COVID-19 cases continue to climb. Businesses are struggling to adapt in the face of state orders intended to control the spread of the novel coronavirus. Now is not the time for Congress to cut unemployment aid to Americans in need.
The CARES Act approved by Congress and signed by President Donald Trump in March included a $600 weekly benefit to those collecting state unemployment. The aid is scheduled to end Friday. Given the way many states process unemployment claims, including Washington, that extra $600 was cut off July 25. That leaves millions of Americans in at best a financial bind, and at worst a crisis.
House Democrats have already passed a measure approving another $3 trillion in assistance, including continuing the $600 benefit. Senate Majority Leader Mitch McConnell has countered with a $1 trillion package that many in his own Republican Party don’t support.
McConnell’s plan proposes to cut the benefit to $200 a week through September. In October, it would switch to a percentage in which the unemployed would receive benefits equal to no more than 70 percent of their previous incomes, with a $500 maximum, through December.
We argue the Republican plan is off base in a couple of key ways. First, Republicans have been claiming for some time that collecting $600 weekly, on top of state jobless aid, is discouraging people from returning to work. But a study by economists at Yale University suggests the expanded benefits “neither encouraged layoffs during the pandemic’s onset nor deterred people from returning to work once businesses began reopening.”
“Workers facing larger expansions in unemployment insurance benefits have returned to their previous jobs over time at similar rates as others,” the economists said, as reported by Business Insider. “We find no evidence that more generous benefits disincentivize work either at the onset of the expansion or as firms looked to return to business over time. In future research, it will be important to assess whether the same results hold when states move to reopen.”
According to CNBC, there are more than three times as many unemployed Americans as there are job openings — nearly 18 million versus 5.4 million, respectively, according to most recent data from the Bureau of Labor Statistics.
“Cutting off the $600 cannot incentivize people to get jobs that aren’t there,” said Heidi Shierholz, director of policy at the left-leaning Economic Policy Institute and a former chief economist at the Labor Department, CNBC reported.
Secondly, as The Associated Press reported, “Older computer systems that took weeks to set up for the initial federal unemployment enhancement would need to be reprogrammed again twice under the GOP plan.”
Given that months into the pandemic there are still people who haven’t received unemployment benefits to which they’re entitled, it seems putting a further strain on that system is simply a bad idea.
When the CARES Act was passed in March, most didn’t envision the pandemic would have the staying power it has demonstrated. Members of Congress need to recognize that reality and provide American workers — and businesses — with continuing support to ensure our country’s economic health.
