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$ 600 per week
When Congress issued an increase of $ 600 a week for unemployment benefits in the spring, as part of the CARES Act, the reaction was swift and violent.
The purpose of the infusion, along with the typical state benefits, was to completely replace the lost wages for the average worker – almost $ 1,000 a week. (Typical state benefits usually replace half of lost wages.)
But many workers, especially those with lower wages, earned more while unemployed than at work.
Many conservative lawmakers criticized the policy as a disincentive to return to work. This dynamic would prevent the economy from a rapid recovery, they argued.
Democrats argued that improvement was a necessity. Millions counted on the financial support to pay bills and put food on the table, at a time when finding a job was difficult and it made sense to keep people at home to prevent the spread of the coronavirus, they said.
Numerous studies have found that the $ 600 stipend has not had a negative effect on the job market. Overall, this did not inhibit people from looking for work or make them quit their job, they found. The companies had no trouble recruiting for job openings.
“There were not enough jobs and many people were unemployed,” said Ioana Marinescu, an assistant professor of economics at the University of Pennsylvania, who co-authored one of the studies. “It just wasn’t a big problem.”
Tug of war resurfaces
The supplement expired in July. Democrats wanted to extend it, but Republicans objected.
This time around, lawmakers appear to be less vocal about their opposition, but relief legislation shows it is still on their mind, according to labor experts.
“It was left over from the $ 600 worry,” according to Andrew Stettner, a senior member of the Century Foundation, a progressive think tank. “[The legislation] is trying to make all states more expressive on the subject. “
A cash injection of $ 300 may have a greater disincentive effect now, given the improvements in the labor market since the height of the crisis, Marinescu said. But it is not a significant concern, she said, as jobs are still scarce and the economy has not recovered to the point of being a threat.
“It’s not that bad and we need the stimulus,” she said.
In addition, fewer workers would surpass full wage restitution with a $ 300 increase, which is half the level of the CARES subsidy and the same amount as the Missing Wages Assistance program created by President Donald Trump over the summer.
The typical person would replace about 85% of his pre-dismissal salary with $ 300 more, according to an analysis by Ernie Tedeschi, an economist at Evercore and a former Treasury Department employee.