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Here’s the open line, beginning with another so-so COVID report and more empty talk from the governor:

Today is a reminder that the COVID-19 positivity rate has crept up over the last couple of weeks. While our new cases remain steady and hospitalizations have declined, the virus remains a threat. Keep up the good work, and get vaccinated as soon as you can.

But I’d like to add a few more words about the decision by Governor Hutchinson yesterday to cut tens of thousands of people off federal pandemic unemployment benefits June 26, 10 weeks early. It’s a decision that will keep tens of millions of dollars from flowing into the Arkansas economy.

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  1. This enormous Friday news-dump decision got exactly one sentence some 16 paragraphs or so into a national  story in the Arkansas Democrat-Gazette, the state’s largest and just about only remaining seven-day daily “newspaper”
  2. I have been unable to get figures on the number of people affected and money lost from the crack Workforce Services Division, one of those under the command of Asa’s bonus-baby Mike Preston. Not surprising. At last report, 24,000 people were STILL waiting for unemployment benefits they were due because of the total hash this agency has made of handling benefits.
  3. The Republican talking point that you must cut off unemployment benefits so people will give up their princely $300/wk. is being disproved again and again by aggrieved workers, academic studies and learned economists. It rests first on the myth that all receiving benefits are capable of handling all available jobs. And that workers must be paid peanuts in Arkansas. Though the state government DID talk more than $100 million in federal relief to hold down the unemployment insurance rates of businesses.
  4. Has the governor cut off businesses from payroll protection money?

Think about just this for a minute: How can federal benefits keep you from working IF YOU ARE NOT GETTING THEM ANYWAY, thanks to Hutchinson’s Keystone Benefit Kops at Workforce Services?

The discussion and response on the Arkansas Blog Twitter account cover the gamut from outrage to informative.

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Yes, some jobs are not being filled. That’s not the result of $300 weekly benefits, but many other factors, including low pay and conditions (part-time, no benefits, lack of child care, unvaccinated workers).

A particularly useful bit of information was posted on Twitter by one of the top Arkansas economists, Mervyn Jebaraz, director of the Center for Business and Economic Research at the University of Arkansas. He recommended this thread by another economist to address what Jebaraz called the “misperception that UI is creating a labor shortage.” Too bad Hutchinson, the restaurant lobbyists and Randy Zook over at the Chamber of Commerce apparently missed the information in joining the likes of Montana’s Greg Gianforte in thinking the solution is cutting off stimulus for Arkansas and punishing poor folks in the process by lashing them back to low-pay, low-benefit, sometimes dangerous jobs.

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Michael Hicks, a distinguished professor of economics at Ball State, wrote:

The Jobs Report is a wet towel to those heralding a labor shortage. Far fewer jobs created than losses to UI rolls. So, there cannot really be a ’benefits induced’ supply-side problem. There are 3.5 million fewer jobs today than pre-recession.

For there to be what is commonly called a ‘worker shortage’ there MUST be wage growth. The only way you can signal an excess demand for workers is through compensation. If you cannot find workers, but won’t raise wages, the problem is with the employer.

Recent wage growth is faster, so maybe businesses are beginning to adjust their expectations. But, it is clear that the difficulty in finding workers is a problem with business expectations about wages, not unwilling workers. No wage increase = No labor shortage.

Hours worked are another signal of a ‘worker shortage.’ Overall, there is very little change, but they have risen to pre-pandemic levels in leisure and hospitality. That is the sort of pressure (overtime pay) that helps businesses adjust their wage expectations.

I’m not shy to say that generous UI or lazy millennials are causing a ‘worker shortage.‘ Right now, the evidence suggests it is businesses, not workers that are the problem. It’s not a job because you advertise, it’s a job when you pay enough to attract a worker.

 

Consider this the thread before you join Asa in blaming deadbeats for preferring to score $300 rather than work.

Hicks later elaborated.

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A few of the dozens of comments I received on Twitter:

 

Maybe the D-G will get further into this little ol' story tomorrow.