Hard work has always defined our nation, fueling our rise as a global economic superpower. The American workforce used to be synonymous with American greatness.
But our workforce was devasted in 2020, when even the casual observer came to understand that the federal government couldn’t pay people to stay idle and out of work forever.
So why are Democrats in Congress so eager to repeat the one of the most glaring pandemic-era policy blunders?
With a breathtaking disregard for lessons learned, Senators John Fetterman (D-Penn.), Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), and others are seeking to expand state-run unemployment insurance programs, transitioning them into something more closely resembling a federally mandated universal basic income scheme than an emergency safety net program.
Their new plan would replace up to 100% of workers’ wages for more than a year. That’s not insurance — that’s a new entitlement paid for by the employers taxed to fund the program.
Senate Bill 3140, the Unemployment Insurance Modernization and Recession Readiness Act, could be forgiven as merely naïve if it hadn’t arrived so soon after pandemic policies cost taxpayers billions of dollars and encouraged millions of able-bodied Americans to exit the workforce even as employers struggled to find workers.
With the COVID experience so recent, the senators’ plan is a deliberate attempt to sabotage the moral and economic dignity afforded by a job. It represents a final neutralizing of the once-great American work ethic and, with it, the civic virtues of independence, individual responsibility, and self-government.
It’s clear that big-government types like Sanders and Warren find work antithetical to their aims of cradle-to-grave dependency. They’ve been trying to mainstream socialism for decades. Now they’ve turned their sights on the worker safety net program as a vehicle to destroy work itself.
Unemployment insurance has always been about providing limited, temporary assistance to workers who lose a job through no fault of their own. Funded by employer taxes, the largely state-run program has served as a rapid on-ramp to the workforce, ensuring the unemployed have some immediate support as they look for their next job.
The arrangement has worked well, allowing states to devise innovations that result in higher rates of re-employment, shorter periods of unemployment, and lower taxes on employers. But all of that would change under this new proposal.
In place of state innovation would come federal standardization — and not in a good way, either.
In 2020, Democrats pushed successfully for an expansion of unemployment benefits as part of federal pandemic relief spending. Stopping just short of a federal takeover of the unemployment program, Congress increased weekly benefit levels up to $600 per week above existing limits, expanded benefits to individuals whose employers (if they had one) did not pay into the program, and paid benefits for more than a year and a half.
The results were disastrous.
Billions of additional dollars flooding the system became a magnet for fraudsters. The Department of Labor’s inspector general estimates at least $35 billion in unemployment benefits was lost to fraud. State programs took a hit as well, losing more than $12 billion to fraudulent and ineligible claims.
Perhaps worst of all, the fact that an unemployment claimant could replace most — if not all — of his income by remaining unemployed slowed the pace of the post-pandemic recovery. While tens of millions of hardworking Americans returned to work as quickly as possible, millions of others stayed on unemployment. It wasn’t until a year after the federal benefit expansion ended that U.S. employment returned to its pre-pandemic level.
So what do Democrats want to do now? Their new bill would force states to pay unemployment claims for up to six months and make an additional federally funded year of benefits available after that. Those benefits would be expensive, replacing 75% of a worker’s salary at minimum. But under certain circumstances, a worker could receive up to 100% of his former wages.
And, naturally, labor unions and nongovernmental organizations are thrilled at the prospect of compelling employers to pay striking workers — an idea so ludicrous that even California Governor Gavin Newsom vetoed a similar proposal in the Golden State.
Substituting government dependency for the dignity and upward mobility work provides is not a formula for American prosperity and success. For American greatness to endure, let’s hope Congress never takes this plan seriously.