Vaccine and Mask Resistance = Another Slam to the Economy

 

It fascinates me when red states believe that by eliminating mask mandates and preventing employers from requiring vaccinations or constant testing from their employees, the economy will simply reopen and return to normal. They also believe that unemployment benefits under various pandemic relief bills were so generous that people simply preferred to take those weekly payments in lieu of getting back to work. So, by letting people think that the era of COVID prevention was over, even as the Delta variant exploded among unvaccinated workers, the underlying assumption was that people would simply pick up where they left off when the pandemic hit. But that’s not what happened.

Instead, the more red state governors banned mask and vaccine mandates, the more serious Delta infection and mortality rates soared. The more scared workers became, many avoiding returning to work accordingly. Particularly in red states, hospital capacity, particularly the needed ICU beds, reached saturation point where new patients simply had to be turned away. Unlike the earlier Alpha COVID virus, Delta takes down children in droves. As of this writing, a quarter of a million children have been infected with the Delta virus, some very seriously, some even dying. With children under 12 not even eligible for any vaccine, too many schools became Delta incubation/ transmission venues. As of this writing, over 1,000 schools closed at least temporarily because infection rates were rising so fast. 

The employment picture, and hence the overall economy, also hit the skids. As many jobs still went begging, the rapidly rising number of new jobs suddenly plummeted. The Bureau of Labor Statistics reported a serious slowdown in August, when jobs increased by an unexpectedly meager 235,000, well below the monthly recovery average of 586,000 this year. Red states were particularly hard hit. All this happened just as federal pandemic-driven jobless benefits ended on September 6th impacting 9 million workers. The “one true thing” was that COVID was surging again. We had entered a new “pandemic of the unvaccinated.”

Were America workers lazy, as many Republican elected officials claimed, or was there a whole lot more? Michael Hiltzik, writing for the September 8th Los Angeles Times, examined the employment landscape in this scary new world. The variables are many; it’s complicated: “To begin with, all unemployed people are not alike. Millions of workers have returned to steady jobs, but huge pockets of unemployment remain, due in part to low pay and circumstances that can keep people out of the labor market even if they want to return.

“Employers and some politicians have portrayed the continued unemployment in sectors that have high demand for workers thanks to signs of a post-pandemic recovery — such as retailing and leisure and hospitality — as the product of worker laziness and excessive unemployment benefits. But they often fail to confront the truth that their jobs simply aren’t alluring.

“Marriott, the world’s largest hotel company, says it’s struggling to fill 10,000 job openings at its 600 U.S. hotels. But its CEO, Tony Capuano, acknowledged in an interview with the Financial Times that his industry’s reputation for low-paid, dead-end jobs had hampered recruiting…

“The narrative that good jobs are available for the asking also overlooks all the residual reasons that millions of workers can’t return… ‘We don’t have a work ethic problem, but a care infrastructure and healthcare risk problem,’ says Rebecca Dixon, executive director of the National Employment Law Project… ‘Many child-care centers closed and haven’t reopened, so there’s not affordable, accessible child care, and we have folks with complex medical needs,’ Dixon says. ‘If your children are under 12, they can’t be vaccinated. If you have an immunosuppressed person in your household, you’re worried about bringing COVID home.’

What had happened even before the pandemic, was a slow erosion of average worker buying power with a concomitant mega-increase in corporate earnings. “Federal statistics show that, from 1994 through 2020, after-tax corporate profits increased nearly sevenfold, but labor’s share of the nonfarm economy fell by nearly 5%.” Hiltzik.  Also, if you somehow missed it, perhaps you have not noticed the skyrocketing cost of housing, with many facing huge bills for back rent as eviction moratoria end. Food prices have risen disproportionately, recently joined by staggering increases at the pump as hurricane damage and seasonal travel wreaked havoc on American wallets. Still the notion of the lazy American worker persists in GOP mythology:

“Nevertheless, the notion prompted 26 states, almost all red states, to end the federal $300 weekly benefit early, starting in June. That included 21 states that also canceled benefits to otherwise ineligible workers, including gig workers and the self-employed. The rationale in all cases was that the benefits were prompting workers to stay home instead of taking advantage of a recovering job market.

“Economists searched assiduously for evidence of such an effect and for the most part came up empty. In fact, early surveys, including one by Peter Ganong of the University of Chicago, indicated that job growth was somewhat more robust in states that maintained the federal benefits than in states that cut them off.

“Cutting off unemployment benefits early may even have resulted in GOP governors’ harming their own economies — a telling example of how ideology can be trumped by hard reality… That’s according to a study by economists at Columbia, Harvard, the University of Massachusetts and the University of Toronto, who estimated that the early withdrawal of benefits resulted in a $4-billion reduction in federal dollars flowing to the withdrawal states, but only $270 million in increased earnings… That caused a $2-billion reduction in consumer spending in those states, resulting in turn to what may have been ‘increased layoffs or reduced hiring,’ the economists conjectured.” Hiltzik When decisions are based on doctrinaire mythology and warped “logic” to justify a severely polarized economic system tilted heavy in favor of rich special interests, you get… exactly what we have today.

I’m Peter Dekom, and at some point, in the not too distant future, I hope that we embrace facts and deal with the profoundly dysfunctional world we have created by relying on self-indulgent mythology.