House Speaker Nancy Pelosi might be dishonest, but she’s not irrational. And like most rational people, she knows that if a person is paid more to stay at home than to work, that person will always choose to stay home.
That’s where her dishonesty comes in.
In an interview on Sunday on ABC’s This Week, Pelosi said that negotiations on Capitol Hill over a new coronavirus relief bill have stalled because too many Republicans won’t agree to a long-term extension of the weekly $600 federal bonus that was tacked on to unemployment benefits in the CARES Act.
She said extending the $600 weekly benefits was “essential” and that Republicans were wrong to suggest otherwise. “Again, to condescend, to disrespect their motivation,” she said. “It’s so amazing how insistent the Republicans are about working families and this $600 and how cavalier they are about other money that’s going out.”
Pelosi then pointed to a Yale study published last week, which found no evidence that the extra money “encouraged layoffs during the pandemic’s onset nor deterred people from returning to work once businesses began reopening.”
That’s bogus. The study relied on self-reported time sheets from employers, and there is strong evidence that many of them are simply not filing claims against workers who declined to return to their jobs.
There is yet more evidence that the added benefits, which replaced more than 100% of wages for the majority of people receiving them, do, in fact, function as a disincentive to work.
- “We are still running at reduced hours at the height of our seasonal busy season. We are having a difficult time finding anyone willing to come off unemployment.” — Shaun Parrish, market owner.1
- “The owners of The Crown Shop, a card and gift retail store in Little Rock, Arkansas, are planning a scaled-back reopening for Monday, but they are struggling with asking their employees to come back to work for less money than they are receiving in unemployment insurance.” — NBC News.
- “[Sean Kennedy, vice president of public affairs for the National Restaurant Association] said restaurant owners are having to decide whether they turn their employees into the Labor Department for rejecting jobs or just turn a blind eye and look elsewhere for workers.” — NBC News.
- “She wants to return to work, but being stuck at home has given her time to reflect. The extra money she receives in unemployment benefits has made her conclude she had been underpaid at her previous job, earning $10.30 an hour after five years.” — Wall Street Journal.
This isn’t about questioning anyone’s motivation. It’s about rational human behavior.
