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What the coronavirus crisis tells us about our labor market
The bottom line: our labor market has failed
I can already hear the wailing and the gnashing of teeth.
As reported in the Wall Street Journal, three University of Chicago economists have released a working paper describing how two-thirds of American workers eligible for unemployment insurance can receive benefits which exceed lost earnings and one-fifth can receive benefits at least double lost earnings.
The paper goes on to describe how such an allocation of benefits can disincentivize work and make it harder for the United States to recover from this recession.
The response from the right has been telling. In Montana, Oklahoma, Tennessee and South Carolina, the state is threatening to take away unemployment benefits from people who refuse to return to work after being laid off. This policy has even taken hold in workers’ paradise Vermont.
It makes sense, so the argument goes. If people won’t work because they are earning too much money in unemployment, take away those benefits.
The response on the left has been somewhat different. So what if people are earning more money through unemployment than from work. We should just throw more money at people in the form of “universal basic…
