Labor Day and the Value of Work

As we check off another Labor Day, it’s fair to ask if it really is just another Labor Day.

The holiday honoring workers stems from the Industrial Revolution, when working conditions in America’s burgeoning assortment of factories, mills and mines came to be intolerable for those who toiled there. America’s elites, it seemed, valued the work more than the workers.

Nowadays, it appears to be the other way around.

The inherent value of work seems to be in doubt for many of our nation’s elites. The dignity of having a job, the pride of using one’s skills to earn a livelihood, the satisfaction of enjoying the fruit of one’s labors – all these are threatened by policies enacted in the name of compassion.

Extra unemployment benefits in place for more than a year were set to expire after Labor Day, in the two dozen states that hadn’t already ended them. Although a case could be made that they served a purpose early in the pandemic, when employers involuntarily closed their doors under government orders, those days are long since over.

Inflation is our sign that too much money was chasing too little production – that is, the result of work – for too long.

There are many reasons the long-held belief that rising inflation is a trade-off for rising employment doesn’t always hold water. Government “stimulus” spending on the scale we’ve seen during the pandemic is one of them: It has led to higher inflation because it has tamped down employment without reducing demand for goods and services.

Add the effects of an extended eviction moratorium and the new monthly pre-payments of a larger federal child tax credit, and there are a variety of reasons many Americans have been making a rational decision to stay out of the work force.

Unfortunately, this is the direction in which some policymakers want to take us permanently.

The most commonly discussed form of such a permanent stimulus is the universal basic income, sometimes called a guaranteed income. The idea is for the government to send everyone a check each month for a certain amount of money.

One flaw in the concept becomes a bit clearer if we restate the previous sentence: The idea is for taxpayers to send everyone a check each month for a certain amount of money.

Government, after all, has no money of its own; the money it spends comes from taxpayers, present or future (in the case of borrowed funds). Under a universal basic income, they would be taking money from one pocket to put it in another. You see, Congress can’t very well raise the funds for checks of, say, $1,000 per person per month, which would run to almost $4 trillion per year, simply by taxing “the rich” or corporations or any other narrowly defined group. The money would have to come, as it always does, from the middle class.

Borrowing the money to send checks to every American every month would likely turbocharge inflation. Financing it along the way, by raising taxes on everyone, would make the exercise pointless.

But another flaw comes from this somewhat smaller-scale experiment that’s been playing out for almost 18 months.

We have been giving money to people, particularly in the case of extended unemployment benefits, explicitly because they were not working. The structure of our entire welfare system is predicated on the idea that recipients aren’t working full time; if they were, they wouldn’t qualify for many benefits in many cases, and there is evidence that people work less in order to maintain their benefits. Again, it’s a rational decision.

Crucially, then, we have conditioned people to associate benefits of various kinds with either not working or, in the case of emergency-related stimulus checks, some kind of crisis. In doing so, we have undermined messages about the value of everyday work.

That’s too bad, because the surest way to individual and family prosperity remains a good job. Labor Day is a good time to remember that.

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