Many Americans are getting more money from unemployment than from their job
fivethirtyeight.com
fivethirtyeight.com
Strap in everyone, 2021 might be worse than 2020.
The New York Times did a very large, good chart about this a few months ago. Only people in about half of the American states might possibly end up getting more while unemployed than they did at work. The way some states' unemployment systems are set up, it's simply not possible.
Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.
The whole "Americans are making more money from not working" is not only a three-month-old meme, it's only true in a small percentage of cases. The only thing it is good for is getting people like my mother riled up with, "People aren't working because they're getting too much unemployment!" Completely ignoring the fact that there simply are no jobs to be had, and businesses are still shutting down left and right.
But, each to her own bubble.
> A new analysis by Peter Ganong, Pascal Noel and Joseph Vavra, economists at the University of Chicago, uses government data from 2019 to estimate that 68 percent of unemployed workers who can receive benefits are eligible for payments that are greater than their lost earnings
Do you read eligible as "getting"?
Health care.
The folks arguing this in Congress seem never to have faced the practical issues that come with loss of employment.
Plus, I'll gander that among the 32% who qualified for the benefits noted, but whose income was still not replaced during the relevant time period-- the shortfall probably was 50% on average or more. So we cut that benefit because many low-wage-earners are receiving too much? Really? Sometimes it's hard to believe political discussion in the U.S. has devolved to this.
This is backwards. The lower the income the greater the relative benefit from the fixed $600 assistance since as a rule of thumb unemployment pays a little over half of the replacement wage.
The simple solution would be for the government to also pay employed low-wage workers. Then, everyone can continue to buy food and pay rent and no one is earning less while working.
It wasn't about actual wages, which state unemployment systems already handle just fine. It was that many systems are too difficult to rapidly change to incorporate complex formula adjustments, but a flat +$N is more easily doable.
You are correct however in clarifying my statement above.
[1]. https://www.marketplace.org/2020/06/05/when-does-the-expande...
Sure, and handling them is a potential system problem, but not one addressed by the flat $600 vs. a more complex add-on choice.
The people who should have something to say here are the ones making less who didn't lose their "essential" jobs.
That points at an even simpler solution: toss some free shit to everyone. Yes, it's ultimately paid for by everyone's taxes, etc, etc, but there's no way around this pandemic having a very high economic cost. It's just a question of tackling it actively and having that cost go towards productive programs, or paying to deal with the disaster that's resulting from our government being incompetent.
Should anyone ever make more money while unemployed than when employed?
Won't that completely alter the valuation of work and with that the proper functioning of the economy?
PS I know people that own businesses that can't reopen because people that usually would work for them don't want to come back as the salary he pays is less than the unemployment benefit.
I mean, what's the point of building AI and robots and advanced energy sources and bio engineering if they don't fundamentally improve the quality of life for everyone? I certainly don't think there's some moral requirement to force everyone to work.
1. they'll invent problems
I.e. "first world problems". We (in America, anyway) live in an incredible utopia by any historical standard. But I read on the news every day about an endless series of phony crises. (The coronavirus thing is a real crisis, but even so, by historical epidemics it is not that bad. The bubonic plague, for example, killed something like 35%.)
2. they'll be miserable and self-destructive
This is a well known problem with the offspring of very wealthy people who never had to try at anything.
3. they die
People often die shortly after their retirement. They don't survive the loss of purpose.
People don't need a Sword of Damocles hanging over their head threatening them with homelessness, loss of medical treatment and hunger solely because they didn't find purpose in life.
How is being miserable and self destructive and losing purpose, as a worst case scenario, worse than homelessness, drug addiction, loss of friendship, family, self respect, health and medical treatment?
I mean, I don't see the connection. Are you saying that unless people are literally threatened with homelessness, starvation and death they won't find purpose on their own?
The top video game streamers in the world today make millions of dollars a year:
https://www.esportsbets.com/news/highest-paid-twitch-streame...
I'm guessing you wouldn't look down on your son for playing football hard in High School and trying to go pro. Would you berate your child for dreaming of playing for the NFL if they had some talent for the game? Well, nowadays, your son could go pro in video games. Tyler Bevins, for example, from the article, was entertaining over 14 million fans and was making over $500K per month.
If it's between my kids dreaming of going pro in eSports vs being a quiet Walmart greeter for 30 years - you can bet I'd encourage them to get good at those games. Play that Nintendo, son.
I'd council him that football is a career with a very small chance of success, with a high probability of brain injury and/or other debilitating injuries, and a profession you're forced out of young.
> Play that Nintendo, son.
If he's 30, still living in your basement and hasn't made a dime yet, that ship sailed long ago.
> a quiet Walmart greeter for 30 years
Somehow I escaped being a Walmart greeter :-)
Hey, you can advise or support your son however you wish. But don't ask others to pay for his Nintendo dreams.
i guess the point is, at least as i understand it, we should be able to find the mission in life without that "sword of damocles" as the other poster said
maybe we can have jobs, or communites, or organizations that we serve in and contribute to them without necessarily needing to be compensated by them, but because we believe in them we contribute (our time, mind, effort etc)
also, the "need for purpose" might be a very mondern concept, i wonder how traditional societies (sorry for the loaded word) go a about life in that respect...
You'll find it in religious work ethics, too, as well as "idle hands", etc.
It blows my mind that people that are so prone to speaking about freedom wrt Capitalism always seem to be very uncomfortable with freedom in its literal sense.
This also reminds me of the opening lines of Bertrand Russell's essay "In Praise of Idleness":
"Like most of my generation, I was brought up on the saying “Satan finds some mischief still for idle hands to do.” Being a highly virtuous child, I believed all that I was told and acquired a conscience which has kept me working hard down to the present moment."
I expected a negative reaction for my post.
> you imply that people find purpose in their jobs
That's true for an awful lot of people. Even if their purpose is simply to take care of their families.
> you seem to ignore that this purpose can come from other aspects in life than wage labour
Labor is often a means to some other purpose.
> freedom in its literal sense
Freedom has many, many meanings, which should not be conflated with each other. "Free markets", for example, doesn't mean everything should be free of cost.
And for an awful lot of people it's not. It will also be significant portion that finds purpose due to no other options as they try to make the best of their situation. I would not call getting paid to providing for ones family a purpose, since it would end if the person would be able to provide in some other way. If that was true, people would find purpose in standing in rationing lines.
> Labor is often a means to some other purpose.
That purpose-giving labour doesn't need to be economically coerced wage labour for someone wealthier. Especially if the scarcity is artificial it's most likely seen as an injustice and an insult.
> Freedom has many, many meanings, which should not be conflated with each other. "Free markets", for example, doesn't mean everything should be free of cost.
Yes, the term is used as propaganda. Which is at its most clear as soon as less work is discussed.
I'll tell you, $600 is the new zero that gets you nothing.
I think it's not an unrealistic way of looking at it to say that our floor is $280, and in reality, we could see up to $600 or more in net welfare added.
What you're actually doing is bringing the poor and the wealthy closer together, reducing inequality. In places with a $15 minimum wage, standard of living actually goes up for the poorest citizens.
How much do you think would entice someone to be a cashier and work 8 hours a day when someone on unemployment in the current system gets say $3600/month. Imagine a poorer state where you can easily make do with $3.6K per month.
My question is pretty much what would you have to pay someone to show up for a somewhat unpleasant workplace when they don't need an income for a decent life already? (and they would lose their previous income if they did work)
I think the math is not so simple there.
Market rates.
Without answering your question directly, that's my answer. Somewhat unpleasant workplaces should be automated, and people should be paid a living wage. If you want them to go to work pay them market rates, or make it pleasant. That's a society I want to live in. The market rate should be determined as whatever they need to pay you above a basic existence to motivate you to do a specific job -- not above death.
I'm not sure why you're advocating a society that, out of some moral imperative around the value of work, creates unpleasant workplaces at wages you can barely live on, and considers that a job well done. Mandatory and uncomfortable is a minimum standard most developed nations left behind a long time ago.
Yes this may cost me more, but you know what, if that means I don't have to stumble over heroin needles and homeless encampments on my way to work, that's a fair trade.
If $600 gets you nothing, then what does 2 * $600 get you?
I cannot find the specific reference for it, but I believe I heard people saying some of these systems were having a hard time paying out over $1,000 a month because they were so old and outdated.
This is the case of "don't let the enemy of the perfect be the enemy of the good" that is repeated a lot in policy making. Sure, we could create a more perfect solution, but what are the costs associated with crafting that perfect solution under the specified given time frame?
https://www.cnbc.com/2020/06/19/outdated-technology-may-slow...
https://www.marketplace.org/2020/06/05/when-does-the-expande...
No, but of course the fault lies somewhere between unemployment being too high and wages being too low.
Yes. During a pandemic or other disaster where they are intentionally paid to stay at home like the one we're currently in.
that the economic policy for raising salaries is to introduce an artificially highly set unemployment benefit
I say "has been" because, again, the CARES Act supplementary benefit expired today, with no clear replacement plan in sight, and no equivalent replacement plan anywhere on the horizon.
You'll understand, of course, that I'm going to need something more than your unsupported assertion to be convinced that this is the case.
artificially raising salaries in an imploding economy with high unemployment is beneficial
uh, no, it is a recipe for economic disaster.
Ideally, you'd see living-wage unemployment in a situation like this one matched by the kind of substantial, ongoing supplemental loans to small business owners that'd enable them to pay a living wage directly, and thus successfully compete in the labor market. But our shitshow excuse for a government - and that's not partisan; I'm indicting all sides equally here - has been no more successful at that than it has at supporting workers. And now it looks very much as if we're going to have an economic disaster no matter what anyone does.
Well. Judging by yesterday's GDP figures, I suppose I should say more of an economic disaster.
the number of people for whom this is exactly the right amount is tiny,
all it generates massive imbalances between those for whom this is too much and those for whom this is too little (or causes all kinds of unintended consequences)
I read the a story with the two cashiers, one got laid off, the other not. The one that did not get laid off had to show up to work during the early pandemic when everyone was freaked out, worked eight hours a day then, at the end of day took home less than the second one that got laid off and stayed home all the while.
Please excuse my language. At the moment I can find no word in my lexicon which is both less vulgar and still able to capture my depth of feeling.
It's 100% wrong as of today (the article is from May), as the $600 supplement has expired and won't be renewed. In fact I'm not sure why HN is discussing an expired, won't-be-renewed program as if it is current.
> Treasury Secretary Steve Mnuchin said in March on Fox News that the $600 bonus was chosen because states' computer systems are more than 30 years old. Reprogramming the computers to achieve what he described as a more nuanced distribution of money would have taken too long.
> “In certain states, that might be a little bit too much money. In other states, it’s less money. It’s not a perfect system, but the president’s objective was to make sure we get money in people's hands,” Mnuchin said.
Source: https://www.usatoday.com/story/news/factcheck/2020/04/13/fac...
I think people often look at this with the "glass half empty" viewpoint though. "PERSON A MAKES MORE THAN I DO! THEY SHOULD GET LESS!" Why not think "PERSON A MAKES MORE THAN I DO! I SHOULD MAKE MORE!"
My sister was able to re-open and she had the hardest time convincing her workers to return simply because of this fact.
Some never returned. Why would they?
Has nothing to do with safety or trying to keep people at home.
[1] https://www.washingtonpost.com/business/2020/05/08/workers-u...
Admittedly, I could be wrong on several points and do look forward to correction. Please do point out my mistakes.
One of many necessary things, but not the only thing or sufficient by itself. Eviction protections, etc., are also part of the mix.
Isn't the question whether the economy should reopen?
2. This also provides a certain amount of "rough justice" for replacement of unreported wage income. While ordinarily that would not be an appropriate use of the UI system, these are not ordinary times.
3. Excess UI benefits will not last forever, while the effects to lower wage workers in food/hospitality and other industries will leave financial scarring for years. Giving people a little more upfront, then slowly phasing it out, gives laid off workers a reasonable opportunity to plan on a career change, if needed, or to reduce household expenses going forward. (E.g. finding a cheaper apartment).
1) 200 sqft laminate flooring in a square room. Quoted $1500 for installation. One day job.
2) 2 day job to install a minisplit system I bought separately. $6000+
My sister was quoted over 1k for replacing a valve by a plumber, for less than an hours work.
These were not even labour intensive or high skill dependent things. Just basic trade person type of things.
Your $10/hour job can buy you plastic things made in China at the dollar store.
So I think these are the real wages in this economy.
COBOL anyone?
The real problem is that companies/goverments didn't anticipate the retirement of COBOL resources. Nobody wants to train anyone or give them a career. They all want to hire senior people.
I see a similar trend emerging in other technologies. I see tons of senior positions but very few positions where the company will provide training. Even internal transfers at my company provide zero training.
Yes, they did. What they didn't anticipate was that major system change would not be driven by policy changes that they were free to time (and, if necessary, take the time to make it a replacement of major system components or whole systems with newer technology), but that there would be an emergency causing simultaneous needs across the nation which would exhaust the limited (mostly contract) resources that everyone reliea on for major changes to major systems.
Policy changes are never able to be timed more than the duration of the election cycle. And frankly, neither party will pony up the money for a technical upgrade that the constituents could care less about.
“Didn’t anticipate retirement of COBOL resources” is what you said.
That's very different than “anticipated and have been dealing with retirement of COBOL talent with strategies that didn't accommodate an unprecedented black swan event creating a massive simultaneous nationwide demand surge.”
> Policy changes are never able to be timed more than the duration of the election cycle.
Yes, they are; it's very common for new laws that would have system impacts (either to the adopting government, or externally entities, or both) to come with implementation timelines that are long to provide time for system implementation, which certainly often cross election cycles. Sure, intervening elections sometimes change those plans, but almost exclusively to eliminate the requirement or extend the timeline, not accelerate it.
You can only plan based on what you know. You could plan based on implementation timelines in legislation. You can't plan on what may or may not come in the next 2-4 years. Waiting indefinitely for modernization plans is not realistic, although that is what happens in many states.
Sure, but I'm not the one who claimed that the problem was “failure to anticipate the retirement of COBOL resources.”
I agree that retirement of COBOL resources is basically irrelevant.
"A slippery slide transfer straight into socialism. The moment people can start voting themselves money, combined with democracy it's just a matter of time before the bottom 51 votes themselves into the top 49. By the way, the slippery slope fallacy is not a fallacy; they haven’t thought it through.”
"The moment you start having a direct transfer mechanism like that in democracy, you're basically doing away with capitalism which is the engine of economic growth. You're also forcing the entrepreneur out, or telling them not to come here."
"People who are down on their luck, they're not looking for handouts. It's not just about money, it's also about status and meaning. The moment I start giving money to you, I've lowered your status and made you a second class citizen.”
"You have to teach a man to fish, not to basically throw your rod in and eat the leftover scraps."
I'm not exactly sure what you mean, but Naval does talk about his very modest upbringing, basically coming from nothing. His single mom, being a minority in a tough neighborhood in New York. However, his thirst for knowledge, status, and hard work has built a great amount of peer respect, economic output, and success.