What You Need To Know
Work is a vital component of fighting poverty. Americans working full time at least half the year are nearly 4 times less likely to be in poverty than those working part time and Americans overall, according to the Bureau of Labor Statistics.
Public policies should therefore incentivize work, not discourage it. Unfortunately, President Joe Biden in February issued an executive order removing work requirements (including searching for employment) to receive Medicaid.
Policymakers should not use COVID-19 emergency tools to create permanent employment disincentives that distort employment markets, are magnets for fraud and risk triggering inflation. Yet Biden supports ongoing, COVID-related enhanced federal jobless benefits, an extra $300 weekly on top of baseline unemployment payments. As the pandemic subsides, this leaves many businesses, particularly restaurants and hotels, struggling to fill openings. Businesses attribute hiring difficulties to extra unemployment payments, leading half of all states (as of early June) to end enhanced payments prior to their expiration in early September 2021.
Biden has also pushed to raise the minimum wage, including passing an executive order mandating $15 minimum wage for federal contractors. Minimum wage hikes yield job losses and disincentivize hiring, especially among less-educated and lower-skilled people—who need jobs the most.
Biden’s support of expanded federal child tax credits due to COVID may also discourage work, perpetuating government dependency during non-emergencies and rampant fraud.
Rather than punish work or reward unemployment, policymakers should embrace tools that encourage work to increase economic mobility for more Americans without triggering unintended consequences that may stall our overall economic rebound.