Unemployment benefits helped many families stay afloat
An interesting fact about the “enhanced unemployment” benefit, which ended at the end of July is that they resulted in payouts that were some one-third higher than the lost wages they were replacing.
The “enhanced unemployment” was offered as part of the federal coronavirus relief package, and consisted of some $600 extra per week for everyone who lost their jobs during the pandemic.
Some recipients were and still are barely scraping by while others were doing quite a bit better than they were while working at lower wage jobs.
At issue now that we are very tenuously reopening things is if this benefit should be renewed and for how much. As has been proven many times, once a government benefit exists it rarely goes away quietly. Lawmakers in Washington are currently fighting over how much and for how long it will be renewed. The president has signed an executive order for an additional $400 a week while Democrats say this is not enough and many question if it will withstand legal challenges.
There is no question that many will continue to need help as many businesses continue to remain shuttered while others have been drastically reduced. The hope is that any agreement results in properly targeted aid while not creating a disincentive for individuals to work.
A popular refrain from many business owners lucky enough to be operating during the past few months is that they were struggling to find employees. Soon after the pandemic hit our community, Wal-Mart and Food City announced job openings. They were competing for employees with a very generous federal government paying people not to work.
However, the enhanced unemployment benefits helped many families stay afloat – pay rent, utilities, and put food on the table. It also ensured that people kept spending money, which is crucial if businesses are to stay afloat.
These are temporary benefits, and even if extended, they will eventually run out.
And, again workers who fail to look for work or turn down job offers risk losing their unemployment benefit. While the CARES Act — which created the weekly $600 aid for unemployed workers – expanded the acceptable causes for refusing to go back to work while still qualifying for unemployment benefits, people still have to provide a valid public-health reason for not returning to work. That’s also the reason the unemployment benefit is more generous than in previous recessions: It gives workers the opportunity to stay at home in order to mitigate the spread of the coronavirus without causing their households extreme financial stress. In other words, it’s not the extra cash payment that might discourage people from working; it’s the public health crisis that’s killing Americans every day.
Is it possible that there are cases where people choose not to return to work because the unemployment benefit is higher than their wages? Of course. But that number will be negligible.
But, what it has done has ensured that Americans can pay their bills, do not fall into poverty, and still spend money in an economy starved for business.
The $600 unemployment benefit is a drop in the bucket compared to the billions of dollars paid to companies large and small who have benefited from coronavirus aid.