Republicans on the House Finance Committee this week voted to cut short increased benefits for unemployed parents, arguing that the weekly $75 per child benefit would hurt businesses’ ability to hire heading into the holiday season.
It’s part of an ongoing debate over the labor shortage across the country, which has seen some businesses struggle to hire employees for minimum wage or near-minimum wage jobs as they rush to reopen. While conservatives have been quick to blame boosted unemployment rates, which in some cases can pay above minimum wage, as a disincentive to work, others say it’s more complicated.
Today, Anchorage Democratic Rep. Chris Tuck delivered a rebuttal in a special order during the House floor session that focused on the value of labor, equitable working conditions and a living wage. He said there needs to be more taken into account than just the businesses that can’t hire people at minimum wage or near-minimum wage.
“When we look at those people who are unemployed and look at others that are trying to hire, I guess the real question is: Are they paying a living wage? Nobody wants to be on unemployment. I’m sad to hear that GCI has now moved their call center out to the Philippines because they say they cannot hire people. Well, probably not at minimum wage,” he said. “You look at minimum wage, there’s no opportunity in that. You’re basically making people a slave to their workplace when all they’re trying to do is to work to exist.”
The comments came at the end of a speech about the labor movement in America, where Tuck stressed the importance in unionization so workers could collectively bargain with powerful companies that could otherwise suppress such efforts. He also highlighted the concerted efforts of tycoons to demonize the working class as lazy, mirroring some of the language used today.
“There was civil unrest because people wanted a living wage because, basically, if you’re working seven 11-hour days, you’re only working to exist. You don’t have any disposable income to do anything else,” he said. “There was a fear that by giving leisure to workers that they’d be drunk in the bars all the time. That they wouldn’t have productive lives, that we had to make sure that we controlled them or contained them by putting them to work every day with these long hours, but what we discovered with the labor movement … is we were able to multiply the wealth, we were able to drive the economy.”
He credited the establishment of the middle class in America and their spending as one of the key drivers in the growth of the economy and he said such efforts should be in mind as they approach the recovery from the pandemic. That it’ll be household spending, enabled by good-paying jobs, that helps drive the economy and multiply opportunity.
“I think our responsibility here in the Legislature is to provide opportunity,” he said. “Not opportunity for a few, but opportunity for all.”
What economists are saying
As for unemployment benefits being a disincentive to work, most economists say it’s likely a factor but caution that the situation is far more complicated.
ISER economist Mouhcine Guettabi has been actively studying the pandemic’s impact on the economy in Alaska. Throughout the pandemic he and others have warned that recovery won’t be as simple as lifting government protections and that customers and employees need to feel safe and have adequate support. The problem of the labor shortage, he argues, is multi-faceted: Employers are rushing to hire all at once while people are more slowly returning to work due to fear of getting sick or needs at home, particularly around child care.
“The state should be actively thinking about re-attaching workers with employers contingent on safety. Reducing unemployment insurance without addressing the labor market side of things is problematic,” he said in a series of tweets. “I were king, I would structure a system that makes reattaching workers with an employer more attractive than the unemployment payments. I would also ensure than work is safe and that workers have adequate resources.”