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Why the benefit of a plague defines the complexity of all the necessary resources

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The author is the executive editor of MoneyWeek

Suppose you are unemployed and someone is offering you $ 15 an hour to work 40 hours a week as a change manager at McDonald’s in the US. This can cost you $ 600 a week. It’s not a lot of money. It’s not dangerous. That’s why everything else is the same, if you need a job you can probably get one. But what if someone gives you more than $ 600 a week if you don’t receive it? $ 650 either – stay home instead. I guess you he may think twice.

This could be part of a description of the complexity of American companies currently hiring. For the past several years of the 18 the US Government not only has it enlightened people once and for all but it has also provided opportunities for employment. People may ask more and longer than before (39 weeks instead of 26 weeks). The average weekly unemployment rate in the country is now $ 600, while other countries are paying $ 700.

These figures are not as good as they were at the beginning of the epidemic, when the prices you replace (the amount you earn instead of losing your job) rose from the previous epidemic to 48%. But it does provide a reason for many people to decide, as Intertemporal Economics puts it, that “retirement benefits are less than what the government transfers and the need for retirement”.

This can be especially true if you add to the savings cohort that families have made – money that allows them to spend time before re-entering the market. There may be temporary financial benefits here: if the value of your home rises by 10%, you may feel temporary economic pressure. Note that a a little more Americans said they felt safer in 2020 than in 2019.

The numbers reflect the effects of both – the lack of a job market. Apple’s employment numbers were displayed 75 percent of the minority return to work more than most experts expect. This can’t be put on the main door – there are plenty of places to go. There are other problems – consider health issues (who wants to leave home without a vaccine?) And the problems of children (not all US schools are open). All is well (there is a reason why some 60% of job seekers want to stay). But the last two points work only in most families because of the good things that have been saved and the epidemic saved.

All of this has been difficult to quantify during the plague. But there are health studies showing that the more you pay people to work less, the sooner we can see if this has a good post coronavirus. As Capital Economics points out, some US states have now opted to withdraw from Federal Programs (“incentives” says Governor of Montana), which could explain “the rapid decline in unemployment cases.”

All of this can seem overwhelming. But it is a problem for those who believe in the global financial system (UBI) – and who think that the epidemic should be a catalyst that is accelerating their start in developed countries. The main idea of ​​UBI is that if you can get money to give everyone a try, unlimited money to meet all their needs, they will be happier, healthier, more profitable and – jobless.

It’s a good idea. But beyond the low cost, it comes with a problem: there have been so many small experiments, which nothing has proven to work. The only global awareness test that has taken place so far was in Finland a few years ago. There was one obvious fact: those earning less were happier than those in the group. This is not surprising – it is hard to imagine the free money that makes so many people unhappy. However, when it comes to employment, there are nothing clear.

You could say that “real UBI” has never been tested: most experiments and promises are about giving less money to fewer people. Note that the Scottish government has recently announced a $ 37,000 minimum wage if it would give Scotland independence. And you could say that when it comes to free money, the amount of time can make a huge difference. If you know you are earning $ 600 free per month for three months, you can choose to raise your feet. If you know it is permanent, you have the opportunity to have a long career.

What you can’t do is that we have some evidence now that UBI could be better at work than we were two years ago. Some followers may say it doesn’t matter: there is a string that thinks that actions alone can ruin a job, and make UBI guide to better rest.

But if you find yourself in such a situation, you need to make sure that you are honest with yourself. One of the reasons the plague has taught us is that if you give people the kind of economy that allows them to lose their jobs, many will probably do so. And it doesn’t help everyone in the long run. Just ask 44% of US small businesses that say they can’t get anyone to work for the services they offer.

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