Who does Democrat Gov. John Bel Edwards think he’s kidding keeping the state on Belfare?
Under pressure from state employer interest groups and Republican elected officials, Edwards has resisted terminating early extra $300 weekly payments from the federal government, due to expire Sep. 6. Research continues to build showing that the presence of this bonus, which in many states can hike the weekly stipend by more than double, plays a significant role in discouraging work which then constrains business operations, leaving employers a choice of whether to go out of business because wage demands become distorted higher or cutting back on service hours.
But the data demonstrating this largely are anecdotal and survey-based because of the short interval since the bonus went into effect and that only next week do the first of the half of all states ending it early start to implement this. Only one study, tangentially related – and not particularly applicable to the current policy question because it reviewed data about the previous $600 level and modeled the impact on middle-class wages – has addressed the issue, which showed that roughly one of seven people who refused work did so because of the bonus.
Given this wiggle room, to turn down the pressure Edwards recently declared he would take decisive action of a kind all-too-familiar around the Capitol when policy-makers face a relevant issue needing quick resolution: he would launch a study, to see if ending early would have a positive impact, which is described as taking a “few weeks.”
This stall tactic should fool nobody from understanding Edwards wants to keep the money rolling, as a kind of universal basic income, for lower-income households as long as politically possible – as much as admitting so when he announced his tactic by extolling the moolah gushing into the state as a positive thing, as opposed to measures building a strong economic base. He further tried to justify continuance of spewing the bucks by saying the over-reliance of the state on tourism, which tends to spawn lower-paying jobs and supposedly faced a more severe retrenchment as a consequence of the counterproductive economic restrictions Edwards imposed during much of the Wuhan coronavirus pandemic, perhaps meant the lagniappe hadn’t acted as a disincentive.
That smokescreen shouldn’t distract anyone. In reality, data show that hospitality and leisure jobs were hardly more prevalent in Louisiana (12 percent) than in the country as a whole (11.1 percent) prior to the pandemic and those total jobs dropped about five percent less in Louisiana than in the country as a whole.
Moreover, survey research from employers in that industry consistently reveal that the bonus discourages some from returning to work. One such effort polling line cooks – who make in the neighborhood of $40,000 annually – showed six percent turned off from taking a job by the largesse’s availability.
The data are out there, and the indication that anybody at all won’t take work because of the comfort of the extra stay-home pay validates that program’s end, regardless of the proportional size of idleness it explains. After all, the justification for such enhancement was that economic restrictions stripped away jobs. That people now have the luxury of openings – which stand at a record level even as workforce participation remains well below pre-pandemic standards and average wages have been soaring – and can refuse to return to work provides impressive construct validation that the $300 addition discourages employment.
Recognize what Edwards’ tactic represents – a cover for him to keep the dough rolling in until nearly at, if not up to, the program’s expiration date. It adheres to his economic liberalism that concentrates on redistributing money in the direction of favored constituencies and trying to make society comfortable in living off the dole, with this dependency on government paying off with his ilk exercising command and control to extract power and privilege for themselves.
Maintaining the supplement as part of this offensive isn’t in the best interests of the people of Louisiana as a whole (much less the fact that a quarter of the add-on payments to beneficiaries appear to have occurred inappropriately). Following the lead of much more enlightened states in stopping it before the month’s end is in order.