An economist at the University of Chicago recently wrote an op-ed in The Wall Street Journal that warns about the effects of President Joe Biden’s stimulus plan.
“We estimate that between five million and eight million fewer Americans will be employed over the next six months if the bill passes,” UChicago economist Casey Mulligan wrote in his opinion piece along with Stephen Moore, a former adviser to President Donald Trump.
Mulligan also advised President Trump.
The stimulus plan’s increased payments for not working could lead to people leaving the workforce or not returning.
Mulligan and Moore said:
The Biden plan is welfare reform in reverse. It would repeal many of the successful work requirements dating to the Clinton era, and it contains only minimal requirements in exchange for its cash payments and other benefits.
The pair said that many families would make more on welfare than they would by working.
Mulligan and Moore said:
In Kansas, a family of four with two unemployed adults who had earned U.S. median wages could get paid, including the Biden add-on package, the after-tax equivalent of more than $135,000 on an annual basis without working an hour. In Massachusetts, where state unemployment benefits are the highest in the nation, the figure is $170,000. This doesn’t include any housing or rental assistance the family may also receive. The Biden package of benefits would exceed the wages and salaries of at least 85% of households.
The economists have data to support their predictions. “We predicted on these pages that when the original Cares Act passed in early 2020, the added benefit would reduce employment by millions when jobs came back,” the op-ed said. “Labor Department statistics verified that millions of jobs went unfilled last summer even as unemployment was historically high.”
“The combination of benefits are likely to reduce employment by five million to seven million jobs,” the pair wrote. “The $15 minimum wage, if it stays in the bill, would bring the total to more than eight million.”
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