“No one wants to work anymore,” reads one sign taped to a McDonald’s drive-thru. Many fast-food and service industry companies are reporting that they’re facing a labor shortage created by unemployment insurance. This myth has been refuted by workers and analysts’ data. The real problem is the stagnant, starvation minimum wage which if it kept pace with the over 657% rise in inflation & 176% rise in productivity over the past 50 years, would be $24. The free market capitalist solution is for employers to raise their wages and offer safe working conditions to attract workers.
Labor Effects of Unemployment Insurance
A letter from the National Owners Association, a group of McDonald’s franchisees, stated, “When people can make more staying at home than going to work, they will stay at home.”
While April’s job numbers were dire compared to March — 266,000 jobs added versus 916,000 in March — a $300 a week benefit is not the cause of this so-called “labor shortage.” Unemployment benefits to help people survive a pandemic that has killed 587,000 people and unemployed 114 million in 2020, are not generous enough to cause people to resign to unemployment. Workers report wanting a fair wage to work in hazardous conditions.
Furthermore, various studies found that even the $600 unemployment insurance from 2020 had little to no labor supply effects (employment or job search.) One study found that, “employers did not experience greater difficulty finding applicants for their vacancies after the CARES Act, despite the large increase in unemployment benefits.”
Studies show that unemployed workers who receive benefits search for jobs more, get better offers, and get roles more suitable for their educational background.
Laying blame on the labor force, who has experienced eviction, mass hunger and unemployment levels not seen since the Great Depression, while billionaire class’ wealth surpassed a $1.9 trillion gain, is both callous and unwarranted.
Unemployment benefits are not depressing work, starvation wages are.
A Starvation Wage
If the minimum wage kept pace with the over 657% rise in inflation and 176% rise in productivity over the past 50 years, it would be $24. It peaked in 1968 at $11.18 when a manufacturing job bought you a house for $26,600. The $15 minimum wage was needed years ago.
Workers making $7.25 an hour earn 18% less than those in 2009 did. Raising the minimum wage modestly to $15 per hour would give more than 32 million Americans a raise.
Moreover, exploitative corporations use taxpayer money to subsidize starvation wages that leave employees relying on public assistance programs to barely survive, while executives reap billions in profit. Approximately 70% of adult wage earners receiving Medicaid and SNAP benefits worked full-time hours on a weekly basis. It’s morally despicable that someone working full-time can’t afford to exist. There is no excuse for multi-million and billion-dollar corporations (like Walmart who gained $64 billion during the pandemic) not paying their workers enough to eat and survive. Corporations’ labor costs are so low they’re being subsidized by taxpayers.
If businesses refuse to pay their workers $15 an hour to survive, they shouldn’t exist. The free market capitalist solution is for them to meet the market need and provide livable compensation in exchange for producing all the labor keeping their businesses running.
The problem in the United States is not unemployed workers in a pandemic receiving $300 extra to survive, it’s that employers are robbing those producing wealth of their dignity and ability to support themselves. We should all be fighting to raise wages for the most vulnerable among us. As 1 Timothy says, “a worker is worth their wages,” or as Leviticus 19:13 says, “You shall not defraud your neighbor; you shall not steal; and you shall not keep for yourself the wages of a laborer until morning.” Or as Deuteronomy 24:14 says, “You shall not withhold the wages of poor and needy laborers, whether other Israelites or aliens who reside in your land in one of your towns.”
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