> Give people money during pandemic, people feel less pressure to work. Less people who want to work, wages rise to attract more people.
I feel that depicting the current scenario as a sudden global reluctance to work because people are getting benefits is a gross misrepresentation of the facts, and one which is rooted in the old moralist notion that poverty is tied to laziness.
The truth of the matter is that the year-long lockdown enabled workers to reconsider their life priorities and their professional choices, and those stuck in awful jobs with awful working conditions decided to reconsider their options.
To illustrate the fact that "giving people money" is not the key factor here, keep in mind that priviledges workers, such as handsomely paid software engineers working for FAANGs, started quitting in droves due to working conditions, and right now we are seeing these same FAANGs scrambling to contain this hemorrhaging. FAANG-caliber engineers don't just quit their job because the government started passing on handouts.
The service sector imposes exceptionally abusive and poorly-paid working conditions, thus no wonder they are having problems attracting workers without doing any soul-searching and addressing their problems.
Giving money to both corporations and to individuals destroys the motivation of both to do better. When corporations go bankrupt, it seems like a sad event, but in reality it is clearing market room for new entries to be able to start up and take share. Instead of allowing corporations to go bankrupt in the 2007 market crash and in the 2020 market crash, we have given them massive government handouts. This shuts down entrepreneurs and make sure that walking dead corporations keep going with their terrible practices.
The same thing happens when you give individuals handouts, whether those handouts be in the form of pandemic aid, welfare, or social security. They're less motivated to work and often just don't.
Get out of here with that rational nonsense! The government will fix all the problems by doing the same thing that caused them.
Sorry, couldnt help myself. Completely agree. The motivation to participate in most markets has been sapped by handouts on a massive scale. No business is too big to fail. If a business fails it is their own fault. Allowing businesses to fail regardless of the economic impact is a necessity for the economy to function. One business fails and a handful jump in to compete for the open space.
Get out of here with that rational nonsense! The market will fix all the problems by doing the same thing that caused them.
Sorry, couldn't help myself. Completely disagree. The free market continually makes bad decisions. And the term "free market" never meant an un-fettered market free of government influence and control.
> "free market" never meant an un-fettered market free of government influence and control.
What could it even mean then?
You could maybe make a case that people don't mean a totally free market when arguing using the term, but that's about the degree of freedom. Free market literally means people trading goods and services without coercion.
Free market originated as a term with Adam Smith in regards to free of rents and privileges.
"For classical economists such as Adam Smith, the term free market does not necessarily refer to a market free from government interference, but rather free from all forms of economic privilege, monopolies and artificial scarcities.[1] This implies that economic rents, i.e. profits generated from a lack of perfect competition, must be reduced or eliminated as much as possible through free competition."
Naturally, the term has taken on differing meanings, some useful, some not. The idea itself, of a market free from government influence and control is a pipe dream that has never, and will never exist.
To you it means trade without coercion. To others it means less taxes (a type of coercion). To yet others it means no regulations (yet another type of coercion). This just doesn't exist in any economy. Taxes, regulation, permits, all are a form of economic coercion. It's just used as a cudgel by those who stand to gain or lose the most with a particular regulation or tax policy.
> Giving money to both corporations and to individuals destroys the motivation of both to do better.
No, it really doesn't. At most, this represents a one-time-only bump in disposable income, which you either spend to meet your immediate needs, save it up, or blowin up on whatever tickles your fancy.
A one-time bump in disposable income does not change anyone's drive, determination, or professionalism.
If that assertion had any bearing on reality, all companies which hand out hiring bonuses to new hires or pay any sort of bonus would be seeing determined workers turning into slackers overnight, which makes absolutely no sense at all.
>They're less motivated to work and often just don't.
This is most impactful if you think money is the sole motivation for working. The fact that the U.S. has the highest volunteer/charity rate while one of the highest average work week rates for industrial countries seems to indicate otherwise.
What are the options for minimum/lower wage workers? They still need money for food and shelter.
The ability for low wage workers to decide "this job is not worth it" was only made possible by the increased government unemployment benefit and stimulus.
I absolutely believe that if given the choice of getting over $1200/month on unemployment versus making the same but working, most people would choose not working. That seems so intuitive to me.
>I absolutely believe that if given the choice of getting over $1200/month on unemployment versus making the same but working, most people would choose not working. That seems so intuitive to me.
This seems to be a rational choice to me as well if you define work as "shit I don't want to be doing". If you were paid $1200 a week for playing with puppies, you probably wouldn't mind going back.
I think what the OP was alluding to was that it caused people to evaluate the nature of work. I'm not saying it's a purely rational decision, but probably a largely emotional one. When your norm is working a miserable job and you are given a reprieve from it, emotionally it may be that much harder to return.
I think it's less about "reconsidering life priorities" as it's simply breathing room. If you have $0 in the bank and are hustling 3 minimum-wage jobs to feed your kids, it's financially extremely difficult to break the cycle, unless there's a windfall like a stimulus check.
I feel that depicting the current scenario as a sudden global reluctance to work because people are getting benefits is a gross misrepresentation of the facts, and one which is rooted in the old moralist notion that poverty is tied to laziness.
The truth of the matter is that the year-long lockdown enabled workers to reconsider their life priorities and their professional choices, and those stuck in awful jobs with awful working conditions decided to reconsider their options.
To illustrate the fact that "giving people money" is not the key factor here, keep in mind that priviledges workers, such as handsomely paid software engineers working for FAANGs, started quitting in droves due to working conditions, and right now we are seeing these same FAANGs scrambling to contain this hemorrhaging. FAANG-caliber engineers don't just quit their job because the government started passing on handouts.
The service sector imposes exceptionally abusive and poorly-paid working conditions, thus no wonder they are having problems attracting workers without doing any soul-searching and addressing their problems.