Last week I strode into a Cousins sub shop intent upon enjoying a delicious Philly steak sub and a side of cheese curds. Behind the counter was an extremely friendly, if harried, man and woman working like a whirlwind filling orders. I was fourth in line and there were seven other people in the store waiting for their food.
As the man called each number and gave a patron their order with a friendly smile, he repeated the same message: “If you know of anyone who is looking for work, please let them know that we are hiring.” As I ordered, he apologized for the long wait and explained that they just could not find people willing to work. They recently held a job fair to which a single person showed up. A fellow customer piped up and said that he ran a shop and was having the same problem. The owners were working 16 hours a day just to keep up.
While we all waited for our orders, all the customers were friendly and patient. The conversation turned to the omnipresence of “help wanted” signs and the impact on businesses and their customers all over town. Somebody offered that “it pays more to sit at home and do nothing than to get a job” to universal nods of agreement.
After finishing my sub, I turned to wave a thanks on my way out and was reminded to, “tell everyone you know that we are hiring!” It was a moment in time in a simple Wisconsin sub shop, but it is a scene that is being repeated all over the state. According to the National Federation of Independent Businesses, a record 44% of small businesses report having open jobs that they can not fill. This is double the 48-year average and the third consecutive month reporting a record high.
Wisconsin’s businesses are trying to bounce back, but unemployment policies implemented during the early days of the pandemic are now impeding their recovery. It is time to end those policies.
There are two primary policy culprits that need to be rescinded immediately. The first policy is that the federal government is currently funding an enhancement of $300 per week of unemployment payments. This results in unemployed Wisconsinites receiving as much as $670 per week, or the equivalent of $16.75 per hour, as Wisconsin Manufacturers & Commerce noted in a recent letter to Governor Evers. It is much more than that, however. That is $16.75 per hour without the hassle of commuting to work, buying work clothes, paying taxes, shaving, and actually working. $16.75 an hour for doing nothing is worth more than working for $20 per hour.
The second policy is that Gov. Tony Evers has waived the requirement that people receiving unemployment seek work. Recipients are not required to prove to anyone that they are looking for a job. Without the requirement to seek employment, some people receiving unemployment benefits are content to just wait until the gravy train ends.
Both policies result in a sizable number of Wisconsinites making the very rational and pragmatic decision to remain on unemployment unless they can find a job that pays substantially more than what they are already receiving for not working. For people who lack the job skills or work ethic to command a higher wage, the unemployment system has become a very comfortable hammock.
The numbers illustrate the problem. An economy is enjoying full employment when anyone who wants a job can have one. Most economists agree that an unemployment rate below 4% or 5% indicates than an economy is in a state of full employment. In prepandemic April of 2019, Wisconsin’s unemployment rate was 3.2%. In April of 2021, the unemployment rate is 3.8%. Wisconsin’s economy has returned to full employment.
Yet in April of 2019, there were about 21,000 people receiving unemployment benefits. In April of 2021, there are about 92,000 people receiving unemployment benefits. In an economic state of full employment, Wisconsin has about 70,000 people receiving unemployment payments who would not have been just two years ago. They are being paid to not work.
Seventeen states have already announced that they will be ending the $300-per-week federal unemployment enhancements. The enhancements are doing more harm than good. Wisconsin should immediately follow suit and end federal benefits.
The suspension of the requirement that people receiving unemployment payments show proof that they are seeking work should also be ended. It is not unreasonable to require that people receiving unemployment benefits actively look for gainful employment. There are plenty of available jobs.
There is no longer a crisis of unemployment in the state. There is a crisis of employment. Wisconsin must rescind emergency rules and reinstate normal order for the unemployment system. Returning to normal is no longer a matter for the virus anymore. It is simply a policy choice.