Unemployment $200 bonus is still generous without discouraging people to go back to work
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Congressional negotiators debating whether to extend federal unemployment benefits should support the Senate Republicans’ plan because it helps more Americans return to work while providing the unemployed with significant support.
In March, legislators argued that $600 bonuses were needed while “the consumer economy is shuttered.” Since then, lockdowns generally have ended and weekly bonuses have expired. If the $600 bonuses were to extend into 2021, as the Democratic-led House proposes, the unemployed would continue being discouraged from work by getting more in unemployment benefits than they earned while working.
One study found 2 in 3 did just that, and another study estimates it would be 5 in 6 in the future. The nonpartisan Congressional Budget Office projects that continuing such benefits “would reduce employment in calendar year 2021.” Even Democrats like Connecticut Gov. Ned Lamont admit on $600 bonuses that “sometimes it discourage work.”
Americans agree. According to a recent Harris poll, “Most American adults (58%) say the $600 a week in enhanced unemployment benefits should expire by the end of August.” The reason? “Two-thirds of Americans (62%) also think the enhanced jobless benefits discourage people from going back to work. Even among unemployed Americans, nearly half (46%) say they would avoid returning to work if the benefits are continued past July 31.”
That’s why Senate Republicans propose reducing bonuses to generally $200 per week in the months ahead (some states might provide more, but benefits would still be less than earnings). The $200 bonus is still generous; it is eight times the $25 bonus included in the 2009 Obama stimulus plan.
Paid in addition to state unemployment benefits averaging $342 per week, the resulting $542 per week average offers unemployed workers more than they have ever received previous to the pandemic (and they are expected to get another round of $1,200 stimulus checks soon).
This would maintain significant federal assistance while reducing disincentives holding back workers and the economy.
Matt Weidinger is the Rowe Fellow in poverty studies at the American Enterprise Institute. He is a former deputy staff director of the House Ways and Means Committee.
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This article originally appeared on USA TODAY: Unemployment $200 bonus still generous and helps people return to work
