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What the Devil won't tell you

Doug's dogma on unemployment has an insulting upside

OK, Gov. Doug Ducey has given me a problem.

He has unilaterally axed the extra $300 in weekly unemployment insurance supplementing the state's $240 maximum benefit. The federal government made the extra cash available during the pandemic and resulting economic fallout. It's the same for every state, so it actually more than doubles Arizona's notoriously low benefit amount.

Ducey is approaching the wind-down of that program by turning the funds into a $2,000 back-to-work bonus, plus offering $7.5 million for community college scholarships to unemployed Arizonans. 

These were things that I basically suggested the state should consider if they were to take a critical look at the way unemployment insurance functions in Arizona. Had these benefits been in place during the last recession, I would have thought I was living in a Blue State.

So … now what do I do? Ducey and the Legislature aren’t supposed to turn my rantings into action. They’ll put me out of business.

On the other hand, Ducey’s moves come on top of just one single jobs report showing only 220,000 new gigs added to the economy in the month of April. The GOP has chosen this occasion to start quoting Ronald Reagan (not so much on passé ideas like immigration or democracy). The Gipper used to love to blame the poor for the problems of the rich and would wax poetic with dogma like “the best social program is a job.”

So the best social program would be a massive jobs plan to A) convert the economy from fossil fuels to energy technology; B) retrofit the nation's buildings to climate-proof them; invest in soil preparation money to lower carbon in the atmosphere. 

No, wait. That's the Green New Deal.  

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What Reagan and Ducey actually mean the best social program is no social program at all. It’s just a business person hiring someone to help make investors richer.

That is just another way of saying let the free market do everything. But the market dances to its own beat and not since the Bronze Age has any market been what a libertarian would call “free.” There’s always a pesky civilization to support so the market can function. Sucks, huh?

Nationally, COVID-19 cratered the economy in the spring of 2020 in large part because the economy had to shut down. See, there was this pandemic …

Ducey’s approach represents some bold thinking about how to redo unemployment benefits. It's also lousy with old thinking, filled with stereotypes and hobbles those looking for work.

A (b)old new approach

Let’s start with the good news.

The $2,000 back-to-work bonus is available for new employees who are on the job for at least 10 weeks and earning less than $52,000 a year.

That's helpful but imperfect. To make sure the system isn’t gamed, the bonus requires the worker stay on the job for two and a half months. My nitpick is that new employees need the money when they start the job.

Getting back into the work place is no easy thing, if someone is limping into a new position. Living on unemployment insurance doesn’t exactly afford the ability to fix a car, upgrade tech, buy new clothes for the new gig or moving costs for God's sake.

A 10-week IOU is half a loaf. But if I were negotiating this deal with Ducey and had to concede the waiting period I would take it.

The child care money is also targeted for new employees already on unemployment and earning less than $25 an hour. Any help they can get is a big boost.

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Details are short on the governor’s educational scholarship program. Any time anyone can improve their skills, it benefits them and the economy.

Liberals can be lulled into thinking the government can make unemployment more comfortable. Conservatives worry the safety net will make being out of work too comfortable. Both miss the point. There is no comfortable way to be unemployed for any stretch of time so make sure it's not devastating.

All of this is temporary but it’s also precedent.

Arizona has traditionally used its state-as-laboratory power to experiment with the social safety net as a license to destroy the social safety net.

So I will take the innovation where I can get it.

Are there jobs out there?

Ducey's team points to U.S. Bureau of Labor Statistics numbers that they say proves employers have 160,000 jobs they are eager to fill. But where are those jobs? What are the qualifications? Are we trading engineers for waiters? Or are we telling housekeepers to take a  job programming computers?

In Arizona, the unemployment rate is now at 6.7 percent. That’s not terrible but it’s a full two percentage points higher than before the pandemic, when the state lagged the national jobless number by nearly two points.

In March, the unemployed in Arizona numbered 240,000 – a figure cut more than in half from the April 2020 high of 580,000. In fact, Arizona’s jobless number has been hovering at 240,000 for months now.

Here I must point out that, Ducey didn’t exactly go overboard protecting Arizonans from the coronavirus. He sort of did the other thing. Ducey put 340,000 people back to work and 17,000 people died. Let’s take another state of about the same population: Washington.

Socialist Gov. Jay Inslee shut down with much more force than Ducey. They still have put 440,000 back to work and only 5,000 Washington state residents died of coronavirus. Ducey lost one Arizonan to the disease for every 16 he put back to work. Inslee lost one employee for every 105. But, y’know, it's the Republicans who are pro life.

Washington’s economy is saddled with a 4.5 percent unemployment with 209,000 people out of work.

My point is that Arizona’s employment situation isn’t a case of a whole bunch of businesses suddenly out from under oppressive government shut-downs. A 6.7 percent unemployment rate may just match the caring capacity of the Arizona economy right now.

If so, Ducey cutting off the added unemployment benefit isn’t going to do a damn thing to goose the economy.

And with the eviction and foreclosure moratorium coming to an end soon, that lost income could put a lot of people out on the streets — which will burden our social safety net much more directly.

Ready to rumble

Ducey is almost certainly right about one thing. Overall, the economy could not be more different than the one Obama inherited in 2009.

There is a huge difference between missing an expected one-month job gain of 1 million by about 800,000 jobs, and the economy shedding 800,000 jobs per month.

Americans are sitting on a bunch of savings, incomes are rising and confidence is trending upward. Inventories are a bit slow to respond but interest rates are low so businesses can finance investment so supply can meet demand.

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It’s the difference between an owner towing a burned-up Geo Metro into a shop and asking how long to turn it into a Porsche and an actual freshly tuned-up 928 conking out because the driver misses first gear.

This economy is about to explode off the line.

So I’m not entirely sure this extra $300 per month is necessary because the jobs will be out there soon enough.

With Arizona's maximum benefit lower than all other states but Mississippi, the beneficiary of the program would have to return to any job paying $288 a week. With the federal supplement, they can refuse work paying $648 a week — 120 percent the weekly unemployment check. 

There's a social upside to that. It can drive up wages.

Oh God! Not that!

We don’t use the taxpayer trough to improve wages, now do we? 

We do it all the time. Arizona policy makers have long justified tax cuts for that very reason. It offloads risk from the rich to the working people in any number of ways in the crafting of employment law, rental law, consumer and environmental protections.

On the other hand, workers get a lot less employable the longer they are out of a job. Those who blow past six months can be marked for career death.

Primary wisdom

Ducey's innovations are going to be interesting to watch play out, and he deserves some credit for them. But his justification is an insult and broadcasts to prospective bosses that the unemployed are just congenitally lazy and need to be over-regulated.

I think that's the point.

More than a dozen Republican governors have stopped taking the extra unemployment benefits since the April jobs report showed the economy failing to add jobs quickly. A single report doesn’t a trend-line make. That would be a trend “point” and a point isn’t a line.

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So Ducey must move right now to show up Joe Biden over a single month of national data. He’s not even waiting for Arizona’s April jobs report to come out. It's not unlike how Republicans under Barack Obama refused stimulus money and the Medicare expansion in the Affordable Care Act. 

The stimulus rejection blunted economic growth and the forfeiting Medicaid money undercut insurance markets. Both made Obama look bad.

The amusing part is that if the economy is as good as these Republicans say, they aren't even going to dent Biden. 

We don't even know if businesses are just tossing applications from the long-term unemployed like they did during the last recession.

It doesn't matter. In Republican thinking, the poor are lazy. If God favored them with a sense of industry, he wouldn’t let them be poor. So hammer them constantly. At the same time, stroke the rich. Jehovah clearly favors them. Why else would He invent super yachts?

It’s your basic Calvinist economics – short on research, long on dogma. No Republican ever lost a primary by taking too big of a crap on the poor.

Besides, how much does he really help the unemployed if he tells businesses the jobless are essentially lazy to the core?

Blake Morlock is an award-winning columnist who worked in daily journalism for nearly 20 years and is the former communications director for the Pima County Democratic Party. Now he’s telling you things that the Devil won’t.

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Gov. Doug Ducey's is innovating with unemployment benefits but those changes come from tired, old stereotypes with a dangerous message.


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