White House Press Secretary Jen Psaki Says that Americans aren’t Going Back to Work Due to Low Wages, Not Because Unemployment Benefits are Too High

In economics, incentives matter. When people receive generous stimulus checks and unemployment benefits their incentive to get back to work will be quite low.

Craig Bannister of CNS News reported on White House Press Secretary Jen Psaki’s recent comments on why Americans aren’t going back into the workforce. 

In Psaki’s view, low wages, not the provision of unemployment benefits, is what’s keeping Americans from getting back to work. During a press conference on May 14, 2021, a reporter asked Psaki a question about governors deciding to withdraw from federal subsidies to unemployment benefits:

A growing number of Republican governors – I think 16, at this point – have been opting out of the federal subsidies to unemployment insurance. What’s the White House’s position that: discourage more states from doing that?

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Although Psaki remarked that governors have the right to reject the subsidies, she stressed that the Biden administration is of the view that high unemployment benefits are not keeping people from entering the workforce:

What’s important to remember, and what we’ll remind people of, is that, again, we don’t see this as a major driver in preventing people from seeking employment and seeking work.

Psaki alluded to the Wuhan virus, child care, and “the need to be paid a living wage” for people who are reluctant to rejoin the workforce:

And, actually, what we see in the data, to-date, is that the pandemic, not being vaccinated, that there’s been a massive increase in the last month in the number of people who were vaccinated, in comparison with a month ago when the data was taken, fears of not being safe, sometimes child care – and also the need to be paid a livable wage – are all factors that are contributing.

Psaki suggested that companies “offer to pay a little bit more” if they want workers to get back to work. She expanded:

What we would also suggest, and I know someone asked this earlier, is that many of these companies, big companies, let me say, who benefitted, many of them made quite a profit during the pandemic, and many of them also received quite a bit of benefits – $1.4 trillion worth – could offer to pay a little bit more and, maybe, that would incentivize more workers to come back into the workforce.

Ever since the Wuhan virus broke out and the government has responded with vast stimulus and social spending efforts, contrarian economists like Peter Schiff have pointed out that these benefits have kept people from going back to work.

Schiff is correct in noting that it’s not just low pay that’s keeping Americans at home. The fact is that commuting, which eats up time and resources for workers, and overall convenience makes staying at home while receiving government benefits a more desirable alternative for service workers. And in the process, they could actually be earning less in benefits than what they made at work. But with the aforementioned factors in mind, workers will choose the path of least resistance.

America needs to get back to work and the easiest way to do that is by fully lifting Wuhan virus-related restrictions.

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