Can't Get a Face Mask? Blame Labor Regulations.

Did you know that over 171 regulations have been waived so far in the fight against the pandemic?

Even so, that is clearly not enough.

The top domestic producer of face masks has not reached full capacity due to unemployment insurance laws:

Image by Macau Photo Agency, via Unsplash, license.

Here's the reason [Prestige Ameritech owner Mike Bowen] isn't switching over to 24/7 production and increasing his efforts now -- he did that during the H1N1 pandemic in 2009. He got burned. In order to protect his business and his workers, he is doing things differently this time around. During that pandemic, he increased production, hired more employees, and went to three shifts a day. Then the bottom fell out after the pandemic ended. He was stuck paying unemployment for all those people and had to reduce production. [bold added, link omitted]

But Gus, isn't unemployment 'insurance' just a tax? I can hear you ask. That's what I thought, but not necessarily. According to Bizfluent:

In most cases, when you are laid off, the employer who terminated your position does not directly have to pay for your unemployment benefits; these checks come from the state's unemployment fund. However, businesses pay unemployment taxes based on their track record retaining employees, so an employer that regularly lays off workers will face an increased unemployment tax rate. However, some states ... allow some types of businesses the option of reimbursing the state directly for unemployment benefits made to their former workers. [bold added]

In the short time I have known about this story, I have not found a firm answer in this case, but it sure sounds like this is what happened here.

Regardless of exactly how Bowen got "stuck," the fact remains that he is not free to hire workers without unemployment insurance, even if they would be willing to accept employment under such terms. (I can think of several million people who would jump at such a chance right now.)

As a consequence of a lack of freedom of contract in the form of a requirement to provide unemployment compensation, this manufacturer knows he will risk his business by responding "too much" to the current emergency, and so he'll limit his response and the mask shortage will continue.

In a truly free economy, Bowen would be able to hire as many temporary workers as he needed for as long or short as he needed them and raise his prices enough to cover the costs of rapid expansion (and the likely drop-off in demand). But since neither he, nor people willing to take temporary work, nor desperate hospitals are free to set their own terms for trading with each other, one man is being deprived of the opportunity of a lifetime while millions of others are losing the benefits of having a face mask, be it anything from greater peace of mind to protection from disease.

-- CAV