Republicans are still at war with workers – 11/05/2021 – Paul Krugman

Has the Republican Party, which has defended the interests of big business and sought to keep wages low since the end of the 19th century, suddenly become populist?

Some of your rising stars would like people to believe that. For example, after the 2020 election, Senator Josh Hawley said that “we must be a party of the working class and not a party of Wall Street”.

But while Republicans have recently attacked some companies, their fight with big business seems to refer to non-economic issues. It bothers them that a part of American companies has positioned itself, albeit moderately, in favor of social equality and against the suppression of voters.

What they don’t mind is the fact that many companies pay little or no tax and pay their workers poorly. On these issues, the Republican Party stands as it always has been: for tax cuts that benefit corporations and the wealthy, and against anything that can improve the lives of ordinary working people.

The most recent example: the Republican effort to end the expanded unemployment benefits that have supported millions of American families throughout the pandemic, even though unemployment remains very high.

Several Republican-controlled states have acted to fund the $ 300 monthly supplement offered as part of the US bailout, even if it means their governments rejecting the money received at no cost, which helps them boost their savings. – the supplement is fully covered. by the federal government.

And who called for a reduction in aid to the unemployed. The United States Chamber of Commerce, look at this. But hadn’t the Republican Party become an enemy of corporations and an advocate of the working class?

Before getting to the substantive issues here, it’s important to be aware of the historical background – namely, that Republicans have always been against helping the unemployed, regardless of what the economy is in.

In 2011, with the economy still in a deep depression following the 2008 financial crisis, Republican leaders attacked unemployment benefits which, she said, encouraged people to “stay in. home and watch TV ”.

And in the middle of last year, when an increase in coronavirus contagions forced much of the country to return to lockdown, Senator Lindsey Graham said extending benefits to the unemployed “will only affect our corpses.” .

I mention these examples from the past so that readers will be convinced that the emerging attack on the unemployed is not a good faith response to everything that is really going on in the economy.

Having said that, is there any argument for saying that the relatively generous benefits hamper economic recovery, discouraging Americans from accepting available jobs?

Until last week’s jobs report, there was broad agreement among economics researchers that the expanded benefits adopted during the pandemic did not significantly reduce employment.

Notably, the deadline for benefits of $ 600 (R $ 3,143) per week introduced in March 2020 has not led to a general increase in employment; especially in low-wage states, where benefits should have created a strong incentive to reject job offers, the level of employment did not increase more than in high-wage states, when benefits expired .

On Friday (7), however, the U.S. government’s Bureau of Labor Statistics reported that the U.S. economy created just 266,000 new jobs in April, well below consensus expectations, which were in the range of a million jobs.

It was proof that the economy is really down because we “pay people not to work?” No. For starters, one should never overemphasize the numbers from a single month, especially in an economy still distorted by the pandemic. For example, the low number reported went through “seasonal adjustment”.

The economy, in fact, has created over a million jobs; however, the department responsible for the calculations weighed on the numbers as the economy typically creates many new jobs in the second quarter. This is common practice and statistically correct – but are we having a normal second trimester?

Moreover, if unemployment benefits hamper job growth, we would see the worst performance in low-wage sectors where benefits are high relative to the average wage.

But the real pattern was the opposite: strong growth in employment in low-wage sectors, such as leisure and hospitality, and loss of jobs in high-paying sectors such as professional services.

I don’t want to give too much importance to this, as there are other things happening as life gradually returns to normal – even though the employment numbers describe the situation in mid-April, too early to tell. reflect the significant progress made recently against the spread of contagion by the coronavirus.

But in any case, the employment figures do not justify that the problem lies in unemployment benefits.

What really happened then? We do not know. Perhaps it was a statistical aberration, perhaps several factors, ranging from the scarcity of chips to the lack of child care facilities, helped hold back job growth.

The wisest thing is to wait a few months for new indications, and not to rush to suspend the aid that has become essential for millions of families.

Punishing the unemployed is what Republicans do, whenever they can, regardless of economic circumstances. The Republican Party, although trying to take a new stand, remains the party of big business.

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