Shoot-Yourself-in-the-Foot Economics

Virginia unemployment rate over past three years. Source:

A sure sign of dysfunctional government policy: Thousands of Virginians remain unemployed, but small businesses are struggling to find employees. We’re not talking about highly specialized jobs like aerospace engineers or data analysts that require years of education. We’re talking about ordinary jobs.

“Virginia’s small businesses are working hard on their recovery but are struggling to find the right workers to fill open positions,” NFIB Virginia State Director Nicole Riley said in a Wednesday press release, as reported by The Virginia Star. “It is important that Virginia lawmakers keep small businesses a priority and focus on policies that will strengthen job growth and not hinder the small business recovery.”

“Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force,” said NFIB Chief Economist Bill Dunkelberg. “However, owners remain determined to hire workers and grow their business.”

Here in Virginia the unemployment rate is 5.2%, one or two percent higher than what economists consider “full” employment.

The economy is reviving on its own as the COVID epidemic recedes. On top of that the Biden administration has injected $2 trillion in stimulus spending. Businesses want to hire millions of employees nationally, but federal policy is encouraging workers to stay put in order to collect super-generous unemployment benefits.

In my lifetime, I’ve seen supply-side economics, trickle-down economics, and Trumponomics. I call this shoot-yourself-in-the-foot economics.