Unemployed lose essential benefits as Fed fuels speculative feeding frenzy and debt accumulation

June 17, 2021

In the struggle for social justice, professional social workers exercise a de facto “preferential option” for the poor, oppressed, and marginalized. It’s a matter of the most profound, non-negotiable, ethical commitment. Surely that commitment encompasses the hundreds of thousands of unemployed workers who have already lost, or shortly will lose, supplementary unemployment benefits provided as part of American Rescue Plan pandemic relief.

Last weekend, Mississippi was among the first states, along with Alaska, Iowa, and Missouri, first out of the gate to cut off supplementary federal assistance. About 291,000 workers – disproportionately female, low-wage, and people of color – are in that first cohort. Following close behind is a second group of eight states – Alabama, Idaho, Indiana, Nebraska, New Hampshire, North Dakota, West Virginia, and Wyoming – that will cut benefits to another 417,000 unemployed workers. Benefits under the Plan are set to expire on September 6 in any case, but Republican leaders in 25 states have declared their intent to turn down funds early, impacting approximately 4 million workers altogether.

The reason for the early shutdown of assistance? One of the oldest and most favored bits of market fundamentalism – the supplementary funds are keeping workers out the labor market, creating shortages of low-wage workers needed to expand and sustain the recovery of the severe COVID-19 economic downturn. Oh, Lord, can’t have that! The sooner those workers are effectively forced back to work, the better. The sooner we can all get back to “normal” times. Normal, indeed.

In fact there are multiple factors, all of them more important than too-generous unemployment benefits, that explain the current mismatch between labor supply and demand. Those factors could well be the subject of a subsequent blog post, but here I want to draw my fellow social workers’ attention to the screaming hypocrisy of market ideology. At the same time that truly meager unemployment benefits, benefits literally keeping food on the table for millions of Americans (the majority of them children), helping pay the rent and keep the lights on, etc., the Federal Reserve (the U.S. central bank) continues to pump massive amounts of money into what increasingly appears to be little more than a speculative debt bubble.

“Quantitative easing” – essentially giving money by the fistfuls to banks and other major financial institutions, much of which is used to used for speculative “investments” in debt-infused and inherently unproductive (i.e. not related to the creation of socially useful goods or services) financial assets, what Marxist economics call “fictive capital” – is responsible for growing the Fed’s debt holdings from $900 billion prior to the 2008 financial crisis to an eye-popping $8 trillion in 2020, with another $1 trillion expected to be added to the pile by the end of this year.

Evidently, there’s no end to the economic assistance that can and should be afforded our financial lords and masters. But a few hundred dollars extra to the unemployed? That must stop now!

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