If you hear Democrat Gov. John Bel Edwards Administration figures crowing about record-low unemployment, it’s to hide the fact that his policies also have helped to create near record-high working-age able-bodied adult idleness.
This month, the state continued a streak of declining unemployment rates, at 3.3 percent in November. Tellingly, however, is that this didn’t approach the most Louisianans ever in jobs, even as the state has its highest population ever.
That’s because the workforce participation rate stayed at its lowest level in 45 years (absent the Wuhan coronavirus pandemic-influenced low of a couple of years ago). Only 58.3 percent of working-age able-bodied adults in the state work, well below the national average which itself remains near historic lows.
In other words, having disproportionately fewer eligible people seeking to work artificially inflates the proportion of Louisianans successfully finding work. This creates a misleading indicator of the health of the state’s economy.
And part of the reason why relatively fewer able adult Louisianans want to work stems from policies discouraging work sponsored by Edwards, a recent study of national factors points out. The study shows that one factor contributing to the dearth of workers is the generous benefits paid to families without workers, in the form of Affordable Care Act subsidization and unemployment benefits.
The pandemic response saw massive amounts of debt-fueled spending, pounded into policy by Washington Democrats, poured into states paying for keeping people on Medicaid expansion who otherwise wouldn’t have qualified, higher subsidy totals and at higher levels of income for those above the higher cutoff level to obtain private insurance, and boosts to unemployment benefits. Edwards dragged the state into expansion in 2016 and worked a deal with the Republican-led Legislature that foolishly hiked benefit payments in exchange for eschewing ending extra federal unemployment dollars a few weeks early.
The study notes these elements create disincentives to work. Using just one potential example, of a two-parent family of four, the typical Louisiana family of this kind receives in benefits from just these two sources – assumed maximal unemployment benefits and half eligible ACA subsidies – over $44,000, or the equivalent of both parents working at $11 a hour.
Note how the pair of breaks can interact. Since in Louisiana unemployment insurance lasts 26 weeks, one can work for half a year, then the other the other half, and switch back. And by deliberately working less, they can qualify the whole family for expanded Medicaid or the subsidies. (These strategies happen; I personally know of such instances.)
Additionally, this doesn’t include the myriad of welfare programs available that also discourage work. Another study nearly a decade ago observed that among several different anti-poverty programs, some of which are determined by state policies including Medicaid, then for a single-parent family of three provided over $22,000 annually, or $10.70 an hour. Medicaid expansion since will have boosted that figure, although to a lesser extent that feeds into the calculations of the more recent study.
Actually, Louisiana is rather fortunate in that these disincentives are lower than in most states. Still, that two-parent family amount in Louisiana is higher than the median salary of a retail associate or firefighter, not including any other benefits program.
Of course, many lower-income households give such considerations short shrift in their decisions to work, but the inescapable fact is that some don’t and so such state-level policies as expanding Medicaid and increasing unemployment benefits serve to increase idleness. Keep that in mind the next time officials who supported such things brag about the state’s unemployment rate while remaining quiet about its workforce participation rate.
No comments:
Post a Comment