The Bureau of Labor Statistics released its statewide employment data today, which allows us to look at unemployment rates in states that stopped paying expanded UI benefits in June. Did this get people back to work faster? Did unemployment go down more in states that stopped the expanded benefits?
Experts will probably provide us with the results of sophisticated models sometime soon, but I can provide unsophisticated results right now. All I did was calculate the change in the unemployment rate between May and July for all states, and then took two averages: one for states that ended expanded benefits early and one for states that have continued them. Here are the results:
- States that ended benefits early: -0.7 percentage points
- States that continued benefits: -2.4 percentage points
In other words, states that ended benefits early saw unemployment drop only slightly. States that continued paying expanded benefits saw unemployment drop three times as much. (Note: If you calculate the percent drop, rather than in percentage points, the results are pretty much the same.)
UPDATE: The sophisticated models are starting to arrive! Here's a chart from Peter Ganong, an economics professor at the University of Chicago:
Like me, Ganong finds that states which continued UI benefits had higher employment growth than states that cut off benefits early. However, the difference is small. Full explanation here.
UPDATE 2: As I said, my conclusion was the result of the simplest possible calculation. Here's the Excel spreadsheet so you can check my work and tell me if I screwed anything up:
Not the best test because the red states which ended benefits are mostly the poorest-performing economically usually and expected to recover more slowly even under the same conditions. But obviously this does not support the contention that continuing benefits is a major impediment to reducing unemployment.
Well sure, but you're not normalizing for how culturally and economically backward the Republican-controlled states are.
Yes. Also, the authors of this study - https://files.michaelstepner.com/pandemicUIexpiration-paper.pdf - found that the decline in spending by those who didn’t find a job was not offset by pay for the fewer who found work. So overall, the benefit-ending states’ economies lost. Econ 101: one person’s spending is another person’s income.
Isn't this the kind of thing where you want to draw a scattergraph and trend lines through the two sets of scatters? Massachusetts, Hawaii, and Oregon are contributing a lot to the average across the blue states...
Massachusetts, Oregon, and Hawaii...
Hmmm ... one on the East coast, one on the West coast, and one halfway to who-knows-where in the middle of the ocean. I wonder what that tells us?
That the statistical outliers are also geographical outliers?
Massachusetts, since it contains Harvard University, is at the center of the world, as every Harvard graduate know. /sarcasm/
BTW, I think Kevin means 0.07 percentage points and 0.24 percentage points. Which doesn't necessarily change the basic analysis, although it reflects what tiny numbers we are discussing.
The opposition to larger unemployment benefits from a political perspective is not based on analysis like this.
Its based on conservatives dead set against "hand outs" especially to hypothetical brown people, and really, really especially to black people.
I say hypothetical because this same cohort doesn't even know the relative cost of unemployment benefits vis a vis their own taxes, and also does not know the percent of poor whites who get it.
Frankly, some of them are so against hand outs for lazyness it wouldn't even matter who got the benefits.
Even if you could show, which is not that difficult, that its a benefit to many business owners that more people can be customers, they would still be against it.
Of course, you never hear of a military contractor being against spending, but you hear plenty of small business owners in red states being against UI benefits. Economically, both forms of spending are close to equivalent.
It has always never mattered who got the benefits, the racism is just the social conservative way of getting away with causing harm to someone.
It's purely anecdotal, so I consider it with a healthy grain of salt, but I don't know anyone who has said or admitted they were going to stay on unemployment rather than look for work. I'm sure there are people like that out there, and I don't know tons of people, but if it was really such a widespread phenomenon -- and labor shortages are very visible in my community at the moment -- that I would have heard about someone doing it.
Even in Twitter threads (which, I mean is Twitter) that I've seen, when asked to show proof that these people exist, conservatives mostly quote threads of other conservatives talking about how they *wish* they could get that sweet, sweet unemployment.
Now, maybe I just don't know enough people, or maybe people are being really quiet about it. I'm sure there are some people out there who could work but aren't. But if it's causing a nationwide labor shortage -- one that's seen in my area -- I think I would have heard of at least one person taking time off before seeking work. I dunno. Until I see hard data, I'm skeptical.
Still having a lot of trouble getting an Uber/Lyft these days (at least takes longer and pricier), so curious how they factor in the independent contractor market, and paradoxically (or not), the drivers who have continued to drive say they've done remarkably well, and still so, because there's so few of them they always have a ride (riders are the ones backed up), and prices have been up throughout the pandemic.
Massachusetts, since it contains Harvard University, is at the center of the world, as every Harvard graduate knows. /sarcasm/
I disagree. Household employment surged in July, due to people and businesses leaving pua/puac. Can't wait until September/October.
Didn't help... didn't hurt. Didn't make a darn bit of difference at all? Does that mean we didn't need it?
Fuck off troll.
Yikes! You’re not very nice.
If I give someone $100 that they don’t actually need, that’s just a gift. I’m a nice guy, so I give lots of gifts and don’t much care what it gets used for.
But maybe this is your real problem:
A savior complex, or white knight syndrome, describes this need to “save” people by fixing their problems.
If you have a savior complex, you might:
only feel good about yourself when helping someone
believe helping others is your purpose
expend so much energy trying to fix others that you end up burning out
Yeah. That’s what it is.
"It's purely anecdotal, so I consider it with a healthy grain of salt, but I don't know anyone who has said or admitted they were going to stay on unemployment rather than look for work."
Uh, me and a bunch of friends in our early twenties? Of course, we were pretty caught up in partying, drinking, and drugs at the time, and were on the Canadian system, where you just had to check six boxes on a form and mail it in every two weeks.
Yeah I know plenty too including my sister who is over 60.
She could have got her old job back quite a while ago but that would have cost her money. So why do it? And I do not blame those who stayed unemployed when they were being paid more than they earned while working..
That part never made sense. And just unfair. What about the grocery store worker or other essential workers who went to work every day, with a risk to their health and onerous conditions like having to wear a mask all day. For often no more pay then before or a little extra, paying taxes, so their taxes can be used to pay unemployed sitting at home watching TV more than they made working? How about not being as generous with the unemployed ( still could give a covid extension and do a higher than normal under 100% replacement pay). And use the extra to subsidized a covid bonus to essential workers?
True story just two days ago. At the grocery store with a new cashier on first day. Doing ok. Asshole guy just ahead in line insists on a free bag, which is illegal in California. The cashier says no but he takes it anyway and the cashier just does not charge him. He still complains to manager who comes over. All other customers support the cashier .
The jerk says the manager should fire the cashier and " there are plenty of unemployed who want the job". Manager says " no.tbere are not . Hard to find anyone and lucky to have him . And so hard to find staff that we do not need your business so leave and never come back. Cheers from everyone around who then booed him out the door. Fun time.
And he insisted on wearing his mask below his nose.