Billionaire bond investor Jeffrey Gundlach believes stimulus checks are distorting the labor market.
The founder and CEO of $135 billion DoubleLine Capital added his thoughts to a vigorous debate over the brewing labor shortage that's causing a mismatch between surging demand, and companies desperate to hire.
"We have this strange thing of 8 million job openings, and everywhere you go…people are saying, 'I can't fill them. No one will take them,'" Gundlach told Yahoo Finance in an interview this week. He blasted the "money giveaways" baked into COVID-19 relief, such as stimulus checks and generous supplemental unemployment benefits.
Gundlach added that the end result is "people are making more money sitting at home watching Netflix, than they are at work, and they don't want to go back. I think one of the dangers that we've opened the door to is these stimulus checks are starting to feel like they might not go away," Gundlach added.
The California resident pointed to Gov. Gavin Newsom's proposal to send $600 stimulus checks to residents making up to $75,000, due to the state's budget surplus.
"In the state of New York and the state of California, a lot of people are getting $57,000 per year, tax-free, by not working. So there's a lot of distortions there," Gundlach said.
The bond investor asserted that the stimulus checks are opening up the door to universal basic income.
"I think we're already there. We had basic income, way back in the 1960s; it's still with us with welfare programs and the like. And now we've been expanding it and expanding it," Gundlach added.
With the increase in the federal deficit and U.S. debt pushing $29 trillion, "it's almost like they're moving into UBI and even sort of a wealth tax sort of situation by having the deficit so big that where you're going to get it from?" he asked.
The additional income provided via COVID-19 stimulus appeared temporary at first, then was supplemented by a boost to unemployment.
Now, "it's been extended and extended, and that was being extended is being increased... [by] California, and the federal government. My guess is that they're, they're ready to roll out another one because that's just been the pattern," he added.
With workers effectively being paid to sit out a labor force that critics say needs to pay more, Gundlach believes "people's behavior is going to, is already, I think, partly modified to kind of factor in ongoing government assistance."
He added: "And the government doesn't seem to be discouraging them from thinking that it's going to be here for a long time."
Julia La Roche is a correspondent for Yahoo Finance. Follow her on Twitter.