extend increased unemployment benefits through the summer is clearly retarding the job market’s recovery. It made sense to pay out something to workers in exchange for government restrictions on their livelihood. But the long-term extension of extra-generous benefits has turned all the incentives on their head. For too many workers, the increased benefit makes it at least as profitable not to work as it is to work. And how can you blame anyone for not working if it actually costs them money?
Don’t blame the workers. Do blame the White House that chose to frame their choice for them so irrationally.
And indeed — how short-sighted it was in hindsight. It is still May, and the Centers for Disease Control and Prevention has now rescinded guidelines recommending mask-wearing in most contexts. Yet, the Biden administration has saddled the nation with payments for not working that will last straight into September, even though the virus’s spread has been arrested. That’s three-and-a-half more months of needless, counterproductive payments that are actually preventing the restoration of the labor market to pre-coronavirus levels.
The backlog of unemployment claims in California keeps growing, as embattled Democratic governor Gavin Newsom faces a reelection campaign brought on by his handling of the coronavirus pandemic.
Calls to the state’s unemployment office were up almost 40 percent last month, with 76 percent of those calls still unanswered, indicating a surge in claims that will soon be filed, according to the Sacramento Bee. California’s Employment Development Department said the surge has been driven by citizens reaching the end of their benefit year and the passage of federal benefit programs in the past few months.