Cutting Unemployment is Cruel & Stupid

Good morning, bad news: 35 million Americans just lost their federal unemployment income at the worst possible time during one of the deadliest covid-19 spikes we’ve seen so far.

And let’s get one big corporate-funded lie out of the way. Cutting unemployment benefits will not get people to go back to work - every single economic study on this question has come to that same conclusion. It will. not. work. The decision to end those benefits is cruel, stupid, and intended to punish the working class for demanding higher wages throughout the pandemic during an insane increase in cost of living in every state - and again, it will. not. work.

The Pandemic Unemployment Assistance that’s been almost single-handedly saving workers from a chain reaction of mass poverty was allowed to expire on Labor Day, despite the fact that this program was not only a net benefit to the economy, it was also incredibly cheap to run. Out of a total 6 trillion dollars that has been spent on covid-19 stimulus, less than 1/10th, or 567 billion was spent on unemployment payments for the most marginalized and least economically stable workers in America, who are also the biggest drivers of its economic growth. At the same time, in 2020 alone, 2.3 trillion was sent directly to companies who were busy laying off tens of thousands of workers, along with another 650 billion just in tax breaks for the ultra-wealthy and their businesses.

The stimulus packages were a political negotiation that used an impending economic collapse to hand the wealthiest americans and their companies trillions of dollars of taxpayer money, at a time when they did not need it, while giving actual suffering taxpayers a tiny fraction of that amount, through arbitrarily low stimulus checks, and a weekly unemployment payment that has now expired.

And while the ultra-wealthy added exactly 1.3 trillion dollars to their net worths during the pandemic, workers lost exactly 1.3 trillion dollars from job losses and pay cuts. And for the last year companies have been complaining that there’s a worker shortage, and people are lazy and don’t want to work, and Congress has effectively given up on any minimum wage increase at a time when inflation and cost of living have completely outstripped any ability for low-wage workers to survive, banking on the fact that people would rather go back to making starvation wages than literally starve. And they’re wrong.

Companies who are claiming that these benefits are the reason people haven’t gone back to work, are, frankly, fucking stupid and more important fucking dangerous. First of all, the current COVID-19 spike is worse than it was last year. The difference is that politicians and companies have come to normalized this fatality rate, and no longer see it as an economy impediment. We already saw this happening as tens of thousands of essential workers were sacrificed while being underpaid and overworked, and now that concept just applies to the entire working class.

But like I said, it’s also stupid - ending these benefits won’t get people to come back to work. More than half of the country, 26 states, ended their unemployment benefits early for the explicitly reason that it was keeping the unemployed from looking for jobs and fueling a labor shortage. In the months since, the unemployment rate in those states has been almost totally unaffected - 7 out of 8 people who saw their benefits cut still didn’t go back to work, and the unemployment rate budged a paltry 4.4%

And while the unemployment rate barely moved, consumer spending flattened. So companies that expected workers to come flooding back into low-paid jobs for no benefits, instead saw their own profits collapse. Every single economic study on this issue has come to the same conclusion: the idea that workers are lazy and staying home because of unemployment benefits is a lie, and it’s being told in bad faith by corporations and politicians - who KNOW that workers will come back to work for higher wages and better benefits - but of course, that would mean spending a small fraction of the unprecedented wealth that has been swindled out of the economy by the ultra-wealthy just in the last year, on the people who are generating that wealth for them.

We don’t have a worker shortage, we have a wage shortage - and an employer class that is refusing to acknowledge the fact that instead of trying to survive in this fake economic bubble they’re creating, people are cutting spending, moving in together, moving to cheaper states, and generally lowering their standard of living, and they’ll keep doing that while consumer spending collapses. And consumer spending makes up 70% of the GDP - so ultimately, the greed that’s been driving the austerity behind low wages, cutting unemployment benefits, and wealth hoarding, is on track to actually collapse the US economy. It might not happen, but if it does, we know exactly why.