Business owners and hiring managers have known this in their gut for months.
By Wolf Richter for WOLF STREET.
In the 27 states that have ended the extra $300 a week in federal unemployment benefits, paid on top of the regular state unemployment insurance, people are returning to work at a much faster rate than in states where the extra $300 a week are still being paid: this was further confirmed today by the unemployment insurance (UI) data from the Labor Department.
At the end of June, Texas and Florida joined the group of states that ended the extra $300 a week (the Enders). These states are still paying the regular state unemployment benefits; only the federal top-off $300 a week was ended. Since the end of June, the combined “continued claims” (the number of people having claimed unemployment insurance for more than a week) of the 27 Enders dropped by 25%.
Over the same period, the continued claims by the states that kept the extra $300 a week (the Keepers) dropped by only 11%. In other words, continued UI over just those weeks since the end of June dropped over twice as fast in states that had ended the extra benefits:
For the US overall, “continued claims” dropped to 2.82 million (not seasonally adjusted) in the current week, according to the Department of Labor this morning. It was the lowest since the employment crisis began in March 2020. But it dropped a lot faster among the Enders than among the Keepers.
At the state-by-state level, these “continued claims” serve as a stand-in to determine if ending the extra $300 a week in federal benefits is encouraging people to go back to work.
The “continued claims” data doesn’t cover other forms of unemployment insurance, such as the federal programs for the self-employed (Pandemic Unemployment Assistance) and the federal catch-all program (Pandemic Emergency). But it shows the trends for people who used to be employed, then lost their jobs, qualified under state programs for UI, and have not returned to work by the end of the reporting week.
The four-week moving average irons out some of the week-to-week ups-and-downs that tend to occur in every state, which, when it happens in one of the big states, can skew the national weekly data. Being a four-week moving average, it lags the weekly data, but it shows the trends:
Hiring managers and business owners who need to fill open positions have known this in their gut for months: Paying people as much or more to not work than they made while working encourages them to not work, even though the pay is now higher than it was before.
These hiring managers and business owners have had to struggle for months with this phenomenon of a “labor shortage” that made it very tough to fill open positions even while they were reading the government’s unemployment reports that showed that 11.7 million people still claim some form of UI, as of today’s UI report from the Labor Department.
What will happen when the extra $300-a-week in federal unemployment benefits expire in all states on September 6? We’re getting a pretty good idea: More people will rejoin the labor force and apply for jobs and take jobs and fill open positions, and we should see some strong jobs reports, just in time for the Fed to announced its decision to taper its asset purchases.
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As always, Wolf condenses the data beautifully.
I agree great charts. Proof of what all logical people thought. Will be interesting how dramatic this becomes going forward the next 2 months keepers vs enders.
Follow the circular idiocy…..
The Fed allegedly keeps rates at zero to promote employment.
The Federal Govt takes that no cost money and doles it out to people to such an extent they remain out of the workforce.
The Fed points to the poor employment numbers and finds a reason to keep interest rates at zero.
The Federal Govt takes that no cost money and doles it out to people to such an extent they remain out of the workforce.
The Fed points to the poor employment numbers and finds a reason to keep interest rates at zero.
round and round…seemingly on the purpose of doling out money and keeping interest rates at zero to pump real estate and stocks.
..could this be just another test case on a massive scale that will be referenced to be used in the event of the next national emergency. each adjustment made will be studied and cataloged with action and response. Looking at each of these daily, weekly and quarterly fine tuning is noise.
My fear is that they won’t head the way Wolf and the MSM believe. They might zig rather than zag with this much control. Who know what the fallout will be in five years. However there will be plenty of data to look back upon
All the while, those who have retired or can’t work are getting squeezed harder and harder as the FED purposely creates under reported inflation and the artificially low interest rates harm the pension funds and retirees alike.
Is this some bizarre ugly sinister plan to destroy the elderly and disabled?
Good one em:
As one who is now in both of the categories you mention,,, and formerly supporting with my taxes, as best I could, the ”establishment” but now being something in the butt end of being part of those losing my ”benefits” clearly ”earned” after paying into such benefits for the last 60 years,,,
You certainly seem to have ”hit the nail on the head” re plan to destroy elders and dis abled, FKA ”handi capped”…
IMHO,,, ”karmically”,,, it won’t end well for any of the political puppets or anyone else doing clear damage to us old and disabled, in spite of any and all propaganda suggesting otherwise…
One has to consider the possibility of USA AND China doing their best to get rid of us ASAP so that we do not ”cost” any additional costs of being on the long end,,, EH
Governments are all the time moving the goal posts as they make the laws and can change the rules. Pay taxes now and put money in a Roth and it will be tax free forever. Doesn’t mean they are not going to inflation tax it away at 4 – 5% a year.
Allow us to withhold social security taxes from your paycheck and use your money for 30 years and you can withdraw it tax free when you get 65. Oops, we have to change that, we gave your money to other people.
These folks now Have to go back to work in the face of new threats like the delta variant. They were staying out because they can read.
It occurs to me that the 7 million missing jobs are 18% of the 37M covid cases now, which is pretty much in line with the Long Covid result numbers I’ve seen recently. How many of the ‘slackers’ have ongoing symptoms isn’t to be found easily so far.
So like usual I expect it’s a combination of factors, not some easy black and white reason.
7.5 Mil will be loosing all unemployment benefits early September. How many will find a job ? in the meantime, they will have zero income to spend. Fed taper, I don’t think so. Every stats I see points to a downturn in the economy. Banks do not want to lend, businesses do not want to borrow.
Not all benefits, the article only covers the extra $300
The programs will be extended past September 6th in California and probably New York. This hasn’t been announced yet, but since the Labor Dept said states have the option to extend, I think these two will.
I wonder how this data compares to continuing claims from last year when the extra $300/week wasn’t even there. I think it was from September through December when they only had regular extended benefits, but no additional $300 or $600 boost.
Also, most of the “labor shortages” are in the hospitality industry. Many people don’t want to risk getting Delta Covid for minimum wage, especially if they have to pay for childcare while they work. So the $300 is definitely not the only factor.
I am worried about how the ending of benefits will impact consumer spending too.
What happen to our left over employment money?
Not even mentioning dropping mobility stats in Covid-hit regions… social media images of people lying on a library floor waiting for Regeneron tend to dampen enthusiasm for being out and about, and we haven’t even seen the bad Delta spike in the more socially responsible states yet (don’t kid yourself, it’s coming.)
What possible reason is there for that comment needing moderation?
It got tangled up in a tripwire, of which there are many.
And yet listen to the political clowns say the opposite. I can understand the initial program, but all of the extensions were a grotesque overreaction. And to listen to the political clowns try to deny that it doesn’t promote laziness and freeloading is disgusting.
“Try to *say that it doesn’t promote laziness.”
Wish there was an edit button, if even for a minute.
It’s kind of like saying workers benefit from a business tax cut, as though business owners like to give their money away.
someone’s never gotten a bonus
You have no idea.
“I had a friend in the military who trains military dogs,” Taffer said in conversation with Laura Ingraham. “They only feed a military dog at night, because a hungry dog is an obedient dog. Well, if we are not causing people to be hungry to work, then we’re providing them with all the meals they need sitting at home.”
life is short, why be a slave
You know, I get having disagreements over economic morality, but referring to people as dogs, who aren’t hungry enough says a lot about the referrers, not the referred to.
I have seen numbers over the past year saying that over a quarter of Americans not having enough to eat, such that they go bed hungry at least monthly. Since children are more likely to be in a poor family or where the breadwinner(s) are, or have been, under or unemployed that means children are more likely to be hungry.
So, we are arguing about the morality of and,or need for measly three hundred dollar checks, while trillions have gone to the the wealthy elites and “they” are trying to herd lower classes into poorly paying jobs that expose them to COVID or don’t give them adequate healthcare. All while wages or salaries for most have not kept up with inflation, meaning they are all getting de facto pay cuts for over a decade and until just the last couple of months.
While I am questioning the basic fairness of the system, I would suggest that if the pay at least matched the increased costs of living over the past forty years, especially the vast increase in housing costs, and had decent, affordable or free, healthcare that would not bankrupt them, that they might actually want to work. Even a cheap jr. one bedroom apartment in California, anywhere near an hour’s commute, is about $2000, and gas is often over $4.00 per a gallon. (Everyone has seen the massive increase in both housing costs and the homeless, yes?)
As usual the rich get richer and the poor get screwed. Until those conditions are dealt with, with respect, those who question the checks really do not have any good reason to do so.
Because it’s better than starving?
So let other people contribute so you don’t have to be a slave?
jbird, Society is working under the principles of Orwellian Philosophy.. If you tell a lie over and over with the authority of a believer, people will believe that lie and promote it. Example is Trickle Down Economic Theory! Or the Wealthy are the Job Creators!
We barely have a Free Press as it is owned by the Advertisers and they are owned by the wealthy few.
What you say is true but it will not be generally accepted because it doesn’t promote the concept of unfettered Capitalism/consolidation/monopoly.
I just don’t think the feudalist/owners of our society have any idea of what happens in the end. In their arrogance, they think they will be the end winners? Of what?
I see no CorpserateCaresAct receivers starving … just sayin.
Their benefits NEVER seem to stop, no matter the levels of psychopathy !
No dog equivalent of seeing homeless people all over……would deliver even more “obedience”.
JBird-
“Referring to people as dogs”
I remember when I first heard the term “backfill” from management, which just meant moving some people from one job to another as conditions changed. “Move” would do.
Backfill is like when you push dirt back into the hole you dug and poured cement in, like a house foundation. It’s totally standard management speak now.
I also remember when Personnel became “Human Resources”.
I don’t like these terms, and they say a LOT about what is coming out of our “Management Schools”, or those drawn to management.
Backfill is universal. No connotation. For me it means replacing a primary ad, if it doesn’t fill, with an ad from an ad exchange that pays a lot less, but still pays something.
Your business experience (which is why I’m here) comes from being in management. My experience comes from clock punching. I know I worked for FAR more outfits than you did.
Maybe I noticed things you didn’t? Backfill arrived circa 1981.
But it’s just personal anecdotes, anyway;-)
If you read that and see it as wisdom I’m sorry for you. It sounds like a fascist.
Sophistry comes to mind
Not any more fascista than your usual on here so far, g:::
such as trying to get some old guy to adhere to YOUR requirements for comments, thinking, etc.,
Try to ”get over yourself” is my only suggestion, in line with the overall,,,
“de gustibus non est disputandum” or something like that in the original latin, probably too ”bastardized” for you,,, but/or at least “”OLDE””
And BTW, when the great acceptance of ”epidemiology” began in the 1970s, there were many and many scientists who said that ”science” was nothing more than ”anecdotal” information being accepted in the aggregate, as somehow ”statistically” true, or something like that,,, as opposed to the very clear mandates of the scientific method previously required…
I don’t get g:::, or your beef with him, or that post.
We should call them debt “dogs” instead of debt slaves.
Maybe already in use in financial management…has proper ring to it.
«Bread and circus», was what they gave the people in ancient Rome. The bread part is important, without people revolt. People do follow leaders as dogs, but unlike dogs they revolt against their leaders now and then. There may not be a revolution in the USA, but hungry people armed to the teeth is no good either.
Despots that stay in power understand that it is possible to get away with a lot, but that is not possible to get away with most of the people go hungry for most of the time. Have a look at history, it’s when hunger strikes there is severe social unrest.
“Every dictator rides a tiger that he dare not dismount’
-Churchill
“The best argument against democracy is a five minute conversation with the average voter”
-also Churchill
It’s messy and a lot of work to find that middle ground, but this present excessive Class Warfare sure doesn’t help at all.
Amen –JBird4049. Harold, get help. You just implied millions of poor Americans are or should be treated like dogs.
See AB’s post. Might “help” you…..or more likely will confuse you more.
The question was always to what extent people would stop working. The big story now is that we got the answer, and the answer is mind-blowing. The vast majority of people are very happy to be economic slaves.
The economic and financial system has been one that has provided UBI for the rich for a long time now. In a fair system, the most successful people like Jeff Bezos and Elon Musk would be worth hundreds of millions as a reward for their leadership in creating thriving businesses. The mistake that everyone is making is assuming that the three extra zeroes are just a meaningless abstraction. But these zeroes make the difference between democracy and autocracy.
The unemployment bonus was like a test by the elite to see how close the population is to rebelling against the present system. The rich can now safely become trillionaires and quadrillionaires and the population will not care.
I thought we’d be forced to end the program early, very early. Never did I think that the average person would rather get paid less money for working than for doing nothing, after watching the biggest scammers in the world get rewarded the most throughout their lives and watching their share of the wealth pie only shrink and shrink over time. They should have gone on strike all along (like in Atlas Shrugged), even if it meant getting paid nothing.
People can’t go on strike to make a political point at the scale you imply.
I never had any doubt that this many would rather get paid for doing nothing. Many of these jobs “suck” and they didn’t have a choice. Many others are just lazy.
Agree with everything you said.
Not only will people not strike, but people will never band together and overthrow anyone or anything.
The political and economic elite in this country have done a fabulous job of dividing society and getting us to fight amongst ourselves.
Stop calling them elite. They are just rich parasites.
Yeah, “rich parasites” will do.
“All wealth comes from labor, and it should therefore deserve the greater consideration.” -Abe Lincoln
And that “dividing of society” job has been done more “fabulously” than I have ever seen it in my life…..and over increasingly stupid and nebulous “issues”….I sure can’t figure out what all the “issues” are, some are just guesses….yet I know which side I’m one…sorta….sometimes.
Vote buying for the 2022 elelction…..
throwing money…
cheap Fed printed money…..
Those political clowns are pretty well paid. They might think it’s normal. I also know of some entitled families who proclaim otherwise for their right wing votes. Sooner or later the bill comes due for all of us and all Govt everywhere needs to pull in their horns and cover what is really needed like education, healthcare, and decent infrastructure. Bloated military and farm subsidies could go before the stimmies….. for a change.
Ahh, the old ‘freeloading’ thing. People being lazy. What if they don’t want to work for poverty pay? If they stay away long enough, maybe the owners will raise incomes. We used to have unions that could protect workers from abuse. No longer. Billionaire Nick Hanauer says businessmen suffer from an ‘auto erotic fantasy’ (i.e., masterbation) where they can keep pay low and still demand will be there for their products. Because all the other businessmen do give workers raises.
Some of the people complaining about not having enough slaves, are the same people who buy homes and immediately re-list them for a higher price while adding no value whatsoever. They are leeches who use their old age and savings to exploit younger generations into homelessness. Maybe they should get real jobs? Or mop their own floors? Cook their own food? It’s a foreign concept for them. Too bad people are now rejecting this twisted system. The future will be interesting for sure.
That gets a big OK BOOMER!
From a boomer, who is ashamed of my cohort. Hope you are right about rejection of twisted system,
Go and search for “Tracking COVID-19 in California”
It looks like the cases (mostly Delta variants) have peaked last Friday (8/13) and are dropping. At the same time, the deaths remains low even during the third waves. Some of this is due to the vaccines “working” but also, science said that as virus mutates to become more infectious, they tend to be less deadly. A dead host is not good for spreading.
So this post is not about science or politics. I assume this will peak out and go away in September so the FED or federal governments have not justifications to extend any more UE benefits or local eviction moratorium. I guess until the Omega variant hits later in the fall.
Hope you’re right, but that trend is not true in other states. And prior waves have waxed and waned a bit, it’s not a simple goes-up-then-down curve. At the state level, you can get temporary lulls when one city peaks while another is just getting started. Finally, with kids now going back to school – which I think is necessary but might not go smoothly – there will likely be some additional spread.
IMHO California numbers are also suspect due to political incentives around the recall election. Some of the county websites I look at are saying now “data may not be up to date since …” with some excuse.
The government doesn’t want people to work. They will have their wish soon once the breadlines start because the market tanks, companies slash payroll, and the real inflationary tsunami hits.
They are already getting the wheels turning for the “more localized sharing economy”
A reliant on government citizen is a vote for Democrats.
Lots of farmers vote the other side. And look how much gubermint money they get.
There aren’t many farmers left in this country. And those that are are not voting for the Republicans for subsidies, but for cultural issues.
I would never vote for any Democrat because they’re the party of speech suppression and gun grabbing. I don’t care about subsidies or taxes.
Especially that entire corn to ethanol crowd…farmers and producers…..that insanity just has to stop!
1:1 or MAYBE 2:1 ROE?
That’s irrelevant.
The problem is that there’s a giant stew of garbage brewing. The green movement needs debt to create appeal for things like carbon capture. There’s a massive movement to destroy consumerist capitalism tied into that.
Everybody sits and whines about it on smartphones replaced every 3-4 years that are awful for the environment manufactured with no environmental oversight and no real manufacturing takes place without government support outside of India and China.
Meanwhile we talk about the wealth gap and demographical analysis of racial disparity. Oh and tax cuts. One side wants to pay no taxes.
I wrote an email to all of my veteran friends and active duty friends apologizing but told them I wasn’t voting anymore. It’s just too far gone.
My hope is somewhere gets it right, but right now we are preoccupied by whatever crises this is in a row over the past 22 years now. Screw it all. There is no succeeding. Just stupid little things you can do to survive either comfortably or crappily. Zero fulfillment.
My best friend realized 5 years ago, quit his job, financed a CNC machine and has been making 7 figures a year bending tabs cutting out little metal parts mostly for the government. He has 1 employee. He financed the machine over 20 years with basically nothing out of pocket at a sub 5% interest rate, which didn’t matter. He paid it off in 8 months.
I have 30 years experience in precision machining , design etc.
Boy I’d like to to know more about how to get into a similar situation. ……
I put in 55 +/- hours a week and let’s just say that compensation hasn’t kept up with inflation since China started making almost everything two decades ago.
Maybe C-rations are coming back and he makes the new model can opener for them? I have several old ones, but can’t remember their name at the moment.
Anyway, your “best friend” has some really GOOD contacts.
Why don’t you help Jason out?
NBay-think you’re referring to the P38 can opener (not to be confused with the ‘twin-boom’/engined Lockheed P-38 fighter of WWII, or German Walther of the same moniker…). Those little guys plus some shaved C4 were essential for a warm meal, sometimes…
may we all find a better day.
Especially when folks have to pay the mortgage, rent and student loans again…
“What will happen when the extra $300-a-week in federal unemployment benefits expire in all states on September 6? We’re getting a pretty good idea: More people will rejoint the labor force and apply for jobs and take jobs and fill open positions, and we should see some strong jobs reports…”
I saw where people on full disability don’t have to pay back student lawns. Looks like a twofer.
I think there’s still motivation to work, but some people are treating this as an “extended vacation.” They get to paint, do yoga, do a little traveling — all knowing they’ll be settling down to work soon enough. I don’t think they ever planned to leave the work force full time, not even the stay-at-home moms.
Although I haven’t made much over the past 5 years, from my own personal experience the greatest influence on me to stop working has been the stock market. Money raining down from the stock market heavens for decades now, all with J-Pow platinum level insurance, you never lose! Certainly feels like a crime that this is our economy now.
As a guy who was raised by factory workers, and never had anything but a hard lesson, this sounds mythical to me… I live in bend Oregon now though, and I see wealthy all around(never saw wealth in Muskegon, mi). I’m trying to learn a thing or two about building wealth, but it all seems so unrealistic. How does one build wealth on puffy assets? I won’t even buy a house right now cause I don’t want to lose my down payment.
What you’re seeing is not “wealth,” it’s “debt.” I know Bend, Oregon, and it’s going to get wiped.
Lol I’m in Bend. It’s a zoo. And sadly most of this region is a tinderbox
No shortage of people living in vehicles around here. Lots of anti vax idiots in Deschutes county
The Fed has bifurcated the People
There are those who have enough stock to make a difference in their lives…”Honey, how much higher is the stock market today?”
There are those who dont. Working and trying to break even.
This separation in not healthy for society, and perhaps unfair.. The asset evaluations are “pumped” by policy from plugged in unelected Federal Reserve folk…
Reasonable investments and Housing is elevated and becomes out of reach for many….
Savers are punished by the promoted inflation.
Earners are punished by the promoted inflation.
The lender has become slave to the borrower…..all by INTENTIONAL design via the “plugged in unelected Federal Reserve folk…”…
The American formula, IMO, was work, save, secure lodging, then invest. Now, leverage yourself up as fast as you can, if it doesnt work out “throw the keys in the mail box”.
T
Now the wealthy billionaires flaunt it in your face on Twitter, etc., playing rocketboi, cryptoking and such.
I hope it’s as easy as end the $300 bucks a week for the unemployed and we get back to 2019 employment and the economy is roaring. However over a longer run I suspect it will be more complicated than that. Child care is still an issue. Also, if people were making more on unemployment, shouldn’t a return to work reduce income and limit the demand side of the equation? Door dash and Uber hardly count as “employment” but that’s where some of these people are going.
Hence why retail sales are down.
Retailers will get their workers back, but sales will go down. With sales down, will they need less workers? ¯\_(ツ)_/¯
Macys was up 20% on smashing the earnings forecast. Consumers must still be spending a lot of so many small retailers went out of business Macys is gaining market share?
When stimulus ends, I do not know how retail can still make big gains.
ru82-from Wolf’s prior examinations of Macy’s, reckon their increase has come mostly from online sales rather than their physical plants…
may we all find a better day.
Instead of ending or adjusting this or that feature of Federal Unemployment benefits, lets simply declare it unconstitutional and end the program immediately!
What power in the Constitution (not the fantasy opinions of the supreme court, the actual text) grant’s the fedgov to insure a person’s individual employment status? I can’t find any.
If people want unemployment insurance, someone in their state can sell it to them. Then if they want an extra $300 / week benefit and a year of extensions they can pay the premium for that.
Just get the fedgov out of this and all the other monopolies it has unconstitutionally granted to itself.
RT
Like the Air Force ?
Show me where in the Constitution an air force is permitted.
Explain to me why the USA needs an air force?
I question if the armed forces as we know them today are legal under the Constitution and do we really need them?
Also what good have they accomplished in the last 50 years?
Bringing it back to this article though, it would definitely be cheaper and more humane to the people of earth to just pay all the military $300 a week + whatever they get paid now to do nothing rather than what they have been doing.
National defense.
Now show me where Congress can delegate their Constitutional Powers of Taxation (promoted inflation) and minting (digital minting to the degree of raising M2 by 27% in less than a year) to an unelected group of Monetary Dictators (The Federal Reserve).
The Judeo-Christian work ethic that founded this country is dying. Free money, equity-based mathematics curriculum and pot dispensaries are just symptoms of a decaying workplace culture.
Puritan work ethic is what you meant ( or more precise Calvinist work ethic). The folks that canceled Christmas and so angered England that they got kicked out and forced to flee to America. Hard work and frugality is what they taught, as it is the only want to determine if a person is predestined to be saved or not.
Jesus, of course, famously fed loaves and fishes to the hungry people and healed the sick for free. He even brought a guy back from the dead and didn’t even charge him a co-pay.
Harrold, finish the story- the 2nd time the people came to Jesus he didn’t provide free food and also criticized them for not listening to him and acting on his words! He’s generous but actually not a free lunch guy.
See John 6 – bread of life sermon
who cares. It’s all made up fairy tales anyway.
You care, or you wouldn’t have commented on it.
That sermon only occurs in John, which is the last of the Gospels to be written.
The Bread of Life sermon was added, as you point out, to teach people not to expect free food. It is not however, something Jesus would have ever said.
Much like the passages where Jesus quoted to be in favor of paying your taxes, was added by secular people, perhaps early economists.
You’d better be right, Phoenix, for your sake.
Similar written offerings of all sorts are most likely originally based on actual historical events.
That they are all similarly expanded and so forth for political reasons, such as support for the paying oligarchy should be obvious to any objective observer.
For instance, the ”King James” version, eh?
Nor did He ask permission of Lazarus to bring him back Do-gooders, eh?!
Oh no, we are down to Skydaddy rants on WS to justify positions.
Lord help us. :-) (ooops)
Writing a script to install into my browser to automatically remove all of Paulo’s inaccurate and unhelpful comments on WS
I thought I read somewhere that Lazarus signed a dnr…
(polecat ducks under a burning Bush×2.,
Lazarus did not sign a “do not recesitate agreement”. Jesus had no choice in the matter. Not his fault.
Oops, polecat beat me to it.
Anyway, Paulo is exactly right. You never heard of “children of god’????
Jesus, of course, famously fed loaves….
Earth to Harrold….silly stories won’t save you.
Save him here (as in the argument) or eternally?
BIG difference, or so I am told.
@H
Spot on.
Reward is only legitimate if you suffer (work) for it.
A guilt trip which rulers use to make life physically easier for them. They don’t lift or carry or do any stressful chore. Once the workers have made enough capital for the rulers, they’ll dump the workers and replace them with machines they don’t have to reward at all.
JC threw the money-changers out of the Temple, now there was a prescient guy.
The original Lord’s prayer says ‘And forgive us our debts, as we also have forgiven our debtors.’ Jesus was promoting a debt forgiveness program, called a ‘Debt jubilee.’ They were pretty common in ancient society. Economist Michael Hudson admits ‘there may have been some fighting involved.’ Did not work out all that well for Jesus.
Yeah. Jubilee every 7×7 or 49 years or something, as I recall. It’s IN the Bible. Of course the rulers/priests all were exempt, I imagine, but it’s still a good attempt at maintaining a stable society.
$300/week? You really think most people don’t want to work because they’re getting an extra $300/week. Look, I’m 70 — no college — grew up in poverty. I’ve dug ditches, worked as a waiter, drove limo’s and have done just about every crap job imaginable. Work of that quality sucks the soul out of a person. It crushes hopes and dreams. At least when I was doing that work, I could rent a decent apartment, feed myself, pay .30 a gallon for gas. I’m surrounded by boomers who conveniently forget that everything was so dirt cheap when they were growing up. California offered FREE college. I work with the homeless. I go downtown LA. Yes, there are drug addicts, mentally unstable but there are also an astonishing number of people trying to live decently while in a tent. These are today’s cooks, household help, etc. Nothing is cheap for them.
$1,200 a month.
$15,600 a year.
Free cash.
On top of all the other plethora of bennies.
From many – plenty to live on and better than working a hard job they may not be too motivated to do.
And that’s on top of the regular state unemployment benefits, which continue.
If CEOs would have spent some of their money on paying a fair wage instead of enriching themselves via share buybacks things might be different. Karma
With respect, I must point out that a *cheap* one bedroom apartment in California, often an hour or more away from employment, is $2000 (or more) per a month. Honestly, I just do not buy the argument that these payments are morally wrong, or economically unjustified. Only if the economy booming and wages matching the increasing costs of living from the past four decades could I accept the argument.
It. Is. Impossible. To rent an apartment on anything near the minimum wage, even the minimum in California of $15. Just look at the increasing numbers of the homeless and their encampments.
The wealthy and investors are buying housing as an investment, Then there are the NIMBYs. So, housing costs have just soared above income.
If it was up to me, I would make it permanent. From what I can figure out, California’s unemployment pays half of what one made employed. With the increasing cost of almost *everything* including gas and especially healthcare, as well as the difficulties of many getting (or not ) unemployment checks, why the angst over this $300 per week? At best, one *might+ approach what they made before the latest increases in inflation.
So, anyone trying to get a decent job, especially one that won’t give you Long Covid, is probably looking for a job that pays enough to actually live and won’t kill him. Still, too many employers are too cheap to pay workers enough to live on and treat them as completely disposable.
To show just how whacked wages for the lower classes are, adjusted for inflation and according to the understating U.S. Bureau of Labor Statistics, the minimum wage in 1968 was equal to $12.52 today. According to the Center for Economic and Policy Research, if increases in productivity was added, which normal until 1970, the minimum wage would be $24.00. This would finally make that apartment affordable. Heck, a family with two working parents might actually get a two bedroom apartment.
I’ve waited since Dec 2020 for my UI benefits and haven’t received a nickel from the incompetent, and certainly uncaring, Tennessee government UI program. I finally did find a real job (one with actual benefits) and although I negotiated 20% more than the initial offer, it’s 30% less than my previous position.
2banana
Aug 19, 2021 at 2:01 pm
$1,200 a month.
$15,600 a year.
Free cash.
On top of all the other plethora of bennies.
From many – plenty to live on and better than working a hard job they may not be too motivated to do.
Can you collect government benefits of any kind with out an address (living in a tent)???
I am just asking. I don’t know?
IN California, the benefits add up quite a lot: 450 + 300 per week is just cash then you get ~$275/month in EBT/food card then free good insurance ( i saw the benefits ) then no rent/student loan payment then rental assistance ( my friend got ~$13K ) for back rent payment.
My fiend who was not impacted by Covid19 in any way, got ~$9K check from govt.
I am all for helping people but over helping and giving people who are not impacted is beyond my comprehension.
450/week is only if you make over a certain amount at your job, most don’t qualify for that much. Also you can’t get food stamps unless you have less than $2,000 in all of your checking and savings accounts combined.
It’s important to remember that the majority of low wage workers collect welfare, such as EBT, while they are employed too. This is because their wages are so low they cannot afford basic necessities, and thus still qualify for those benefits.
Also, many of those same workers had less than $200/week in baseline UI because their wages were not high enough to qualify for the $450/week.
Either way, it’s not like those people are swimming in cash right now. The benefits helped them participate in the economy during the pandemic. Now we get to see what happens to local businesses when the cash is taken away from those people. My bet is those same businesses complaining of “labor shortages” will suffer a loss in sales and will have to let go of workers they cannot afford to pay.
You need to add the state benefits too which in most states are another $300+ a week. Together, that is 600/7*30 which is about $2,600 per month for doing basically nothing.
Now add to that not needing to send your child to daycare, plus not having to pay your mortgage and student loans and you’re talking serious money. People aren’t going to pass that up in order to show up and take orders from the boss.
There’s a side effect that people rarely mention:
Workforce re-entry
Well we have on the one hand the distorted assets like housing have mathematically become unobtainable for wages in many areas, the other hand is career / middle class jobs will not be wide open like working at a gas station. The jobs that pay 70k a year are not plentiful. Working your way up a company and getting career experience is not easy.
During the GFC I took two years off and got paid $1,800 a month. It was definitely good for me because I studied and traveled. But it took a very long time to get a secure and relatively well-paying job thereafter
$300 / week = $42.85 / day
add to base benefits, easily exceeds $50 / day.
Not hard to find off season cruises for sale for $50 / person per day.
Would you rather return to work? Or go on a cruise?
??????
“Look, I’m 70 — no college — grew up in poverty. I’ve dug ditches, worked as a waiter, drove limo’s and have done just about every crap job imaginable. Work of that quality sucks the soul out of a person. It crushes hopes and dreams.”
Nah, it’s all about perspective. I’m still digging ditches at times, doing all sorts of grueling work that other people don’t want to. They’d rather pay me while they go sit on the couch with a libation in hand, only to die early. Meanwhile, I’m in better shape than most people 20 years younger than me.
But I’m not digging ditches for the man. I AM the man. Hard work is good for the mind, body and soul. I think it cures depression, along with a healthy diet. Too many people are too soft. Now, I’m not doing hard labor every day, but sometimes you’ve got to be on the end of a shovel. Equipment only does so much. I was just carrying a bunch of plywood earlier today. I’ll sheath an outbuilding by myself tomorrow, but I digress.
*sheathe
Who designed this autocorrect garbage, anyway?
Whoever designed autocorrect can burn in hello.
Depth…
and saving was a virtue…and you could get a fair return on your savings….and you could “do without”, save the money, and get on your “financial feet”.
NOW, saving is punished at the rate of 5%….going backwards for saving….all by INTENTIONAL FEDERAL RESERVE policy….for with inflation at 5%, Powell doesnt lift a finger. Unheard of , un precedented…….SHAME on them.
burnbrighter
I LIFT MY HAT ? TO YOU SIR.
Having worked many low-wage jobs I agree that most are soul-crushing paths to nowhere.
BUT when you see all of the lazy addicts & mental health crazies just sitting around begging for cash to support their vices that the ordinary working person cannot afford, you get angry.
Very angry.
Gavin Newsom has done nothing constructive to help California. This recall will show just how angry people are, but the politicians & fawning media will act
so surprised at the results.
Then the panic & finger pointing begins.
… as you point a finger at people you see as beneath you.
A good American can always find someone (preferably lower) to blame, for anything……it’s our second most popular national sport, next to collecting as much money as humanly possible.
Wolf,
Last paragraph: “More people will rejoint the labor force …”
Even though I am retired, I did pick up some ‘Apple Fritter’ recently. Yeah, it’s a good time to rejoint.
Thanks ?
You’re quick on the typo fix.
Joints are wasteful anyway.
If you don’t smoke them, they are a waste.
If you smoke them, then you are a waste. ?
(come on….you were waiting for it!)
A country exists for its people and the country can well afford it. The $1tn spent on Afghanistan would cover a lot of $300 payments to the unemployed.
Define “Afford”
To most people “afford” doesn’t mean just adding more and more to a debt with no chance of ever paying it back.
The money spent in Afghanistan over 20 years over four administrations is gone.
We used to call it sunk costs.
And you never use sunk costs into calculations for spending or budgeting money.
I think we would all be happy if Afghanistan isn’t mentioned again. The big guy most of all would be happy. As you said, sunk cost.
“The big guy”
Lmao
The big guy would really like you to forget about the military aid he has given to the Taliban, assault rifles, MRAPs, helicopters, drones, light attack aircraft. The big guy is really generous with your tax dollars. And yes… this is all on him, because he is in charge when the withdrawal is happening. He could have ordered the equipment withdrawn or destroyed ahead of time. Seven months of time…. Cause he knew he was going to leave, unless it was a last minute decision. ?
MCH,
Utter nonsense. Your Biden-hatred is incapacitating your brain. The equipment was given to the Afghan military by the prior presidents, including Trump. The Afghan military was supposed to fight off the Taliban with it. But instead, they ran, flew, and drove away, as everyone has known for 20 years that they would. If Biden had tried to yank that equipment (aircraft, armored vehicles, rifles, etc.) away from the Afghan military (if it were even possible), everyone would have rightly accused him of completely destroying the Afghan military.
Yeah, well ..
Look.. We’re ALL going to be sinking down into the poorhaus, now that the uSS Biden has finally ill managed to hit that rocky Afghaniberg.
” The $1tn spent on Afghanistan would cover a lot of $300 payments to the unemployed.”
I think it was more than $2 trillion dollars spent in Afghanistan. And the cost in human lives lost or ruined? much more.
Well at least those people didn’t stay at home …. ;)
That estimated $2.2 trillion dollars spent was not completely wasted. It brought many tanks, fighters, copters, bombs, armored vehicles, guns, ammunitions, missiles, and personal defense contractors. Many of these equipment made in the US, notChina. I mean it was a boom for LMT, NOC, RTX, SAIC, BA, GD, etc.
I’m sure they spent some on roads, military bases, Afghan army pays, local infrastructure, etc.
If this country could truly afford anything, it wouldn’t be trillions in the hole.
People think they can afford a house because they can make the payments. The truth is they cannot afford the house. If they could, they wouldn’t be borrowing hundreds of thousands of dollars.
We have developed this strange view that debt is prosperity. It’s not. Owing gobs of money is much closer to slavery than prosperity whether it be ad the federal level or the household level.
But yeah, Afghanistan was basically for nothing. We spend way too much time and money in the Middle East.
The people pulling the strings think the Trillions in debt is an economic stimulus….
That is the ridiculousness that must end….for they are wiping out the future of coming generations to fluff the present….
As the system grows on the back of ample energy, the prosperity is real, and only fools get into debt.
As it first plateaus, and then tips into decline, debt is confused for real prosperity, and the issuers of debt flourish mightily.
As it collapses (where we are now) debt is taken on in desperation, and the issuers seek to transition to a new system: the ‘Great Re-set’, Mark Carney, etc…..
@Kk
A Martian arriving on the scene would say QE dollars divided by population equals what everybody should get.
If you got more ‘Kudos’, if you got less, you got screwed! Tough.
Just sayin’
I think the old phrase Extend and Pretend need to be trotted out again.
The combo of ending $300 Extra Fed assistance, followed by taper, followed by end of eviction moratorium, and then probably end of mortgage forbearance (is that still going on)… all of it put together is like suddenly taking away all the punch bowl. People might get unhappy.
So, we need extend and pretend, some of it is already starting with Lambda, although certain people in charge seem not to have learned their Greek alphabets, epsilon comes after delta. Then zeta, eta, etc.
Actually, after Lambda Lambda Lambda comes Omega Mu
For anyone who has studied economics, this can’t possibly be a surprise. I wonder how many members of Congress have had even one course in economics after high school.
AOC majored in Economics of I’m not mistaken
Do you know why economists use decimal points?
So weathermen have someone to laugh at.
Be careful what you wish for. Academic economics isn’t the same as the stuff that works in the real world. Too many college-educated folk consider themself knowledgeable but what they “know” often “ain’t so”.
I know a PhD in Economics from a top tier university and he has absolutely zero understanding of how the American economy *ACTUALLY* works. It is pretty amazing that he can do various different kinds of sophisticated modeling and simulations, and yet doesn’t understand basic things about lending and the nature of money
YES PG,,, and, unfortunately that exact concept can be extended to almost every facet of current debate on ALL subjects.
Was once, long ago, a ”shelver” in a library dedicated to two subjects, and, after shelving all the returns, was allowed to spend the rest of my shift actually reading the stuff in the stacks.
Not once, in the dozens of ”monographs” I read, did the data presented support the conclusions of these papers prepared for their authors PhD theses…
Definitely going to catch up with us sooner and later IMHO.
PhD…. I remember the acronym from a long time ago, funny then, and still as applicable today.
Piled High and Deep.
Why work your life away to make the corporate owners more rich? Unless you have to?
Start a business.
That’s BS. The unemployment benefits saved my life. I lost my job because of Covid and this guy wants me to flip burgers for nickles?
Rick,
So we’re talking about the extra $300 a week in top-off benefits from the federal government, not the normal unemployment benefits under the state’s program, which continue.
No one expects you to do anything, certainly not “flip hamburgers for nickels.” This article was about cause and effect — in terms of the “labor shortage” that we have heard so much about.
There are no moral judgments here in the article.
BTW, Walmart’s entry level pay is now, I think, $13-$19/hr depending on where you are. Not “nickels.”
“There are no moral judgements here in the article.”
Thank you Wolf. So many people look at data and then realize they are getting called out, and then their special, sensitive snowflake egos are slightly bruised by tiny micro-aggressions in stated factual objective data. I guess they will have to schedule a special, additional coaching / counseling session with their therapist over FaceTime
“No moral arguments involved?” BS. Everyone has a value system through which they view their lives. Everyone.
Very true CJH, although it does change with time/context/situation.
And I for one make an effort to keep learning and changing, as much as my “basic worldview” allows, anyway.
Maybe I should have just said Yep….it’s hard to tell from the inside.
Pot calling the kettle black…lol
The minimum wage in San Jose, CA is $15.45 per hour.
Of course, you need to take into account the cost of living there.
Yes, you do. Too often people do not take into their conclusions the great differences in the cost of living throughout the United States.
A basic one bedroom apartment in San Jose or New York can can easily be three thousand. Certainly, you would find it hard to get a one bedroom for two thousand. But you can buy or rent an entire multi bedroom house for that in much of the rest of the country.
So fifteen dollars per hour might be far too low in much of California while more than enough to at least survive in the Deep South.
So the screaming about people loafing on the supposedly exorbitant is partly caused by where people arguing live. To someone living in the Bay Area, saying 50K is a good wage is simply crazy talk. It might get you a one bedroom apartment.
Simply put..after reading the comments.How can anyone be amazed that lots and lots of normal American people..LOVE to be Paid for doing nothing,since its far from Counter-Intuitive and to me ‘Politically-neutral’…? lolol
One of the things that I appreciate the most about Wolf’s journalism is that it is intentionally politically agnostic. Wolf just presents data.
This issue of paying people to do nothing is absolutely not partisan. Both parties doled out the cash for votes!
I don’t understand people on WS who after reading all of the data and articles that Wolf puts out, they STILL think party A is better than party B.
Maybe now Home Depot will have some hunks out in their lot to help loading peoples cars instead of the current policy of of letting senior citizens drag their sorry a$ses out there in the heat and doing it themselves.
As I posted before if I ever got a resume from one of these lazy bums and saw a 1 year period of sucking off government stimmies and Unemplyment it would find its way into the shredder so fast your head would spin.
Is it common for these retailers to have hired hands load purchases in customers’ vehicles? That sounds like a luxury to me. With retailers cutting everything and with an alleged labor shortage, this should come as no surprise to someone who’s been around the block a few times? You’re afraid of people mooching off the gvt (via taxes they themselves paid), yet you’re mooching off H.D. and their luxuries?? Take along a hired hand next time—ain’t nothin’ in life free. As one who is voluntarily not in the labor market and has never taken a dollar of U.E., I can assure you it’s mentalities like yours that people are doing this. Like expecting someone to have 10 years’ experience, advanced degree, work weekends, be under 25 years old, and work for peanuts to fill your job?????? I’m about as conser vative as they come, but some of you oldsters are oblivious to life after, say, 1970.
TGH
I am a senior citizen and I notice the same. So many of my peers are miserable, have always been miserable…and want all others to be even more miserable.
Life is truly wasted on such creatures.
SC
What makes my head spin is reading about your towering and endless resentment.
Give it a rest.
Good, keep posting about your hypothetical fantasy of rejecting resumes. Seems like you have nothing else to do
Phoenix, you have said absolutely nothing helpful or even positive or uplifting on WS. What is your deal?
Home Depot always had people there to help load your vehicle. This is a new thing. Not having anyone there. I would think it would help provide customer loyalty. Also prevent theft. When they had people there they were very careful to check your receipt and load the exact amount that you paid for. Judging from some of these comments its obvious you don;t know a thing about running a good business.
Lots of liability if the employee gets injured moving the heavy item into customer vehicle or the vehicle gets damaged.
If you buy it online it just shows up at your door. It’s easier.
Are U going to hire illegals ,no English and 4 years education at most? They came here bec they can not find jobs in Mexico or Central America bec of lack of skills.Most of them come to CA,i do not see them in New York so far and local illegals would hate them.
Are the trillions of dollars in tax cuts given Bezo’s and the like “sunk costs”? If your CPA is working to get you out of paying thousands,/millions in taxes is that sucking off the government? I speak for myself, as well. I have CPA’s working to get me every tax break. I’m hustling — which means at the core of it all — I’m no better than people hustling a system for $750/week — I’m just using bigger numbers. So, who am I to judge? Just my 02. But for the grace of God….
True….all those years Amazon did not pay sales tax. They need to now let mom and pop stores benefit from no sales tax and if your LLC in not in the state you live you pay sales tax.
Time to give the mom and pop stores a tax cut
ru82-you’re right, and we should, but way too-late for too-many vanished small brick-and-mortars.
disruption. it’s what’s for dinner…
Before bashing all those recipients as lazy and moochers, remember something.
1. Most are laid off without their mistake. Their sectors were reduced by 50% in operation. e.g. Air hostess.
2. When the air traffic reduced, the shops, restaurants and the associated business were either reduced or forced to close.
3. Women especially mothers must take care of the children until the school starts on Sep.7th.
4. Similarly if you are living with ageing parents or immune-compromised, vulnerable adults such as a cancer patient mom. If the son catches the unspecified virus, then mom will get it and wont make it. So, he cannot go to a job.
5. Remember, even nurses and medical aides who had jobs were forced to work longer hours with unruly patients. The hospital staff were strained both physically and mentally. They have to quit their job and stay at home for their sake of well-being. Even now, the freedom loving patients who did not take the vaccine and no-masks are arguing with nurses against the covid. True story
6. The predominantly red states who opened, forcefully and never closed paid a huge price. Cases are raising in the red states. Then now the blues are also affected.
7. Commuting is now a hell with reduced bus services and early closings. Places gets quieter even at 7pm. How can the restaurant can be open when there are no single customer. I am not talking about the tourist trap city centers. Go a little bit far away where regular people eats, the foot print is still reduced.
8. Just because of $300 extra a month given to people and the financial ethics related to it, do you want people to work in potentially dangerous situations? Or is it worth for the worker to endanger the life of his ageing mom so that you can go on a tour or take a vacation during this fall?
The problem is the infantilized government. The bubonic plague killed 40% of the population in the 1400s but they never shut anything down, because they would starve. They did burn a lot of witches tho. The shutdowns are 21st century’s witches.
LOL!
Thanks for the history lessons! So I guess the “witches” were blamed for the plague. Also at the time, I don’t think technology was advanced enough for people to work from home :-)
Its also very interesting that the Plague..not being a respecter of persons…killed Rich and Poor alike,actually opening-up opportunities for a nascent..Middle-Class…!
The Plague (darkness or death) caused so many deaths because, administrators and rich fled the towns and forts to the rural areas. Minimized the human (and rodent) contacts. Newton (Son of a Lord) was one among them. Poor and not so rich died even back then. Now, the well-to-do society wants the lower level people to risk their lives again!
CP:
It’s an extra $300 per week, not month.
Maybe congress will extend before they end. The child tax credit payments aren’t enough to feed the bears alone.
States might extend it.
Under what justification?
Being California
“Dream of Californication?”
Our state (NC) is flush with money since the Fed’s doled it out. They are begging people to take advantage of covid rental assistance, state employees got bump in pay, some for bonuses, and the NC house passed an income tax cut. Teachers are complaining about tax cut and said it ought to be dumped into education.
Old School. So the federal money allowed NC State to reduce one of their taxes, the income one. Now who is the manipulator? NC State and the citizens who make enough to pay an income tax. In New Hampshire they cut the dividend income tax. You know for all those folks with signs asking for a handout at the intersection. The thieves are not the poor. It is the well off who are most often the thieves.
New Fed Mandates
“It is the Federal Reserve’s actions, as a central bank, to achieve these goals specified by Congress: promote unemployment by providing cheap money to the federal government to dole out and encourage idleness, promote inflation, punish savers and holders of dollars, and promote record low long term interest rates so as to facilitate the pulling of wealth forward from the future generations of the United States, and we will partner up and take advice from outside entities that have big bets on in the markets.””
LOL!
Consider this one:
“The persistent inflation that plagues us will not be vanquished – or even substantially curbed – until new currents of thought create a political environment in which the difficult adjustments required to end inflation can be undertaken.” – Arthur F. Burns, former Fed Chair, 1979 speech.
Until someone in authority starts talking like that, things are likely to keep getting worse.
Exactly.
People point to the inflation of the late 70s and early 80s.
Well, back then we had a Fed that FOUGHT inflation
Now we have a Fed that PROMOTES inflation…
how did that happen? The “stable prices” mandate is right there for all to read….and the Fed laughs at it…and us.
Inflation was 15% back then…
Another gem from the 1979 Arthur Burns speech – would fit right in with Wolf’s writing today.
“In the United States, for example, people have come to feel in increasing numbers that much of the government spending sanctioned by their compassion and altruism was falling short of its objectives;
that urban blight was continuing;
that the quality of public schools was deteriorating;
that crime and violence were increasing;
that welfare cheating was still widespread;
that collecting unemployment insurance was becoming a way of life for far too many –
in short, that the relentless increases of government spending were not producing the social benefits expected from them
and yet were adding to the taxes of hard-working people
and to the already high prices they had to pay at the grocery store and everywhere else.”
In the original it’s one long sentence so I parsed it out a little to make it more digestible. Didn’t change any words or punctuation.
This speech could be worth an article of its own…
@WS
Brilliant!
If we had any French here they would no doubt say,”The more things change, the more they stay the same.”
Historicus. The Federal Reserve pumped up asset prices in order to protect the wealthy, who own all the assets. I’m absolutely certain this was not to help the poor. In 2008-09 the same thing under Obama. The Fed bailed out Wall Street and left millions of homeowners on their street. Yet you get PO’d for a measly $300 additional check to those who most need it? Unemployment is based upon your income. If you have less the check is less. Same with SS, and the older you are the less your income over your lifetime compared to more recent incomes. Same with Medicare and Medicaid benefits both of which are reduced in states who do not support those programs with state taxes. Like NH.
While the US wastes trillions of dollars in middle east boondoggles, continues to shovel money and power upwards to bezos and his ilk, fails to provide healthcare and a basic standard of living to it’s own populace so spectacularly that life expectancy has been declining in the most powerful country on earth, China is showing some balls and attempting to address the wealth inequality and housing crisis in it’s own country. All this while they continue to silently extend their influence globally (see afghanistan and many other examples). 30% of both Gen Z and Millenials have a favorable view of Marxism. 60% of those generations support a complete change of the US economic system away from capitalism.
We’re witnessing the decline of an empire. Communism will win and all the while the old men on this board will continue to comment about needing low-wage servants to help them load Chinese produced crap into their cars from Home Depot. GG
*didn’t even have to comment on climate change or the US birth rate reaching its lowest point ever.*
Got to hand it to China, they’re at least trying to level the playing field for both the capitalists and the workers, looking to achieve more of an “Olive” shaped wealth distribution graph (not to many at the top, not too many at the bottom either).
In the USA there are no limits to the excesses of capitalism since the mantra is quite simply, if it’s profitable, it must therefore be good for everyone involved. We could certainly learn a thing or two from China in a number of different areas, but it’s too late for the USA since we’ve become incorrigible. Besides all that, American’s are far too proud to consider learning anything from an emerging economy.
Don’t be misled into thinking this is for virtue or equality. Its quite obvious after the Jack Ma debacle that the CCP doesn’t want any power struggles internally
China demographics (wiki):
91.11% (1,286,310,000) are Hun
8.89% (125,470,000) are minorities in about 40 ethnic groups
“China is showing some balls…”
What a credulous news hound! You’ll believe anything. As for Marxism, I’ll hold my breath.
Oh yeah, like the previous generations of this country who bought every bit of propaganda hook line and sinker for decades? I’m glad Bezos can wank off in space while a quarter of this nation’s children go hungry. All because some people didn’t want their 401k’s or home prices to go down.
Chinese propaganda on Wolf Street now? Either that or these two are smoking something good. I don’t disagree with your comments on our dear America but do take a closer look at China.
Seriously, I want my $4 back for that bottle of “Evian” at the [freezing cold] Beijing airport. It tasted like toilet water. And by the way, the “toilets” at that airport are literally holes in the ground. When you run into an actual toilet, it has a sign informing locals not to stand on it. Not making this up.
I did manage to tell two people about Jesus while I was there and didn’t end up in prison. But maybe that was because I came with thousands of dollars in “required gifts” for a government institution for the privilege of finishing what I came for.
And don’t get me started on how you have to break the law just to check your Gmail account. And shall I mention that my products are illegal to buy in China? Subverting the culture and all that. The CCP is all-around pitiful.
Is it any wonder that Chinese capitalists park their money on the west coast of America? Sheesh, you guys.
@P
I think, if the Chinese were communist they would have gone the way of the USSR long ago, like the West swept them under the carpet when the wall came down.
What is clever about the Chinese IMO is that they’ve invented an entirely new way of running a country which harnesses all the economic benefits of capitalism, while still being able to organise and manage a vast population of 1.4bn people. This is no mean feat and the detailed organisation of the CCP is an extreme meritocracy, much like the ancient civil service which gave China total dominance of the ancient World. They had entry exams even around 1000ad I believe.
There is no need for us to hate or fear cultures that choose to operate differently from us, If we want to beat them we should do it peacefully, by being cleverer than they are and working better than they do to make better stuff than they do. It can be done, we have the talent, it’s just a plan that’s needed.
Maybe so old one, but when I was there it was not pretty, even in HK, and the current novels and ” other fiction” ,, ( written by Chinese folks, ) I read these days tends to support the concept of a dog eat dog world continuing for the vast majority of citizens of mainland and now HK China.
While there is no doubt that the overall standard of living of the masses has improved, there is also little doubt most would leave if given the opportunity and availability of funds.
When we see NO Chinese folks moving to Canada and USA, and even folks moving TO China from here,,, that will be different, eh
VV
Always good to chat.
I think your legitimate points can be referenced to the fact that, for roughly equal Gdp, China has 4 times more people which means they are on average 4 times poorer than US citizens, so there is still a lot of poverty there that wants to move to a better land cf Mexico etc.etc.
I think the CCP are extremely aware that they must continue to deliver if their future is to be good. I hope we never see a mass exodus of Americans going to live in China in future???
I doubt China’s population numbers. They don’t add up if you add up the populations of the largest 50 cities then compare to a population density map and wonder.
The charts show continuing claims have dropped. They don’t show employment is up. Or am I missing something?
People may stop claiming but still not go back to work. They may get by on a spouse’s income, decide to retire, start their own business, etc. My state ended benefits June 30. Anecdotally, hiring problems remain unchanged. The nearest Starbucks actually just started shutting down part of the week due to lack of staff.
Is it due to lack of staff, or not allowing staff to work over 20 hours a week?
The employment data is a different report that comes out monthly. We just had the July employment data. Employers have increased their payrolls by 2.5 million people in three months. That’s a LOT
https://wolfstreet.com/2021/08/06/weird-phenomenon-of-labor-shortages-as-millions-of-people-who-could-work-still-arent-working-its-easing-employers-hired-2-5-million-workers-in-3-months/
I know a couple of guys in the restaurant and hotel business in the Lake Tahoe area. One has a small restaurant, the other works in senior management at a major hotel. Both told me they could not get their employees to come back to work, but they could see their employees having great times via their Instagram pages. All thanks to Uncle Sugar.
Step one to universal income….
No doubt one reason for all this is to move us closer to UBI.
It gives us a glimpse of what UBI will look like.
@h
The Martians said that the deficit divided by the population was what everybody was entitled to and if you got less you were being screwed.
I managed to get rid of them so there’ll be no UBI in our time.
Might take UBI and the removal from the workforce of those on it, to get companies that need workers to pay a living wage to those who can work and want to work.
This medical/economic experiment we are undergoing has cast a lot of people who were surviving in marginal jobs into unintentional unemployment. If they don’t continue some form of UBI there will be hell to pay with millions and millions of destitute people on the streets getting angry.
Maybe that was the plan. I don’t know.
Whats it cost to buy a house in Tahoe now?
I was there a few years ago and it seemed like $1 million bought a pretty crappy house. And Trukee was just as bad.
How are these workers affording that?
No worries, there are some crappy apartments nearby or they live down the hill in Carson / Reno with the other regular people. A boat slip in Tahoe probably leases for more than am apartment in Reno, and Reno ain’t cheap any more. And yes, the homes are not one bit attractive under the $2,000,000 mark.
All the workers have to drive over the hill from Carson City area..or use the southern “freeway”..that hill road to North Shore is short, but can be a real nasty road in winter.
Anyway, lots of trailer parks in NV, including the fenced ones with the working girls. Was only $20 for half ‘n half in late 70’s…hate to guess what it is now.
A neighbor of mine retired from a major uber-luxury hotel chain about 3 years ago. He was the GM of their local outpost. He is now working (again) at the hotel as they have a shortage of employees. They invited him back and he accepted…. and he can write his own ticket (hours, etc.,).
A theme of my beloved aunt, (whom I used to call weekly but recently died at age 94), was that United States culture is incompetent on putting limits on people’s rights or benefits. Once a person in America’s extreme individualist culture in convinced they have a right or benefit, it has to be full blown with no constraints, no conditions, and no consideration of their particular situation which might not justify what they want. I don’t think that attitude can be changed — culture changes very slowly.
An example would be a person who continues chain smoking and destroying their liver by excessive alcohol, feeling they should have equal rights to heart transplants, insurance premium payments, etc.
There is also the change in many younger people’s attitudes toward employment. I still can’t quite understand the attitude of my niece telling me (pre-pandemic) she would demand that her employer let her work a modified work week with less hours (and retain the same benefits).
Things happened to me as a young adult that scared the crap out of me about being unemployed (although, like some are doing now, I did take advantage of unemployment insurance once when I was unfairly fired for “questioning authority”).
If I was at the young or middle adult phase now, I would not hang out collecting benefits, but instead try to get apprenticeship in the building trades or something similar. I would be making major effort to find some angle on getting good job mobility with good pay. A few years back I replaced old water pipes with pex tubing in my small rental house when I was still living there, and I like that kind of labor in a way — doing a good job.
After having come of age during the GFC, I just cannot believe the ignorance of some of the comments by the elder readership here.
+1
I seem to recall losing 90% of my income as a self-employed person during the GFC and being entitled to zero unemployment benefits. That motivated me to save a sufficiently large emergency fund after I got back on my feet.
It’s different this time. People won’t learn to be more self-sufficient. They’ll just expect more handouts and money printing which ironically is theft by inflation from those who did save cash for such a time.
That’s the problem with universal franchise. People can vote themselves other people’s money.
Just remember that today’s millenials were born and raised (and trained) by the original millenial – baby boomers
Wrong! Sister’s oldest coming up on 50…genZ?
We are due a BLACK SWAN event. With this many massive levers about to be adjusted against the lower 75% something is going to break. Life lines save lives but when every hand reaches for it the strain will fray the line resulting in a breakaway event
Data shows that removing these “top off” payments results in workers returning to work on a large scale.
Like moving across the country you have to rely on so many things to go just right. Any single failure will be chaos. Shippers, renters not leaving, car breakdown, auto haulers, COVID in pockets of hotels…
“We are due a BLACK SWAN event.”
Imagine another 9/11 type attack…this coming 9/11.
Having gone through two decades of Afghanistan…..what would be our response?
Could this debacle in the withdrawal from Afghanistan and the political leadership’s apparent abject failure be this black swan with untold consequences to emerge in the coming days.
Just a thought?
The deal with the Taliban was negotiated almost 2 years ago. Hardly a Black Swan.
@h
Why would there be another 9/11 attack if nobody hated you. If you hang up your gun and leave people to get on with their own lives, they don’t hate you and they don’t attack you, especially if you’re 6000mls of sea away from them. It’s NATO that sent a fleet to China, do you think that makes the Chinese happy??
Just askin’
Paul praised the Macedonians for their faith in providing for his needs. Paul was sharing Jesus’ teachings and the Macedonian believers wanted to help him.
Jesus praised the good Samaritan who helped the victim of a violent robbery on the road from Jerusalem to Jericho. It was charity, if not socialism.
Well, the intention of the extra $300/Week is obvious: Deprive the small businesses – that struggle anyway – from affordable labor as long as possible. If you can push them over the edge, finally, they will not come back, and you have the economic system you want: A few big companies allied with the state and the rest of us, depending on the powers that be completely. Than the rules are clear: behave, or else …
It’s becoming hard to think that this wasn’t the plan from the beginning. Coupled with eviction moratoriums intended to put small landlords out of business, I no longer think the government acted incompetently, but maliciously.
Landlords out of business.
Blackrock scoops up.
Not sure. I read people in power knew they had to be generous with the working poor because they bailed out the big banks and Wall Street in the GFC. They knew they had to helicopter money or it would be pitchfork time.
Hussman states that government deficits basically result in corporate profits, so being generous to blue collar is actually being generous to stockholder, at least til the game is up
Right, exactly. So giving people money to spend at Apple or Amazon, leading to corporate profits, and more wealth for the top 1%, exacerbates the wealth gap, leading to investors rampaging through the housing market and making housing and other things unaffordable for the working poor.
Some “generosity!”
Not only that, which is just old-style fascist ‘croney capitalism’ but also the merger of the remaining corporations, Big Tech and the ‘state’ intelligence agencies is envisaged as part of the Great Re-set – all there on the WEF website and in their videos/seminars.
You know, just to make citizens ‘safer’…..
Conspiracy = Observation.
“A few big companies allied with the state”
Yep, this is the plan. Add the elimination of the small business 20% tax cut in the new Infrastructure Bill.
The government can then outsource all its enforcement functions to 6 large global companies.
Near me I’ve seen a number of new small restaurants open up. A few chain locations that were dead for years have been rehabbed and new places coming to life.
Not sure how they are finding workers. I have noticed service has been fairly slow and bad at some chain places.
Any explanation as to why Friday’s New York Times has an article [referencing a research paper] that expressly disagrees with your analysis?
If you get your economic information from the New York Times, that’s your own problem. It’s the same outfit that told its readers don’t worry about inflation because inflation allows the over-indebted NYT company to raise its subscription fees and revenues, and pump up its stock price.
This here is based on government data on unemployment claims from the Dept of Labor.
Even a broken clock is right twice a day. Can you explain the discrepancy or does it satisfy you to just attack the other guy?
My comment was not meant as an attack on your analysis, rather an attempt to understand the difference.
I read the NY Times article. It doesn’t say that ending unemployment didn’t encourage work. What it said was that the states were better off by not ending unemployment because more money was in the local economy to be spent.
That’s not even close to the same argument.
From the NYTimes article headlined “Cutoff of Jobless Benefits Is Found to Get Few Back to Work”
Data released Friday by the Labor Department provided the latest evidence. It showed that the states that cut benefits have experienced job growth similar to — and perhaps slightly slower than — growth in states that retained the benefits. That was true even in the leisure and hospitality sector, where businesses have been particularly vocal in their complaints about the benefits.
William Coney,
1. They’re mixing data sets to try to support their editorial line. They’re using jobs data — jobs created on a monthly basis — obtained by surveys of establishments, which is released the first Friday of the month, to explain unemployment insurance — people coming off unemployment insurance — a different data set released on a weekly basis and not survey based, but based on actual UI claims.
2. Their jobs data (released first Friday in August) was based on surveys that were collected in the middle of July. So they missed the crucial last four weeks of the trends. Look at my charts. What happened over the past four weeks that the NYT totally missed???
3. I don’t know this for sure because I’m not going to waste my time reading this garbage, but the NYT author likely did not download and sort the time series for each of the 50 states, and then sort them into two groups, the 27 states that ended the benefits, and the states that kept them, and then tallied both groups and made a chart to compare both groups, like I did with the unemployment data. This takes hours, and I doubt that the author did that. It’s just a lot easier to write a data-free opinion piece.
This kind of brain-dead BS is precisely why I don’t waste my time reading the economics section of the NY Times. You’re welcome to quit dragging this crap into here.
William Coney,
Look, the NYT is pretty good about hounding politicians. They’re pretty good about reviewing books and plays and musicals. And I heard their crossword puzzles are great, and their recipes are good, etc. But when it comes to economic coverage, they suck.
Wolf and WC:
Gotta go with the Wolf on this one, mainly due to having been one of those who read the NYT from cover to cover ”back in the day” and still at least try to read there sometimes…
NYT was clearly the base case of ” the news, all the news, and every bit of the news” one needed to know back in the days before and up to the end of the VN war;
after that, not so much and continuously declining since then, to and including today…
WHY they continue to follow down the path to
becoming/being completely irrelevant, I really have no idea, but that they have done so, is now without any doubt from those of us who used to consider them THE best.
The NY Times and Washington Post are the poster boys for fake news. I wouldn’t waste one minute of productive energy reading these rags, and I don’t like people sending me data or quoting editorial opinions from them. I’m not interested!
Wolf Richter: Thank you for explaining why you think their analysis was incorrect.
Four years of Trump and his false attacks on “fake news” have made me very wary of those who defend their views only by attacking those who disagree. Please consider being more open to explaining your views by pointing out where you see the error in others.
I’ve subscribed to and enjoyed your newsletter for a while now and have recommended it to many others. But it’s impossible to change someone else’s mind if your only response to questions is “oh just ignore that worthless source and accept my view without question.”
If the govt gave people $300 a week extra as UBI then rents would go up by $300.
If they don’t then rents will simply saturate income as is.
If people worked six days a week and got paid 20% more, rents would go up 20%, and house prices would too.
Those already in land would get the 20% uplift. They would see this as “growth”, even if they only have one house and it really makes them worse off. Those in the game at the step change get the uplift.
Anyone joining the game after that gets to work Saturday *for the same house as before* but they get a one day weekend.
It was the same in the transition from single family worker to both parents working. Women now work for free, prior land owners already took their wages via the uplift when mortgage lending changed.
This is how prices are set. This is how it works.
Working “harder” won’t get you out of it. Buying less coffees won’t work.
It’s a feature of a system. Because land owners get unearned gains.
Friedman understood it. Adam Smith understood it. Ricardo understood it.
Rousseau understood it:
> “The first person who, having enclosed a plot of land, took it into his head to say this is mine and found people simple enough to believe him was the true founder of civil society. What crimes, wars, murders, what miseries and horrors would the human race have been spared, had some one pulled up the stakes or filled in the ditch and cried out to his fellow men: “Do not listen to this imposter. You are lost if you forget that the fruits of the earth belong to all and the earth to no one!”
Americans were “free” in a land of opportunity when land was abundant, making it cheap. Now when they buy a farm the seller gets their surplus value as a function of their productivity and the price of credit. And ubiquitous computer technology makes issuance of credit very cheap, meaning the exploitation is very close to perfect.
Either you get this or, as is happening now, you die on your knees.
“Raising rates” won’t fix this, because it doesn’t address extraction of surplus value via available credit, making all gains flow to land.
Land value tax fixes this.
Thank you. Very well said.
Nothing will change until some stop getting wealth for nothing while others labor under harsh conditions. There I’ve said it, I must be a communist. No, but this is the seed that will eventually unite the true idealists of the right with the true idealists of the left. Not the false noisy opportunists. On that unification, this corrupt system will finally succumb to change.
Massive wealth is now acquired by trickery, corruption, and fraud. Sure maybe Facebook, Google, and Amazon are things of value and innovation and the founders deserve credit and rewards. But the massive wealth increases are due to financial manipulation only allowed by the creation and gifting of massive amounts of money from a fraudulent few. Amazon stock would not be worth the enormous amount it is without the distorting flood of Fed created money. Money held at par with money earned by investment labor. Unlimited amounts of money created for free and loaned cheaply = money earned by creation of goods? Why is this allowed to distort markets and society?
It’s not so much the left or right economic system that is at issue. It’s a lot more fundamental and based on “science” : parasites kill the host.
If you don’t like corporate America, don’t use their products. A lot of people complain about Bezos, but can’t wait for the Amazon package to hit the porch.
My favorite is people complaint about capitalism while taking selfies on I-phone and sharing on Facebook.
I put my money where my mouth is. Stopped buying anything from Amazon except books for multiple reasons. They hacked my credit card, enrolled me in Prime when I didn’t want it, and sent me defective products which found their way into the trash can. Boycotting Whole Foods as well.
This is not a comment about the system, it’s just some tired old boomer glib comment that moves the discussion from systemic macro to silly stuff.
There are actual monopolies, which is also rentier behaviour.
That is systemic and is also a function of our times, which needs addressing.
Did you read what I said?
Bezos made his money on stock. Stock prices boosted by the printing of money by privately controlled bankers. If you think stock prices were not boosted by $8 trillion of fed balance sheet expansion. I have no hope for your intelligent comprehension of facts.
BTW, take a look at IC contracts. Competition at it’s finest.
I wouldn’t say an iPhone is the fruit of capitalism. What is it, $1200? If competition were alive and well, I believe we’d have something better than the iPhone at a much lowe price.
Bobber,
Think about what you are saying. I-phones and the cell phone network are the result of hundreds of billions of capital investment, maybe several trillion on the idea that there would be a return on investment.
I have never bought an Apple product in my life, because I am a late adopter of technology and am happy with a $60 Samsung, LG or Motorola phone.
Even at $1200 an I-phone and the cell network is an amazing tool for our life if used wisely.
You have power as an informed consumer to bring most corporations down to size. No sales means no company.
> Nothing will change until some stop getting wealth for nothing while others labor under harsh conditions. There I’ve said it, I must be a communist.
It’s only because of the dire education system in the USA that you need to state this. They are not knowledge based, only propaganda.
Until rentiers are put back in their box, all this talk of rates up/down makes no difference at all. It will still be about who captures future surplus value based on if they are long/short land before and if they have to buy / sell after the step change.
It really is not hard to understand, we all experience it every day.
We all know people who do the same jobs, add the same value to society, who have very different lives because one bought before and one had to buy after we financialized land.
We all know the landlord with the sports car who is semi-literate and would be at a shift manager at McDonalds, if he had the work ethic.
The Fed does not set rates. The Fed follows rates. Rates are low because real growth is low. Real growth is low because our system rewards rentiers, who appropriate growth from those who are actual wealth creators. As rates have gone down rentier activity has become more lucrative, as each rate cut becomes a bigger and bigger cut relative to the current rate (1% to 0.5% is a 50% cut in interest cost of carry vs 6.5% to 6%). That is the feedback loop. Again this is not hard to understand.
Until rentier activity is made less rewarding than real activity this dynamic will continue.
The Mrs and I, have never earned over 80,000 in combined
Wages.
Friends and neighbors mostly in the same boat.
Some choose spend it, some put in the stock market, others such as I saved and put it in land.
So am I now evil?
I will gladly pay more, if all….ok….
Most of the zoning restrictions are removed.
Maybe we have to make the coastal areas a little more like flyover. Nothing wrong with parking a double wide on Martha’s, the Don’s golf course, or next to Nancy’s.
As far as landlord, somebody has to build the dwelling when means somebody somewhere had to save a lot of money to build the dwelling and put in infrastructure. It wasn’t built with printed money. A landlord is offering a service. You don’t have to take him up on the offer. A bus ticket can get you to anyplace in the country and in normal times to less capitalized countries where the costs are less.
Old School, how much productive growth is cut off by this? It’s not good for society that a person with capital is better off buying existing housing or stocks, and not creating something new. but our policies incentivize the former.
This landlord built a small house which I rent out at 50% the going rate to my friend. I must have spent 4-5 months building the place after I retired, using up the cash I had saved up after taxes and leftover materials from previous jobs. In fact, I just dropped off the 82 year renter old a load of wood so he can run his splitter and stay busy.
How evil it was lying on my back doing the plumbing and wiring in the crawl space. How shitty it was buying new appliances for the renter who had no home.
His rent covers all my taxes and insurance on my property, which I had also saved up for with after tax dollars while listening to everyone saying I was stupid for buying it at the time (12 years ago).
Being a good landlord is pretty thankless most of the time, but I take heart in knowing that if I ever get a shitty tenant my son and his extremely tough friends will be able to evict them for me. In fact, we’ll run them out of the valley. I also feel thanks knowing my hard work has appreciated in value over the years.
Old School
Yeah an honest investment deserves an honest return. I have been a landlord. I cleaned and repaired toilets.
My point is that it should be all free market activity. If I build $1M units in a a flooded swamp, do I deserve a reward? The market will decide. But it should not be up to speculators working with thin air low cost money. If they want to put up their own cash fine.
Even OPM stretches to a limit. But thin air printing has no limit. Look at $1T sloshing through REPO because, why not.
The value of rental units should be determined by renters. Cash basis.
Futures markets have a place for farmers and the like to hedge investments they make in production. But not for speculators funded by Fed printing.
The whole system is rotted out by those with cheaply acquired money from the Fed competing with people that do not have the same backing.
And I did not even get into rental deferrals and state payments to landlords in lieu of rental payments- more air money.
> As far as landlord, somebody has to build the dwelling when means somebody somewhere had to save a lot of money to build the dwelling and put in infrastructure
Sorry but this is not the correct inference and that confusion stems from the lack of the concept of rentier income in American society.
All this was known to everyone in 1890s but I guess now we live in a different world.
We have:
1. the unimproved value of the land – in most urban areas this represents the majority of the cost. For example: two storey home in the middle of a major urban centre: $2mm. Exact replica of the same house in the middle of a field in in the middle of nowhere with no power and no sewage connection: $250k. Land cost: $1.75mm.
2. The improved value of the land. Example: field in the middle of nowhere with planning permission. Land value 50k. Field in the middle of nowhere with house on it: 250k. Added value: 200k.
Society creates the value that forms the unimproved value of the land. That value is not the land but the location. It’s near a hospital. It’s near a metro. It’s near shops, cinemas, supermarkets. All of this has nothing to do with the land owner.
Yet the land owner of a $2mm 2 storey house that he build only added 250k of value. The other $1.75 mm was created by society.
That latter portion, against the unimproved value of the land, should be taxed away.
The part that represents improvement by the land owner should *not* be taxed. He added value, he should keep that value. Paulo for the love of god I really hope you were able to read this far so you can get this distinction and stop with the interminable anecdotes.
That’s it. Read up or not. It’s a basic economic concept that I have seen discussed zero times on this site after reading tens of articles and thousands of comments.
Paulo: if it’s an anecdote it’s poor thinking. Get onto the next level and speak in abstract terms, none of this “I do this / that and I’m taking this personally yet again”. Grow up and discourse.
j2,
While I do NOT disagree with your “Massive wealth is now acquired by trickery, corruption, and fraud. ” comment,,,
I would really like to know if you would prefer that WE the Peons go back to the days when the ”massive wealth” was gained by equally massive violence by the lords and kings and warlords and such???
For myself,,, having worked up from digging the ditches to the consultant class after 60+ years,,,
I would really and truly prefer an entirely/purely merit based society, in spite of WE the Peons apparently not ready for such purity, yet…
Clearly, a more equity/equality based tax system would be helpful, however unlikely to be brought forward when the corruption of the political puppets is at it’s currently (we can hope) likely height, eh
Your question is a good one. Is non-violent survival of the fittest better than violent survival of the fittest. That is: are we better off ruled by clever manipulators of the currency than by brutes who beat us up.
Frankly I don’t know. Looking at it from a purely Darwinian POV, non-violent survival of the fittest does not support biological evolution. See Idiocracy. So from a naturalist scientific viewpoint, physical violence and death is the preferred option.
But who said Darwin was right?
From a traditional humanist POV, intelligence should begat a better more robust diversity environment. Well we have that and it looks weak in a physically constrained world. But maybe the clock has not run far enough to see the result.
But the expansionists suggest a synthesis of human and AI culture to evolve into a more efficient phase. Here you get a new possible type of brute or partner.
So in which option do you want to compete? Which option do you have a choice in selecting?
All are possibilities. You pays your money and you takes your chance. Don’t worry. We all dance on the stage for a brief moment. Enjoy the experience. You can make the statement you want to make in any situation. Who the statement is made to is another question.
We still have massive wealth gains by violence. The only difference is that the violence comes at the hands of the state, not individuals.
Voting or lobbying yourself money or financial advantages is as much violence as doing the robbing yourself.
Indirect you point at why people in power have been that worried about Covid. A plague that kill a lot of the people reshuffle wealth.
Suddenly there is no shortage of land. That create havoc to rentiers income.
This is also the reason population decreasing in numbers is feared. There will be more land for each individual and less shortages.
@g
With you on land tax but I would also add a capital offshoring tax along with a flat rate income tax with no reliefs for any reason.
Getting rid of all other taxes and shutting down the Pentagon would about do it IMO if you could get a decent health system.
Long live the idealists!
One overlooked thing your chart does not show, is quite a few that were receiving those $300 benefits, stopped as soon as the work search requirements were reinstituted in those 26 states. Yeah, unemployment claims went down but it’s not necessarily because people went back to work, it’s because they were already working part time and didn’t want to make the extra effort to input the work searches, so they ended their claims.
1. The issue you describe would be the same in all/most states, and so it would cancel out in terms of the DIFFERENCE between the Enders and the Keepers, which is what the data here is.
2. If you work part time and claim unemployment at the same time, saying you’re unemployed, unless it’s under a special program, it would seem like fraud to me. And it’s hard to pull off unless you’re paid under the table because employers share the employee data with the state office that handles the unemployment claims, such as the EDD in California, for employment tax purposes.
Almost all the work done by landscapers around here is done “under the table”. Its almost considered a patriotic duty to pay cash for services so as to reward them for good work. Eliminates about 40% overhead. I do it all the time and don’t feel any guilt whatsoever. Had a tree removed that was hanging over my house. Got quotes from Tree companies for $2,200. Hired 3 Guatamalans for $700 and they did an excellent job and cleaned up the mess.
Hope you have an umbrella liability policy for $1M plus as I doubt that those Guatamalan’s you hired have Workman’s Comp or hospitalization. That’s what you pay the tree companies for…. their overhead required to meet government regulations.
Imagine if they accidentally dropped a tree on someone, your house, or neighbor’s car.
As an example: When we lived in Oregon, a neighbor had an unlicensed gypsy roofer working on their house. He slipped off the roof and fell onto their deck and broke his back. Guess who got sued? Guess who didn’t have enough liability insurance? $300K didn’t cut it. And that was in 1998.
That’s fool’s gold savings….
Excellent job at robbing the original Merican’s of their rightful wages!
Well, now we just have to admit that we are importing a huge servant class through illegal immigration.
After all, the working class has been destroyed by it, now it will come for everything thanks to our rentier classes.
With 7 billion people on the planet- there are billions more to exploit!
When you own a big chunk of the bloody third world, the babies just come with the scenery….
Wolf,
You can work and collect in most states, as long as, you don’t make more than your benefit. The criteria for getting the extra $300, was getting at least $1 of benefits in the week. So if your benefit is $250 and you make $100 working part time, you will get $450 in benefits for that week, 250-100+300. If you work and make $250 or more you don’t get any benefit for that week.
Wolf,
Based on personal experience, many many folks, employers and employees, are paying and working for cash money; are now and always have been since my earliest days as part of the ”Corps of Engineers of Berkeley.” back in the sixties…
Had then, and have had since, many years with NO income on my SS records, while I was working for cash in SF bay area, and then other places similar…
Trying to put together the deductions from my pay checks in some of those years when the employer paid nothing into the SS system while deducting from my pay, was and is impossible…
None the less, it certainly DID happen and DOES continue…
Late to the party, but – this means that people will start working while simultaneously getting a pay cut. I don’t think this is the economic score some think it is.
By now, it may be a wash for many people since wages have risen. But they’d have to work for it.
of course not, but for those who operate via spite this is a big win.
UBI is inevitable. Social Darwinism is bad history, like capitalism. By the laws of intellectual property and the principles of scientific management, people are entitled to the fruits of their robotic labors. Nobody owns a robot, its possible to approach this two ways, one emancipate the robots, or two, charge the factory owners with intellectual theft. Currently all the states which have rescinded Fed benefits are Covid hotspots the gov. of FLA is proud of his economy (go to work so the tourists may come here, the GDP number will rise. And throw another virgin in the volcano. We have such a long way to go to stop dehumanizing people. Low income Americans would be better off in the streets of Kabul.
“UBI is inevitable.”
No, it’s not inevitable. It’s just another taxpayer subsidy for the stockholder class so that companies can keep wages low and enhance their profits. That’s what UBI is ALL about.
Just listen to the billionaires talk about it.
Food stamps are already used for that purpose by corporate America. If you work at Walmart and make so little money that you qualify for food stamps, Walmart should be charged back for the costs of any food stamps that its employees receive.
If the US didn’t have the current wage-repression system in place, that includes unlimited immigration that opens the US labor market to the endless supply of cheap labor in the world, these poor billionaires and stockholders would have to bear the higher costs of labor. And then there is the totally unfair tax system in the US. There are lot of things that need to be fixed.
I would have to agree with you on this Wolf.
As outrageous as $2500 / Mo+/- in free $$ seems to many, it makes it that much easier for those with existing wealth OR those motivated to rise above the fray to continue to rise.
I speak with immigrants on occasion and they still see the USA as an opportunity to win or lose on your own terms vs Europe where group think reigns supreme, or in a regime state.
Introductory UBI could arguably allow the cream to rise to the top faster because competition is placated with the bennies. Wealth divide grows, but so does innovation ??
Anyhoo, this is what I am hearing from immigrants with education / drive / desire to rise.
If you haven’t noticed, the USA is now tipping towards 21st-century style Totalitarianism, and a command and control fully digitised economy.
Those aspiring immigrants are going to be mightily disappointed, I’m afraid…..
100%, but they won’t get fixed, so in a sense Ambrose Bierce will be proven right in the end. UBI will be coming. Those stimulus checks plus enhanced UE were just the beginning.
This analysis misses the point. By the time UBI is put in place, Inflation will wipe out any benefit to those receiving these handouts and they will wind up back to square 1.
I think it won’t be that simple. There will be periods like last year where clearly a lot of people received quite a bump in their purchasing power, but then there will be periods where there’s just enough to keep people from drowning. The thing is there’s nothing that say that the amount received from UBI has to be constant. They might index it to some value that’s easy to manipulate.
I agree with both Wolf and Ambrose.
UBI is inevitable and is already happening in different forms. Also, UBI is a transfer of wealth if one cans ee thru it: From middle class to Billionaires.
Billionaires/Big Corps don’t pay people enough, and these people need help from Govt in form of food stamp, section 8 housing, medi-ad, etc etc but Billionaires/Big Corps use the tax loopholes to no pay their fair share. It is either paid by the middle class or borrowed from the future.
UBI: Universal Billionaire Income
Honestly, only a collapse can fix this country.
Not only UBI, but expropriation of private property – on a massive scale – will also feature.
De facto, private property will be abolished, for the little people, and remain the exclusive privilege of the true owners of the economy – which is why it will not be abolished de jure.
Timescale? 2025-35.
Technically everyone who isn’t working is unemployed, and BLS agrees, they remove and add people from the general population according to their needs. The unemployed are a subset of the general population. If you provide benefits to some and not others that is discriminatory. The way to make corporations responsible is to relieve them of the profit mandate, by subsidizing labor. The alternative is just what you are getting, refuseniks. That happened in Germany in the 30’s didn’t end well.
All sounds good except California # of hospitalized due to COVID are now 8236 vs. July 2020 peak of 8820 (Jan 2021 peak was 22836).
COVID numbers rising all over the US as well – high vax states are actually seeing worse results than the “no vax” states, although the no-vax had high numbers to start with.
I think if it weren’t for the recall election, there would be re-imposition of lockdowns etc in CA already. Of course, SF has already imposed vaccine passport requirements for indoor stuff.
Will be interesting to see how that plays out.
c1ue,
Florida has roughly half the population of California, but has 16,500 hospitalizations = four times the rate of California’s hospitalizations.
You’re completely off the mark with your politicized lockdown theory. There have been 4 deaths in San Francisco so far in August, and infection rates have plunged from a seven-day average of 289 at the beginning of August to 181 now. Daily numbers have been coming down hard since people started putting on masks again. Vaccination rates are very high here, and there are lots of ICU beds available. NO ONE in San Francisco is talking about lockdowns, and it was the first city in the nation of impose a lockdown last year. It’s similar all over the Bay Area.
Thank god for vaccine requirements for indoors. Many businesses already implemented them MONTHS ago, including my swim club, and it went fine. There is only a relatively small number of people over 12 who aren’t vaccinated. So no big deal except for a few antivaxxers. We’re not in Florida here.
Today’s numbers for San Francisco:
There is certainly an element of Bread and Circuses to what is going on. Historically, such pacification and appeasement has not ended well.
The thought that anything is “free” is the thought from the mind of a child. There is always a cost.
I have a hard time reading the comments on this website (and I greatly appreciate the hard work Wolf puts in to write his articles, and have send him money every time he requests it). The number of commenters that believe in statist, socialistic, or communistic fixes for our problems is mind numbing. So many of you believe that the symptoms are actually the problems, and believe that government needs to be in the business of solving those problems (which are actually symptoms).
So we take the godless and immoral policies, people, and government that have given us this garbage, and we ask them for more of the same.
Until we as a country turn back from our envy and covetousness (just read georgist and his desire to tax the landowners and rentiers) and theft (through taxation and inflation), we are going to reap what we sow. And we are reaping it good and hard right now.
Right now we are an immoral people governed by immoral people. We have unjust weights and measures (through inflation by currency printing), theft through taxation (which is ok as long as the ‘other guy’ or the ‘rich’ pay it). The rich get richer through inflation of asset prices and cozy deals between business and govt., and they pay the poor off with free stuff, paid for off of the backs of the middle class savers and the children of all.
The fact that some of you believe that the profit motive is evil, and that we should subsidize people with UBI is crazy.
Wolf suggested that if people make so little money at Walmart that they qualify for food stamps, Walmart should be charged for that. How about if we get the government out of all the areas it has no authority and let people contract as they see fit. If big business was not able to collude with big government, than people and businesses would be free to negotiate as they see fit.
And no, libertarianism (which has no value system) is not what I am suggesting. Simply capitalism (which is just a term we use to explain what happens when people are free to make their own decisions with their own capital in the marketplace) on a foundation of God’s moral law. Equality before the law, not equality of outcome. If you look around you at all the blessings you have, that other countries don’t have, this is why.
Do not be deceived, God is not mocked; for whatever a man sows, that he will also reap.
Sam Rutherford,
“How about if we … let people contract as they see fit. If big business was not able to collude with big government, than people and businesses would be free to negotiate as they see fit.”
The problem is the unlimited supply of cheap labor through illegal and legal mass-immigration. There cannot be a functional market if the supply is unlimited. The price (wages) will crash because there is nothing to stop it.
For your model to work, the US would have to close the border to mass-immigration. Once the supply of cheap labor is constrained, laborers have bargaining power, and then the labor market would work. But it would be the end of cheap labor, and the US is an economy that has always had cheap labor, and Corporate America and the government insist on it.
And remote work will probably facilitate cheap labor for even white collar jobs…
SR,
You fail to see that your philosophy of unfettered capitalism absolves businesses from any contribution to the system that protects and harbors them. Allowing businesses to contract in any form should require those businesses pay into the system that nurtures them. You want a free ride for business, which leaves labor bearing the cost. There’s no morality in workers and consumers carrying businesses on their backs.
And think ahead a bit. One of Musk’s robots was in the news today. When business can be domiciled elsewhere for taxes, and robots can provide the products and services. Will you still be cheering on capitalism with no social responsibilities? Wait until your job disappears.
The elephant in the room is, how many will ‘never’ be coming back to work after the pandemic. From outright deaths to long-covid disabilities to millions of missed routine health appointments. We are talking huge numbers here and they won’t be finally known till all the dust settles.
Earlier pandemics totally transformed the value of labour relative to capital, due to a much smaller available workforce but now we have more machines to offset some of the slack.
As always we have to wait to see what happens.
My Youtube feed for whatever reason has recently been filled with a bunch of videos claiming that a whole lot of people will be quitting soon to escape the abuses of Corporate America. No doubt many of these people are thinking of doing “content creation” i.e. becoming a Youtuber. “If A can do it and make a lot of money, then I can do it too!!”
Forget the stock market, content creation is the true bubble.
The NYT has an interesting take on this; the extra UI ‘juice’ to the unemployed will likely be spent 100%, helping to prop up local economies (the rich just banked theirs, or took a better vacation). Cutting the juice may have a knock-on secondary, detrimental effect to local economies.
California Bob,
Yeah, old saw. You give free money to people who don’t have enough, and they’ll spend every dime, and it ends up in the pockets of the rich.
This is effectively a wealth transfer from taxpayers to the rich, who end up with the money after it gets spent.
That’s why the NYT is supporting this. Just like it is supporting lots of inflation. Which is pretty insidious when you think about it.
I think we can agree that all money ends up with the rich–a bit of circular reasoning–but if some is spent locally then at least those businesses can hang on a little longer. That’s the theory, at least.
Or, should we rely strictly on ‘trickle down’ instead?
NYT = “Mirror, mirror on the wall” for the rich and powerful.
Yes, the rich will benefit, but I will still have my designer handbag and logo encrusted flip flops. And some really poor kids might have eaten well for a week or two.
The solution isn’t to give people free money. The solution is to give them employment that pays adequately, even if it squeezes corporate profit margins.
Maybe the ‘free money’ allows workers to hold out for better pay?
Wolf
‘even if it squeezes corporate profit margins.’
Ideal and wishful thinking. Didn’t happen in the pre pandemic world. Why do you think it will happen now? What/who is catalyst for this change?
Capital is winning and the LABOR is losing, under the Crony Capitalism which has morphed into Predatory Capitalism! Private Equity companies( Black rock++) are flourishing. Are they going to reduce their profit margins? How about Big Pharma?
I am not pessimist but realistic based on facts.
It wasn’t even wishful thinking. I’m with you on this in terms of this solution becoming reality. It won’t.
In addition to the trend in unemployment claims, I would like to see the comparison of wage trends. Do wages move in the same way between Enders and the Keepers?
The data released yesterday, 8/20, by US Gov does not support your conclusions. Rather, the data says there is no evidence that ending the supplemental UI affected emplyment. “”There’s no sign of the end of supplemental UI” affecting employment, said Mark Zandi, chief economist at Moody’s Analytics. “There’s just no evidence.” Politico had an article on it today, 8/21.
Jack,
I gave you and everyone else the ACTUAL unemployment claims data released weekly by the government on Thursday: I downloaded the time series for each state from the Dept of Labor put them into the two groups, and tallied the numbers. That is what you get if you do it yourself, and that is what Moody’s and Politico’s would get if it actually ran the numbers.
These data-free opinion pieces drive me nuts. That’s why I give you the ACTUAL data. It took a long time to do, and that’s why others didn’t do it. They just use their own opinion instead of data.
Jack
Mark Zandi has been wrong more often than right.
Jim Cramer said on CNBC that the return of the Delta Variant was a good thing for the stock market. The damage to the economy from the variant would force the Fed to keep the money flowing without letup. He said Powell was not going to tighten or taper until the affects of the Delta variant was mitigated. As sick as this may sound there may be some truth to these statements.
Re-surge in delta variant, with antigenic escape may prove him right!?
Will more printing, QEs and ZRP or NRP help the bottle neck in supply chains or the so called ‘transient inflation’?
Look at FXI – the Chinese mkt is close to 52 week LOW! EM mkts are also sliding but not bad as China!
The US mkts are in a world their own supported mainly and purely by Fed!
Here in my local area (DC Metro), they can’t find enough school bus drivers for the new school year. Just heard that on the news this morning.
Also, our neighborhood garbage pickup has been late a bunch of times lately. We got a message that it’s due to labor shortages.
Not just in the DC metro.
The contractor that picks up the garbage here is doing “One heck of a job”. Its one of the few things that is working well here, along with the Metro system.
##it only ever happens to us .. right.
SBS news this morning .. Truck Drivers Shortage .. deliveri8es may not arrive to the destinations.
It sounded like the drivers did not want to work .. in fact the truck drivers come from all over the 28 member nations of the EU & even as far as Africa & there is a shortage of entry & travel permits.
Blame the victim works when you pay the media to tell it so.
The Coles delivery arrived at 9:35PM .. 20 minutes ago.
The driver has been on since 9:00AM
Due to a shortage of drivers .. who are in isolation because they have tested positive for COVID .. there is a shortage of drivers.
He will be delivering until 11:30PM
It is cold & wet outside ..
He will not be paid OVERTIME.
Coles pays the 8 hour day & no matter how many hours you work extra .. it is free.
Safeway are worse .. they contract to LINFOX who contracts out to other transport firms .. who contract out to other smaller firms who hire the same drives as Coles at a lower rate.
When COVID hit .. our supermarkets closed for a few weeks ..
TO SCARE THE ##IT out of us .. we the people .. there was no viable reason for them to close .. none.
The shutdown of our supermarkets because of COVID was paid for by the government .. GOVERNMENT MONEY .. subsidised the supermarket shut down.
Only that there is no such thing as GOVERNMENT MONEY.
Yes !!
Yes !!
That’s right
I do not begrudge the workers a bit of free money & I most certainly will not condemn them.
There are rumours flying around about FREE MONEY being syphoned off to offshore bank accounts .. now who could have such easy access to money from the Australian purse .. for this to be happening ??