Reemployment is walking; worker safety is chewing gum. We have to do both.

By: Brent Orrell, American Enterprise institute

As we approach the two-month mark of our country’s pandemic response, many local and state economies are beginning to see daylight, even if the majority are operating at only a quarter or half capacity. While medical experts caution a slow, non-linear reboot (at best), a combination of public fatigue with isolation and increasing concern about the economic damage the lockdowns is leading to a gradual state-by-state and sometimes county-by-county reopening.

The unemployment figures are gut-wrenching. Thirty-three million people have filed for unemployment since the pandemic began. However, according to the latest responses from the Strada Education Network survey, about a third of respondents (35 percent) who have lost their job have started a new one in the past month. This is relatively consistent across various education levels: high school or less (29 percent), some college but no degree (26 percent), associate degree or vocational/technical (28 percent), and bachelor’s degree (30 percent). Notably, among those with a graduate or professional degree, 51 percent started a new job.

That one-third of those who have been laid off due to the pandemic have found other work suggests that, for many, the draw of employment still out-weighs the $600 Federal Pandemic Unemployment Compensation (FPUC) bonus that was implemented to encourage workers to stay home as the pandemic ramped up. Work does more than provide income; it connects us to other people and provides a sense of purpose and meaning. These intrinsic human needs are and will continue to be a strong motivation to work. That those with graduate and professional degrees are taking new jobs at nearly twice the rate of those with less education is probably explained by the capacity of such workers to take jobs that can largely or wholly be done from the relative safety of home.

The perceived and actual safety of workplaces points to the most difficult labor market-pandemic challenge still in front of us. Many are suggesting that the FPUC bonus is mainly to blame for the lack of interest and willingness of lower-wage workers to accept available jobs. This view focuses too much on economic incentives and not enough on the “fear factor” created by COVID-19. Workers need to know that government and employers take health concerns seriously and are working hard on mitigation. Last week, I outlined a rough consensus on how businesses should safely reopen to protect workers and customers. Based on recommendations from health organizations and government agencies, these proposals include practicing respiratory hygiene (masks, cough-covering), frequent handwashing, and engineering controls to improve air flow in offices and businesses. Without these measures widely in place, it will be difficult to rebuild confidence and persuade workers (or customers) to reenter the economy.

It is certainly true that the (intended) negative work incentive created by the FPUC bonus will have to be addressed in the future. But the economic disincentive is only part of the equation. Work incentives and public health solutions have to work together before we can fully restore the magnificent prosperity machine of the American economy.

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