Econ 101 Vindicated Again

One of the most elementary lessons of economics is that incentives matter. You’d hardly think this needs demonstrating, but apparently even the Wall Street Journal‘s news pages struggle with basic economics. Today the Journal reports that—lo and behold!—job growth is rising faster in states that have ended lavish unemployment bonus payments. I love the “gee whiz” language of this story:

The number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states canceling enhanced and extended payments this month, suggesting that ending the aid could push more people to take jobs.

Federal pandemic aid bills boosted unemployment payments by $300 a person each week and extended those payments for as long as 18 months, well longer than the typical 26 weeks or less. The benefits are set to expire in early September, but states can opt out before then.

A little further down the story offers even more comedy:

“You’re starting to see a response to these programs ending,” said Aneta Markowska, Jefferies’ chief financial economist. In recent months “employers were having to compete with the government handing out money, and that makes it very hard to attract workers.”

I expect we can look forward to similarly insightful Journal new stories such as:

Study Finds No One Washes a Rental Car

A study of 2,500 recent car rentals with Hertz found that not one single customer ran the car through a car wash before returning it to Hertz. Social scientists were baffled by this finding, as they had hypothesized that opinion surveys finding rising support for altruistic behavior would lead to an increase in car rental customers having sympathy for Hertz, which is still struggling to exit bankruptcy.

Or maybe:

New Satellite Images Vindicate Copernicus, Galileo

New high-resolution images from the Hobbled Telescope finding that Venus and Mars orbit the sun offer fresh confirmation of the “heliocentric” hypothesis championed by Copernicus and Galileo. Galileo welcomed the news from his cell in Facebook jail, where he was placed for violating Facebook’s “community standards” regarding astronomy and astrology.

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