Shades of “Shovel Ready”

Joe Sparatta

by James A. Bacon

Unemployment in the United States is the highest it has ever been since the end of the Great Depression. But good luck luring people back to work, at least in the short term. Many people can make more money on unemployment than when they were working.

Joe Sparatta, chef/owner of the Heritage and Southbound restaurants in Richmond, says his line cooks are making $960 a week on unemployment. “None of them want to come back because I can’t pay them that,” he told the Richmond Times-Dispatch. “I don’t blame them.”

The RTD explains:

Unemployment benefits vary based on an individual’s pay while employed, but the typical benefit is on the higher end, which maxes out at $378 a week. Under the CARES Act, the federal government has kicked in an additional $600 a week for workers through July, making the maximum amount available to laid-off workers $978 a week for up to four months.

For many Richmond-area restaurant workers — and workers of all fields — bringing in what amounts to just over $50,000 a year is more money than they’ve ever made.

Paying people not to work is a classic case of government policy making things worse. This moronic measure will go down as the COVID-19 recession’s analogue to “shovel ready projects” in the past recession. Actually, it’s worse.

The shovel-ready projects packed into President Obama’s counter-recessionary stimulus package may have wasted a lot of money on construction projects of marginal value, and a lot of projects may not have kicked in until the recovery was underway, but at least they did put people to work. This particular provision of the CARES Act is paying people not to work, and it’s making it harder for small businesses to reopen their businesses.

The measure does expire after a couple of months, and there’s no assurance that Sparatta could get his restaurant up and running even if he could re-hire his chefs, but making it financially worthwhile for people not to work is clinically insane. This ikind of idiocy what you get when lawmakers try to fix a problem by throwing money at it.

The United States has have achieved a new level of government recklessness. Instead of squandering hundreds of billions of dollars to fight a recession, as we did in the last recession, we’re now misallocating trillions of dollars. There’s a lot of ruin in a nation, as Adam Smith famously said of the United Kingdom. Let’s hope there’s a lot of ruin in the United States as well. With a ruling class like the one we’ve got, we’re going to need it.