From the Washington Post:
You will remember that employers squealed they were having trouble finding workers, so Republican states ended extra EI benefits.
The end result? No more workers, but businesses were harmed by reduced spending.
Whoops?
One of the many fundamental “errors” in neoliberal thinking is that you want workers and recipients of government aid to not have a lot of money. After all, they’re a cost.
But every business’s employee is a bunch of other businesses’ customer, and every aid recipient is also a customer. Smart businessmen, or ones who have learned from experience (a.k.a., those who remembered the Great Depression) know this, and want high wages. It’s not a competitive disadvantage if everyone has high wages. Likewise, generous government benefits are good for business.
So smart businessmen want a high minimum wage without exceptions, and generous benefits.
One of the few real insights of modern economics is “marginal” thinking. For decision making, it doesn’t matter what the average cost of something is; what matters is the cost of the next unit — the next widget you make or the next employee. This means that supply matters a lot. For a job for which 100 people are applying, every open position puts employers in the cat seat.
If there are three, a lot less so. If there is one job-seeker per three open slots, well, you’re going to have to raise wages, both to compete and to increase the pool. I recently read an article where a homecare business was complaining that there was one person per ten open positions, but they also noted they paid a couple dollars less an hour than retail and menial labor jobs.
Anyway, even if the Covid death toll seems large, it’s the effect on marginal workers that matters. Add to that that many workers who kept their jobs are not going back to offices and the geography of jobs has also changed. People who run businesses in fancy, high-priced suburbs without any real transit, can’t expect nearly as many cheap workers, because they can’t afford to live in that suburb and traveling to it is hard. You create enclaves that price out blue collar and service workers, you need to go to them, and not vice-versa.
In the larger picture, an ongoing pandemic that just keeps killing and killing, and is killing the poor and minorities in much higher numbers, is naturally going to lead to a tighter job market. While the rich have gotten a lot richer because of Covid, the long-term affect is going to be higher wages.
There will be attempts to avoid this, as with making homelessness illegal, mass-evicting people, then throwing them in prison and using prison labor, but even that has its limits, when there are just less people.
This is a lesson Europe learned during the Black Plague (the people who survived were treated much better than those who lived before), but Europe didn’t fuck up the Black plague deliberately because it was making rich people richer.
Our wealthy are fundamentally stupid in fairly awe-inspiring ways, because they’ve spent the last 40 years destroying the very environment they will need — social, economic, and physical — for their own future prosperity, and indeed, survival. They think their money will protect them from the wasteland they’re creating, but that’s a bad bet.
Oh, I guess the older ones weren’t stupid, but if you’re filthy rich and not at least 60, I wouldn’t be fucking up Covid, destroying the social fabric of the West by encouraging right-wing authoritarianism, destroying democratic legitimacy, and crashing biodiversity while screwing up the climate.
Might come back to bite you on the ass. If you actually care about your kids (obviously you hate everyone else’s kids), you might find all this foolish, too, if you weren’t someone whose only talent is making money by hurting other people.
Anyway, one of the few silver linings coming out of this will be increased wages, unless the rich and their politicians can move hugely to forced labor. Understand that forced labor is the play: That’s why they’re cutting benefits, to force people back to work. It just didn’t work. That’s why they’re criminalizing homelessness, and there will be more policies along this line.
You’re a unit of production, expected to work for poverty wages, and they want to keep it that way even during a plague, even if they have to force poor people to keep working and send your kids back to schools w/out masks or proper ventilation.
This is who the rich are. Who we are, as a group, is people who accept this or even support it.
Meanwhile, employers of low-wage workers should be asking governments to increase the minimum wage significantly ($24/hour in the US, minimum, with automatic increases based on cost of living), not to help workers, but to help themselves. They could ask for transition subsidies for a couple years, and most of them would be fine, and making more money.
But we’ve trained our employers to be idiots, concentrating only the bottom line and not the top line.
(My writing helps pay my rent and buys me food. So please consider subscribing or donating if you like my writing.)
