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$ 600 a week
When Congress issued a $ 600-a-week increase in unemployment benefits in the spring, as part of the CARES Act, the reaction was swift and fierce.
The goal of the infusion, along with the typical state benefits, was to completely replace lost wages for the average worker, nearly $ 1,000 a week. (Typical state benefits usually replace half of lost wages.)
But many workers, especially those on lower wages, earned more in unemployment than in work.
Many Conservative lawmakers criticized the policy as a disincentive to return to work. This dynamic would slow the economy to a rapid rebound, they argued.
Democrats argued that improvement was a necessity. Millions of people relied on income support to pay bills and put food on the table, at a time when finding work was a challenge and it made sense to keep people at home to prevent the spread of the coronavirus.
Numerous studies found that the $ 600 endowment had no negative effect on the labor market. Altogether, they did not stop people from looking for work or leaving them, they found. Companies had no trouble hiring jobs.
“There were hardly any and there were too many unemployed people,” 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-scale problem.”
The tug of war resurfaces
The supplement expired in July. Democrats wanted to expand it, but Republicans opposed it.
This time around, lawmakers appear to be less vocal about their opposition, but relevant legislation shows they still have it in their heads, according to labor experts.
“It’s left to worry about $ 600,” according to Andrew Stettner, a senior member of the Century Foundation, a progressive think tank. “[The legislation] try to make all states more vocal on this issue “.
A $ 300 cash infusion may have a greater deterrent effect now, given labor market improvements since the time of the crisis, Marinescu said. But it is not a major concern, he said, as there is still a shortage of jobs and the economy has not recovered to the extent that it would pose a threat.
“It’s not that bad and we need the stimulus,” he said.
In addition, fewer workers would exceed full pay replenishment with a $ 300 increase, which is half the level of the CARES Act subsidy and the same amount as a lost wages assistance program created by President Donald Trump during the ‘summer.
The typical person would replace about 85% of their pre-dismissal salary with an additional $ 300, according to an analysis by Everie economist Ernie Tedeschi and a former Treasury Department official.