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December 12, 2022

Planned Dependency

The more lavish government benefits become, the more people choose not to work for a living.

Where are all the workers? We asked that question more than a year ago as the economy continued to struggle with millions of unfilled jobs while millions of workers sat on the sidelines. Workforce participation in November was at 62.1%, a far cry below the pre-pandemic level of 63.4%. In other words, after more than a year of steady job growth, the overall jobs picture is still more or less the same.

In September, Joe Biden declared that “the pandemic is over.” In October, his administration extended the COVID public health emergency through January 11 and plans another 90-day extension after that. So, the pandemic is not over — at least in terms of the exercise of massive government power.

Biden’s declaration keeps open access to taxpayer-funded schemes for income redistribution that help workers stay on the sidelines, which exacerbates inflation and supply chain issues, as well as stirs continued fears of recession. Millions of job openings mean employers have to pay more to entice prospective employees, which then leads to higher prices, which means wages have to grow. It’s a vicious cycle.

Millions of Americans permanently left the workforce by way of retirement in the last couple of years, though thanks to the stock market’s disastrous performance, many were forced to take jobs once again. Others relied on the flood of pandemic cash both Donald Trump and Joe Biden spearheaded. Personal savings reached a record in early 2021, and some folks figured out a way to change lifestyles and make things work — for a while. Inflation quickly ate up that savings and, as of November, the personal savings rate is the lowest in two decades.

Many Americans found ways to be self-employed, too, and some of those jobs aren’t counted in the employment picture. Other households dropped from two incomes to one. Since the pandemic began, the labor participation rate fell five percentage points for women aged 25-34.

It’s not just women, though, and it didn’t start with the pandemic. “Consider that in 1962, about 97% of men ages 25 to 54 were working or looking for work,” writes analyst Matt Lamb. “Today, that number is closer to 89%.” There’s a growing subculture of shirking work.

Let’s come back around to the extension of lavish government benefits via pandemic emergency declarations. The federal government now spends $9.3 billion every month on food stamps, which is more than double what it was before the pandemic.

Likewise, Medicaid has ballooned. The Families First Coronavirus Response Act of 2020, for example, gave billions in Medicaid and food-stamp funding to states conditional on not restricting rolls to exclude ineligible Americans such as able-bodied, working-age adults. Predictably, Medicaid enrollment swelled to 97 million — nearly one in three Americans — growing by 23 million over two-plus years. Roughly that many don’t meet eligibility requirements, but they can stay enrolled thanks to the pandemic emergency declaration.

There is hope, however. A number of Republican-led states are fighting to undo the pattern of government dependency the Left has exacerbated. Georgia just won a lawsuit against the administration over Medicaid eligibility requirements. Other red states have foregone enhanced food stamps. In large measure as a result of Republican policy choices, most of the job growth around the country since the pandemic shutdowns has been in red states.

If government officials, especially at the state level, enact policies favoring the free market, more Americans will go back to work. The more Americans go back to work, the quicker our supply chain problems will ease and inflation will slow. It’s amazing what humans can accomplish if we work for it.

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