Starvation wages vs. enhanced unemployment

Published 5:25 pm Tuesday, July 6, 2021

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To the Editor:

I sometimes chuckle when I hear national news stories about how the $300 enhanced federal unemployment bonus, part of the American Rescue Plan, may be causing a labor shortage throughout the country. Such assertion is a bunch of poppycock.

Talking heads are seemingly disingenuous when they refuse to provide the proper context about why many businesses struggle to replace workers impacted by COVID-19. Simply put, if a person could make more money sitting home than he can at a job where he would receive starvation wages, he is likely to remain at home.

As of this writing, MSNBC and CNN have reported that Indiana is among 26 states that chose to stop the $300 benefits. A few of those states, including Arizona, Montana, New Hampshire, and Oklahoma, offer financial incentives for those who return to work.

On June 25, Indiana Superior Court Judge John Hanley ruled that Governor Eric Holcomb’s decision to reject the $300 federal benefit violated state law and caused the plaintiffs “irreparable harm” by eliminating the recipients’ ability to pay rent, basic medical expenses, and childcare. About 230,000 unemployed workers in Indiana were affected by the aforesaid change.

Although mostly Republican governors have claimed that the enhanced unemployment monies prevent workers from returning to the job market, recent studies suggest that job searches have not increased in the states where the benefits have already ended. Interestingly, President Biden has stated that states may make their own decisions about the enhanced benefit and that the federal government cannot intervene.

Of course, progressive Senator Bernie Sanders disagrees with the rationale. Sanders often decries starvation/poverty wages where recipients too often choose between heating and eating. In a May 13th letter, Sanders urged the federal government to continue providing pandemic unemployment assistance to workers.

Over the last 20 years, I have written pieces to various print media outlets, criticizing employers who offer starvation wages to their employees. Therefore, unions are very much a necessity, especially in the South, which traditionally has been unfriendly territory for union organizers. I recall the problems that Civil Rights icon Reverend Jesse Jackson encountered when he advocated for a union at a poultry processing plant in Eastern North Carolina.

Many noteworthy economists believe that the employer-employee relationship should be reciprocal in meaningful ways. Providing high wages with good benefits will lead to higher productivity. Moreover, absenteeism and tardiness would be reduced substantially. Additionally, employers should explore appreciable ways to make their employees happy, like helping with childcare and travel expenses. After all, business leaders claim they want to maximize profits and minimize costs.

Finally, jobless workers now can bargain from a position of strength. Businesses must wake up and smell the proverbial coffee and be part of the solution rather than part of the problem. As concerned citizens, we have a moral obligation to work to make poverty wages a relic of the dark ages of history.

Remember, the honorable President John F. Kennedy was spot on when he, on a cold Inaugural Day on January 20, 1961, vociferously proclaimed, “If a free society cannot help the many who are poor, it cannot save the few who are rich.”

Keith W. Cooper