'Why The Idea of Jobless Benefits Scares The Conservative Mind' [View all]

'Why the idea of jobless benefits scares the conservative mind.' By Sonali Kolhatkar/Independent Media Institute, July 31, 2020, AlterNet. Ed.:

When Congress passed the CARES Act earlier this year, lawmakers gave some low-wage Americans who lost their jobs an income they’ve been demanding for years: $600 a week, which works out to $15 an hour for a 40-hour workweek. Because the federal minimum wage is less than half that rate—stuck there due to the intransigence of conservatives waging a class war against the poor—the coronavirus pandemic ironically gave the bottom rung of the American workforce a taste of what they could have had all along. So popular was this $600 in jobless benefits that even some Republicans who had voted against that provision in the CARES Act boasted about it to their constituents and failed to mention that like most of their GOP colleagues, they had initially opposed the provision.

The main conservative argument against paying unemployed workers $600 a week is that employers who try to entice them back into the workforce—whether it is safe or not—will have to compete with the government payments. Senate Majority Leader Mitch McConnell (R-KY) said out loud, “we don’t want to make it more profitable to stay home than to go back to work.” Think about that: the yearly salary equivalent of this supposedly generous benefit works out to just over $31,000 a year. If employers are unable to compete with such a low salary, there is something deeply wrong with our economy. In Los Angeles where I live, the amount does not even cover rent for a two-bedroom apartment.

Still, so underpaid are American workers that the $600-a-week in benefits, in addition to the one-time stimulus checks of $1,200, buoyed the entire economy as people actually began spending the cash. By May of this year, spending was up by 8.2 % after falling dramatically in the two months before. According to an Associated Press report in late June, “The federal money has pumped nearly $20 billion a week into the economy and enabled many of the unemployed to stay afloat.” According to one estimate, the benefits comprise 15 % of all wages in the nation, and “unemployed people are spending more than they did before the pandemic, while those who have jobs are spending less.”

At about the same time, spending by the richest Americans fell. Credit card use declined dramatically in the first half of the year—a trend that was directly attributed to the nation’s wealthiest people. Those businesses most dependent on selling pre-pandemic-era luxury goods & services to rich folks suffered the most. One study tracked the correlation, concluding that, “Declines in high-income spending led to significant employment losses among low-income individuals working in the most affluent ZIP codes.”...A portion of the workforce has experienced an income that amounts to $15 an hour and there will be a greater public appetite for boosting wages. The pandemic has offered a chance for economists all over the world to study the effects of what has amounted to a large-scale experiment of the kind that proponents of a Universal Basic Income have wanted to conduct for years...

Read More, https://www.alternet.org/2020/07/why-the-idea-of-jobless-benefits-scares-the-conservative-mind/