Not a Surprise

An analysis of states that have cut back extended unemployment benefits find no evidence of any increase in employment as a result.

This is not a surprise.  Economists, at least the non-wingnut ones, have said that the impact of unemployment benefits on employment are pretty minimal:

The cutoff of federal unemployment benefits in much of the country was meant to bring a flood of workers back to the job market. So far, that flood looks more like a trickle.

A total of 26 states, all but one with Republican governors, have moved to end some or all of the expanded unemployment benefits that have been in place since the pandemic began. The governors, along with many business owners, have argued that the benefits discourage returning to work when many employers are struggling to hire.

Several recent studies, however, have concluded that the extra payments have played only a small role in this year’s labor shortages. And they found at most a modest increase in employment in states that abandoned the programs — most of them in June — even as millions of jobless workers have had to cut spending, potentially hurting local economies.

“The idea was that there were lots of jobs — it was just that people weren’t looking. That was the narrative,” said Arindrajit Dube, a University of Massachusetts economist who was an author of one of the studies. “I don’t think that story holds up.”

………

All those programs are set to expire next month unless Congress extends them, which appears unlikely. President Biden on Thursday encouraged states with high unemployment rates to use separate federal funds to continue the programs, but it is unclear how many will.

Advocates for the unemployed say they are worried about what will happen to workers if they lose their benefits, especially as the more contagious Delta variant of the coronavirus spreads nationwide.

………

Recent evidence suggests that if the benefits do end, most jobless workers won’t immediately find jobs, despite a record number of available positions.

In the most detailed study to date, also released Friday, Mr. Dube and several colleagues used data from Earnin, a financial services company, to review anonymized banking records from more than 18,000 low-income workers who were receiving unemployment benefits in late April.

They found that ending the benefits did have an effect on employment: In states that cut off benefits, about 26 percent of people in the study were working in early August, compared with about 22 percent of people in states that continued the benefits.

But far more people did not find jobs. The researchers had data for 19 states that ended the programs; in those places, they found that about 1.1 million people lost benefits because of the cutoff, and that only about 145,000 of them found jobs. (The researchers argue that the true number is probably even lower, because the workers they were studying were the people most likely to be severely affected by the loss of income, and therefore may not have been representative of everyone receiving benefits.)

The people clamoring to cut off benefits don't care that it won't help people.  The cruelty is the point.