“Most Americans who enter independent work arrangements do so because they prefer them to the more structured and controlled world of traditional employment, not because they have no other choice. A 2021 Upwork survey found that more than 70 percent of both full‐time and part‐time independent workers see increased flexibility as the major reason for engaging in independent work. A separate 2021 survey from MBO Partners showed that nearly 90 percent of respondents were happier in independent work than in traditional jobs. It also found that roughly three‐quarters of independent workers are satisfied with their work, intend to remain in independent work, and are optimistic about their career future. Just 11 percent wanted to find full‐time traditional employment.
This preference extends to oft‐maligned gig work. According to a 2021 Pew Research Center survey, for example, almost 80 percent of gig platform workers rated their experiences positively, with almost half citing schedule flexibility as a major reason for doing the work. Only 28 percent of respondents said they performed gig work because there were few other job opportunities available where they live. And in 2019, when economist M. Keith Chen and his colleagues did a study of more than a million U.S. Uber drivers over an eight‐month period, they found that drivers valued the flexibility the arrangement provided—in both the timing and amount of work—at $150 per week (or 40 percent of expected earnings). Chen’s team also learned that drivers would need a 50 percent raise to work for a less flexible taxi company.”
“Hey, remember the pandemic economy? How could you not, right? In early 2020, millions of people lost their jobs in the blink of an eye, through no fault of their own. In the United States, their subsequent attempts to get help from the government overwhelmed unemployment offices across the country, revealing the system to be fundamentally broken. The infrastructure was bad, the benefits insufficient, and the entire scheme next to impossible to navigate.
And then, something remarkable happened: The federal government stepped in to shore things up. It added extra dollars to state unemployment benefits to make sure people could get by and pay their bills. It expanded the pool of people who were eligible for benefits, so workers such as freelancers and contractors could access them, too. While far from perfect, the extra efforts to help the unemployed made a real difference in people’s lives and played a part in the country averting a deeper and longer recession.
It felt, for a while, like maybe there would be momentum to finally address the issues in America’s unemployment system. So many people had experienced first-hand just what a disaster it was on a massive scale, from outdated administrative systems to inadequate benefits. It seemed obvious that this hybrid state-federal program that had left so much discretion up to individual states just didn’t work.
And then … America’s UI setup didn’t really get fixed, because it never does.”
…
“As workers stare down the barrel of another potential recession — and the layoffs that would accompany it — the problems that dogged unemployment insurance before the pandemic, many of which have persisted for decades, remain. Most of the momentum to repair the system has dissipated.
Congress and the White House allocated $2 billion to the Department of Labor in 2021 to try to help states update their unemployment systems, combat fraud, and promote equitable access to benefits. But that funding and the accompanying efforts can only go so far, and they are aimed at administrative fixes, not policy fixes. The benefit amount a worker is entitled to, how long the benefits last, and the requirements to get them largely depend on which state that worker lives in. Many states are still digging themselves out from under the last crisis. Given the narrative that has taken hold around unemployment during this most recent economic recovery — that UI kept people out of the workforce, that too much government assistance contributed to inflation — it’s not clear what kind of appetite would exist in Congress to help workers if and when another recession hits.”
…
“The point of unemployment insurance is to replace income for people who have lost their jobs and keep them attached to the labor market. It’s meant to be a support for the broader economy in times of economic downturn, too, and keep consumer spending going. If I lose my job and can’t pay my rent, it is a problem for me and for my landlord and for the sandwich guy I no longer buy from down the street.”
…
“UI is financed through state and federal payroll taxes that are supposed to cover both administrative systems and the benefits themselves. Many states have kept those taxes quite low, leaving the system chronically underfunded and resulting in luck-of-the-draw situations for workers applying for UI, depending on where they live.
The average weekly benefit paid out in regular unemployment insurance nationwide was about $385 in the 12 months ending in September. But if you look at Mississippi, for example, the average benefit is in the low $200 range, while it’s now above $600 for Washington state.
These benefits do not move with inflation, either.”
…
“Many UI offices are understaffed, are still dealing with pandemic-era backlogs, and are using outdated technologies to administer benefits. Or, they’ve updated their technologies and they’re intentionally designed to make the whole thing harder for workers to navigate, or the update was just bad.”
“labor force participation remains stubbornly low, with only 62.3 percent of the civilian population working or actively looking for work—well below pre-pandemic levels. And even before the pandemic, that figure had been steadily declining for years.”
…
“the largest component of the most recent reduction appears to be older people who took retirement early and/or previous retirees who have not rejoined the work force at the rates they once did. This trend may well reverse itself if the stock market continues to decline and retirement accounts evaporate, but for now it looks like baby boomers turning on, tuning in, and dropping out—however belatedly—are at least as much of a labor force problem as wayward youths.”
…
“”The process of contracting a worker is often close to ultimatum bargaining,” explained Elwyn Davies (then with the University of Oxford) and Stanford University’s Marcel Fafchamps in a 2016 paper exploring the effects of competition on behavior within the ultimatum game. “The employer specifies a job description and proposes a wage and the worker accepts or rejects.
So if employment is an ultimatum game—where playing along might get workers less than employers, but refusing to play gets everyone zero—what is causing the perception that the terms of employment are no longer worth accepting, even when both parties would benefit?
Positive views of capitalism more generally have slipped since 2019, with 39 percent expressing negative views in an August Gallup poll. Another Gallup poll found an uptick of 3 percentage points in people who say they are “completely dissatisfied” with their jobs, while the number of people who were “completely satisfied” fell 8 points.
The perception that conventional jobs are essentially offering workers a pittance while greedily holding back the bulk of the wealth is common in places like the r/antiwork subreddit, which has 2.3 million members. In fact, there’s at least one discussion of the ultimatum game itself on that subreddit, which pulls some figures on companies’ revenue vs. worker compensation and concludes: “If working for Apple was the ultimatum game, the proposer just got $100. They’re offering you 23 [cents], and they keep $99.77. Deal or no deal?” The relative sizes of these numbers might also explain why simply raising wages hasn’t brought people into the workforce, especially when paired with increased awareness of and dissatisfaction with the gap between CEO pay and worker pay in large corporations.”
…
“Right now there’s something broken in our economy that is preventing employers and employees from cooperating with each other. The result is that too few deals are being struck and everyone is suffering. The challenge ahead is how to rebuild a sense that the game is fair and everyone is playing in good faith.”
“The $1 trillion infrastructure law passed last year expanded Buy America rules, which require state and local agencies to buy certain materials made in the United States for federally funded infrastructure projects. Rules that iron, steel, and manufactured products be made in America have been in place for decades, but they’ve traditionally applied to transportation and water-related projects, such as highways, rail, and public transit.
The Infrastructure Investment and Jobs Act’s new rules broadened the scope of goods that have to be produced in the United States by creating a new category for “construction materials.” It also expanded the types of infrastructure projects subject to the requirements to permanently include housing, broadband, and new programs for electric vehicle charging projects for the first time.”
…
“many state and local officials across the country say the new rules could delay much-needed infrastructure projects and significantly drive up costs amid the fastest inflation in 40 years. Some say they’re already struggling to deal with supply-chain disruptions that have emerged during the pandemic and worry that material shortages could worsen if they’re limited to domestic manufacturers. Higher costs could also lead to fewer projects and soften the impact of the package”
“Consider that supposedly worker-centric trade policy. Biden has left in place many of the tariffs imposed by President Donald Trump, including the levies on aluminum and steel. By artificially hiking the price of imported steel, those tariffs are supposed to boost domestic production, creating more and better-paying steelworker jobs. But the cost of the tariffs rebounds onto every industry that uses steel to make other products. While about 57,000 Americans work in steelmaking jobs, more than 12 million are employed in manufacturing jobs that use steel. The tariffs hurt those workers.
Even steelworkers suffer from the tariffs, which raise prices for cars, appliances, and a host of other products. The Peterson Institute for International Economics, a trade policy think tank, estimates that repealing those tariffs would put about $800 back in the average family’s pockets this year.
Biden also has decided to extend tariffs on solar panels and their component parts, which were due to expire this year. In theory, those tariffs promote domestic manufacturing. In reality, they have cost more than 62,000 jobs in the four-plus years since Trump first implemented them by sharply cutting the number of solar panels available for installation and service, according to the Solar Energy Industries Association.”
…
“Trade and labor policies should not be worker-centric or consumer-centric. They should be market-centric, because trade and labor are both parts of a market system that benefits Americans as workers and consumers.”
“”The U.S. currently does not produce enough doctorates and master’s degrees in the science, technology, engineering and math fields who can go on to work in U.S.-based microchip plants,” write Brendan Bordelon and Eleanor Mueller for Politico. “The U.S. now produces fewer native-born recipients of advanced STEM degrees than most of its international rivals.”
According to a report from Eightfold AI, which runs a work force artificial intelligence platform,* the U.S. would need to fill between 70,000 and 90,000 fabrication jobs in order to have the numbers necessary for critical applications. And chipmakers are already struggling due to the insufficient availability of workers—the Taiwanese Semiconductor Manufacturing Corporation had aimed to open a new chip fabrication facility in Arizona this September, but had to delay the opening by six months due in part to a labor shortage.
Though the CHIPS Act carries a hefty price tag, it’ll do little to solve the underlying labor shortage that’s stymying domestic production in the short term. All 17 of the semiconductor experts surveyed by the Government Accountability Office noted the need to implement work force development policies, and many specifically suggested immigration reform. The CHIPS Act’s proponents argue that key provisions would help encourage native-born Americans to enter STEM fields and boost the semiconductor labor force down the road. But lawmakers intent on boosting chip manufacturing in the near future would be foolish to neglect foreign talent—much of which is already on American soil.
Allowing foreign-born students educated in STEM fields at American universities to stay in the country could help alleviate the labor shortages that semiconductor firms are facing.”