Labor Day is meant to honor the contribution of the working class to the American economy
This is a column by Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation, with a libertarian lean.
As we tick off another Labor Day, it’s fair to wonder if this really is another Labor Day.
The holiday honoring workers stems from the Industrial Revolution, when working conditions in America’s burgeoning assortment of factories, factories and mines became intolerable to those who worked there. The American elites, it seemed, valued work more than workers.
Today, it seems to be the other way around.
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The inherent value of work seems to be in doubt for many of our country’s elites. The dignity of having a job, the pride in using one’s skills to earn a living, the satisfaction of enjoying the fruits of one’s labor – all of this is threatened by policies adopted in the name of compassion.
Additional unemployment benefits that had been in place for more than a year were due to expire after Labor Day, in the two dozen states that had yet to end them. While it can be argued that they served a purpose at the start of the pandemic, when employers unwittingly closed their doors on government orders, those days are long gone. Inflation is our sign that too much money was chasing too little production – that is, the result of work – for too long.
There are many reasons why the long held belief that rising inflation is a compromise with rising employment does not always hold water. One of them is government ‘stimulus’ spending on the scale we saw during the pandemic: it led to higher inflation because it held back employment without reducing demand for goods and services.
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Add in the effects of a moratorium on extended evictions and the new monthly advance payments of a larger federal child tax credit, and there are various reasons why many Americans have made a rational decision to stay out of the way. labor market.
Unfortunately, this is the direction in which some political decision-makers want to take us permanently.
The most commonly discussed form of such a permanent stimulus is basic universal income, sometimes referred to as guaranteed income. The idea is that the government sends everyone a check every month for a certain amount of money.
A flaw in the concept becomes a little clearer if we rephrase the previous sentence: the idea is that taxpayers send everyone a check each month for a certain amount of money.
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Government, after all, has no money in itself; the money it spends comes from taxpayers, present or future (in the case of borrowed funds). As part of a universal basic income, they would take money from one pocket and put it in another.
You see, Congress can’t very well raise funds for checks of, say, $ 1,000 per person per month, which would be almost $ 4 trillion a year, just by taxing “the rich” or corporations or any other narrowly defined group. The money should come, as always, from the middle class.
Borrowing money to send checks to every American each month would likely boost inflation. Funding it along the way, by raising everyone’s taxes, would make the exercise unnecessary.
But another flaw comes from this smaller-scale experiment that has been going on for almost 18 months.
We gave money to people, especially in the case of extended unemployment benefits, explicitly because they were not working. The structure of our entire welfare system is based on the idea that recipients do not work full time; if they were, they would not qualify for many benefits in many cases, and there is evidence that people work less to keep their benefits. Again, this is a rational decision.
Crucially, therefore, we have conditioned people to associate various kinds of benefits either with not working or, in the case of emergency stimulus checks, with some kind of crisis. In doing so, we have undermined messages about the value of daily work.
It’s a shame, because the surest path to individual and family prosperity remains good work. Labor Day is a good time to remember that.