Note: A condensed version of this article appeared in The Hill on 21 July 2021

Since the moment the CARES Act first expanded unemployment insurance (UI) benefits in late March 2020 to help workers survive the pandemic, there’s been no shortage of claims that generous UI payments cause labor shortages. Under CARES, UI recipients were eligible to receive $600 per week on top of their regular benefits, enabling many low-wage workers to make more money than they did in their jobs. Still, rigorous quantitative studies of the program found it had an “extremely limited” effect on labor supply. Now that enhanced UI payments are down to $300 per week in participating states, “it’s hard to imagine that [the program] is having [an] effect” on labor participation, when the higher $600 weekly payment was not linked to job losses or slowdowns in rehiring.

But cross-sectional empirical evidence against their arguments hasn’t stopped individual employers — especially those in low-wage sectors like leisure and hospitality — from taking to the media to weaponize their anecdotal rehiring experiences in what looks like a widespread assault on the enhanced UI program. As some observers have pointed out, however, the campaign against UI benefits is arguably just the latest public manifestation of a less visible, ongoing attack on worker power waged by the owning class. Namely, whereas higher UI benefits might not have meaningfully decreased people’s desire to work, they have affected people’s willingness to work for low wages in situations that deny them dignity. The extra income from UI has given many workers, possibly for the first time in their working lives, financial security as they search for better, more satisfying and dignified work.

In this view, enhanced UI benefits are not just means of survival — but of empowerment. By equipping unemployed workers with the financial capacity to be selective about how they use their labor, generous social programs can help ordinary people identify and dedicate themselves to what makes them extra-ordinary. Guaranteed weekly income in sums that meet one’s household needs makes it possible for more people to flourish — to pursue their goals and develop their talents. At the same time, generous, guaranteed income plays the critical role of supporting those who perform at-home care work, a responsibility which became day-to-day reality for more people than ever during the COVID-19 pandemic.

The takeaway is that whether workers receiving enhanced UI payments have been spending the pandemic caring for family members, pursuing their creative passions, looking for better work, or some combination of these, many have leveraged their sudden financial security into a clearer analysis of the wage labor system and are now in stronger positions to reject exploitative and dehumanizing working conditions.

If UI did contribute, or is contributing, to worker empowerment, then one place where evidence supporting this claim might show up is in self-employment data. Researchers tend to link the concepts of personal self-determination, which refers to the ability to chart one’s course in life, and self-employment. Self-employment, for instance, correlates with higher job satisfaction, greater job commitment, and a stronger sense of autonomy compared to wage-based work for an employer.

The following series of charts, created from U.S. Basic Monthly Current Population Survey (CPS) data via IPUMS, summarizes recent trends in self-employment for New York State. The first graph illustrates the count of workers in the state, broken out by employment type, over the past five years. The vertical line marks April 2020, the month during which most national indicators of economic health bottomed out. Like the nation overall, employment levels in New York remain well below what they were prior to the pandemic.

What the preceding chart might mask are the uneven patterns which have been taking shape in self-employment and non-self-employment since the onset of the pandemic. The figure below ties employment levels to their pre-pandemic (Jan '20) levels and graphs changes by employment type over the past eighteen months. Observe that the valley in self-employment (Jan '21) followed the COVID-era low point for all other employment (May '20) by a full eight months. However, since hitting that minimum, self-employment has taken off -- experiencing month-over-month gains throughout 2021, exceeding pre-pandemic levels in each of the last two months (May and June '21), and reaching a local peak in June. Meanwhile, employment for the rest of the workforce is still about 10% below January 2020 levels.

While it's too soon to say if this apparent surge in self-employment is sustainable, and there are no data that would allow analysts to conclusively connect the upswing to enhanced UI benefits, data on the composition of New York's growing self-employed workforce hint at some compelling possibilities. First, as illustrated below, since taking off in January 2021, the self-employed workforce in New York has become more income diverse. The share of self-employed workers with family income below $25,000 per year more than doubled, from 5% in January 2021 to 11% in June (the most recent data as of this writing). During the same interval, workers with family income between $25,000 and $50,000 grew from 11% to 15% of the self-employed workforce, while those with annual family income over $100,000 had their share fall from 51% to 38%. Put another way, the strong growth in self-employment in the first half of 2021 appears to be driven by New Yorkers from lower-income families. In what's probably not a coincidence, low-wage workers in New York were disproportionately vulnerable to COVID-related job losses, and were therefore likely to be among the state's most common UI claimants.

Next, given the unjust systematic links between income and race-ethnicity in society, it might not surprise that greater income diversity among New York's self-employed is coinciding with greater racial and ethnic diversity. Although it's far from an ideal grouping, the following graph breaks self-employed workers into those who identify as: (a) white, not Hispanic or Latinx; or (b) persons of color. Because weighted data from the CPS Basic Monthly Survey are produced from relatively small samples, breaking populations of color into multiple subgroups -- at least at the state level -- can produce unstable estimates. Yet, if one looks past this limitation, then the data show that the observed (rapid) growth in self-employment in New York that began in January 2021 has been disproportionately driven by workers of color. Non-white workers made up just 25% of the state's self-employed workforce in January, but their share since April has averaged 39%. To the extent that workers of color in New York are more likely than white workers to hold low-wage jobs -- and, more specifically, low-wage jobs that were vulnerable to COVID-related job losses -- it stands to reason that rising self-employment among such workers might be connected to unanticipated financial security from enhanced UI benefits.

Absent finer resolution data on their experiences and choices directly from self-employed workers, it's not possible to say for sure that more generous UI benefits empowered anyone to pursue their interests and talents and ultimately go to work for themselves. Nevertheless, such an outcome is consistent with what social scientists predict would happen under a social program like universal basic income, which guarantees all persons a minimum standard of living. Under such a system, it's expected that people would be able to dedicate their labor to their passions and to collective projects, unleashing their creative potentials while enriching their lives and the world around them.

Most working people have never had that sort of opportunity. They've lacked the power to chart their own life courses, and to say "no" to the wage labor arrangements they depend on for survival. Enhanced UI benefits ostensibly gave that power to scores of low-wage workers. And the powers-that-be aren't happy about it.

Now, as the battle over UI wages on and becomes increasingly situated in daily headlines about desperate bids to "save" American democracy, we should all pause to ask: is there anything more democratic than protecting and expanding ordinary people's power of self-determination?