Governor Kristi Noem and other Republicans made it sound like the unemployed were just lazy layabouts living entirely off extravagant unemployment benefits and if we just cut off that pandemic assistance, the idle proletariat would rush back to the yoke of their capitalist masters. We’ve seen that experiment fail.
That failure shows the stunted understanding Republicans have of the modern economy and the concerns of workers. New analysis from the Minneapolis Fed shows the complexities of life in working America that Republican sloganeers like Kristi Noem, who’s been living off government checks for over a decade, just don’t grasp.
First, the vast majority of households that lost work income during the pandemic never tapped unemployment insurance. Digging through U.S. Census Bureau Household Purse Survey data, the Minneapolis Fed finds that UI use peaked at 28% of income-losing households in June 2020 and has declined since.
Even among the minority of households that lost income and received UI, workers sustained themselves with multiple money streams, including spouses’ paychecks, borrowing, raiding savings, and selling assets:
Unemployment insurance helps people make ends meet in hard times, but cutting off UI doesn’t necessarily cut an unemployed household’s income to zero.
Even with benefits reduced, many workers, especially frontline workers in high-demand, low-wage fields like restaurants, hotels, and retail, may still calculate that during a pandemic, they can’t afford to risk big medical bills for an extra paycheck. The Fed’s analysis shows that the most common concerns among frontline workers are literal bread-and-butter issues: paying the bills, keeping a roof over their heads, and keeping food on their tables. Of concern to even more workers than housing bills are health care costs:
Two thirds of frontline workers are worried about paying for health insurance and heath care bills. Why would they rush back to expose themselves to a pandemic in workplaces where they face literal violence from reckless virus spreaders and where their employers have traditionally been less likely to offer health benefits?
Workers who aren’t rushing back to those frontline positions may not just be waiting for coronavirus to pass. Many are seeking a permanent switch to safer and better-paying careers. But switching careers takes time, training, and often tuition dollars. So they’ll be scrimping, saving, and studying rather than rushing back to serve your shrimp.
To understand why reducing unemployment insurance isn’t driving underemployed masses back to the workplace, we need to understand all of the factors that shape workers’ choices. Such economic thinking is complicated and thus above most Republicans’ pay grade.