When we'll know it's time to reduce the unemployment boost
Democrats and Republicans are still at loggerheads over a second coronavirus rescue package. The primary sticking point is super-unemployment: Democrats want to extend the original $600-per-week boost, while Republicans want something much smaller.
The GOP is obsessed with the fact that some lower-income workers ended up getting paid more after they were laid off. "We're not going to use taxpayer money to pay people more to stay home," Treasury Secretary Steven Mnuchin said recently. Yet overwhelming evidence shows it's the uncontrolled pandemic and a lack of jobs keeping workers at home, not the increased benefits.
In response, Democrats like Speaker of the House Nancy Pelosi have proposed keeping super-unemployment going based on economic conditions — once the economy has recovered, then people wouldn't need such a generous benefit. This could be a good idea, but it would depend on the condition. Super-unemployment was the main thing keeping the economy from spiraling into a complete collapse. If it is cut off too soon, then America could easily nosedive right back into a recession.
A good candidate would be when the ratio of jobseekers to jobs goes below one — meaning there are more job openings than unemployed people (right now, there are four jobseekers for every opening). For one thing, that is facially fair. One can hardly blame people for going unemployed when there are simply not enough jobs to go around. For another, that situation has only happened once in the last 20 years (between January 2018 and February 2020), because those were the only two years when America got even close to full employment. Keeping our foot all the way to the floor on super-unemployment until the job market is very strong will ensure that America can pole-vault out of the pandemic economic sand pit, and not be stuck with weak growth and few jobs as it was for nearly a decade after the Great Recession.
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