Did Joe Biden’s Massive and Generous Stimulus Make Workers Lazy and Not Return to Full Time Jobs?

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Are the Stimulus Packages Game Changers or Inflationary?

The labor market continues to be tepid, despite the massive and generous stimulus passed by Congress in March. Indeed, the Covid Relief Stimulus Package was said to be the “game changer” as far as the role of the government in the economy was concerned, as the Biden Administration sought to undo decades of limited government that the hallmark of Reagan-ism.

Moreover, another massive infrastructure and spending package is in the works that aims to be another move towards making the United States competitive again by rebuilding its dilapidated bridges and roads as well as to spur employment and target the vulnerable among its citizenry, hit hardest by decades of neoliberal assault on their lives.

So, does all this spending indicate a true empowerment of the “little guy or woman”, or it would not have the intended effect. Already a schism has appeared among Democrat leaning economists with some cautioning against such “largess” and stoking inflation fears. On the other hand, there are those who advocate more spending, if not for anything else, but, to offset the widening wealth gap.

Is the Stimulus Making Workers Lazy and Creating a Moral Hazard?

Coming to the topic statement of this article, there is an argument being put forward, especially by Republicans, that the overly beneficent Unemployment Benefits and the considerable Stimulus Checks are making workers lazy and not return to Full Time employment, content as they are with money in their hands, and hence, living for the moment with it. Moreover, the Republicans are also railing against what they see as an “anomaly” wherein the payouts from such stimulus packages are more than the “minimum wage” and hence, disincentivizing the workers from full time jobs.

One needs to be careful when arguing on either side as both arguments look true and specious at the same time. For instance, it is a known fact that “incentives” can work both ways and just as they “motivate”, they can also lead to “moral hazards” in the same manner in which the bankers who got bailed out in the aftermath of the Great Recession, continued their reckless ways. So, in a way, what we see is a reverse of that wherein the “shoe is now on the workers’ foot”.

What Do the Numbers Reveal About The Reasons for Tepid Jobs Recovery

Having said that, there are some voices that urge us to look for statistical based evidence on why the recovery in jobs has been tepid. For instance, they point to the “uneven” recovery wherein some sectors have opened up fully whereas others continue to face uncertainty owing to multiple factors such as state specific rules, vaccination rates, and the very real aspect of them still climbing out of the abyss that lockdowns forced them into.

Moreover, with schools not reopening fully, many families are continuing to work from home as well as women taking more time off than men and as the numbers show, not returning to the labor force in a hurry. Indeed, combined with the evidence that shows White Collar recovery, what this indicates is that the Blue Collar workforce continues to be hard hit by the Pandemic. Therefore, there is a case to be made for more stimulus rather than meager assistance as the lower income brackets need more help.

Biden’s Transformative Approach Must Be Welcomed

In addition, there is the parallel move to increase the minimum wage, that is making the Republicans howl and barking mad at what they see are further attempts to mollycoddle the working class. However, it is a travesty that the minimum wage has been stagnant for a decade or so, and with the soaring income gaps, there is a moral and ethical case to be made for the same.

So, in a way, we need more stimulus and there is nothing wrong in Joe Biden being a “transformative” President, if such transformation is directed at the working class, that has been neglected for decades by the Republicans and used by Trump with his “spin” that he is for them.


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