Most of the wrangling in Congress about President Biden’s push for dramatically more social spending has been over how large the expansion should be.
Most of the Democrats want to stick with their original figure of $3.5 trillion, while a couple of moderates are insisting on $1.5 trillion.
The disagreement is holding hostage a $1 trillion investment in “hard” infrastructure — roads and highways, bridges and broadband — that the majority in both parties agree is long overdue.
The president has all but conceded that $3.5 trillion for his “social infrastructure” initiative was a reach, and that he is prepared to accept something in between the two figures.
But there’s a more important argument to be had than how much the final price tag should be. What needs to be asked is whether the largest expansion in social spending since Lyndon Johnson’s Great Society will strengthen this country by shoring up families or weaken it by hooking more of them on government dependence and destroying their initiative.
What’s been happening in the job market lately should have Americans worried about the latter possibility.
On Friday, the U.S. Labor Department reported that fewer jobs were added last month than at any time this year, bursting the bubble on projections of a major uptick. The sluggish performance was not because employers aren’t hiring. It’s because people aren’t willing to return to work.
The U.S. has roughly 11 million job openings but still 7.7 million people are unemployed, and that doesn’t count the 6 million who say they expect to go back to work but are not currently looking. As a result, employers everywhere are complaining that they can’t find enough help to keep their companies operating smoothly, even as they raise wages to try to recruit and retain workers.
The situation is bad in both rural and urban America.
About two weeks ago, I was at a business forum where it was said that several companies are ready to expand in Greenwood but they can’t find enough help to do so.
A couple of days later, I was in Nashville, where I saw sign after sign screaming, “We’re hiring.” We took our grandchildren to dinner at a popular eaterie there a couple of miles from their home. We were told the wait would be about 40 minutes, not because the restaurant was packed but because it did not have enough wait and kitchen staff to seat more than half of its capacity.
This mismatch between job openings and jobless numbers has been going on for months, but it was supposed to get better in September, when the extra pandemic-related unemployment pay from the federal government ran out in all the states that had not ended it earlier.
Why didn’t the labor shortage shrink?
Economists blame heavily the fourth wave of COVID-19, which scared some workers from returning to jobs where they might be exposed to the virus, forced others to keep their children at home again as schools dealt with new outbreaks, and slowed the recovery of the restaurant and travel sectors.
But that’s not all. Workers, particularly those at lower wage and education levels, have become pickier about their pay and work conditions and are quicker to quit a job they don’t like. The Washington Post quoted a University of Michigan economist who noted that employment grew by 350,000 last month among people with at least some college while it fell by more than 430,000 for those with a high school degree or less.
How is it that the working class can afford to be that choosy? The government has enabled it.
Moratoriums on evictions, large stimulus payments and other forms of aid made it financially possible to stay at home during the worst of the pandemic. Even though the extra unemployment assistance and eviction moratoriums have ended, enhanced benefits for those with children continue and in a manner that holds down the pressure to find a job. Biden’s American Rescue Plan, enacted earlier this year, not only added an extra 50% to 80% per child, it also started paying out the money monthly rather than in a lump sum annual tax credit. That $250 to $300 per month per child — on top of what families were able to squirrel away from previous government outlays — may be allowing people to still get by without working.
The $3.5 trillion domestic spending initiative would continue that arrangement at least for another four years, plus throw in other benefits — more help with college costs, universal pre-K programs for children as young as 3, greater housing assistance — that could reduce the necessity to work.
Some government social spending is necessary to protect America’s most vulnerable. When it goes overboard, though, it creates its own harms.
Earlier welfare programs made fathers superfluous, leading to the explosion in single-parent households. If this country is not careful, Biden’s ambitious social agenda could make work optional for a large slice of the population.
- Contact Tim Kalich at 662-581-7243 or tkalich@gwcommonwealth.com.
