$ 600 unemployment enhance, supported by Ron Wyden, not a work-inhibiting incentive
Senator Ron Wyden, D-OR
Sarah Silbiger | Getty Images News | Getty Images
Senator Ron Wyden, a Democrat from Oregon and the new chairman of the Senate Finance Committee, is again calling for a $ 600 weekly increase in unemployment benefits.
That support comes from a new study published by researchers at Yale University that found that an increase in weekly unemployment benefit of $ 600 didn’t stop Americans from looking for work in the spring and summer if there was a previous improvement.
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A payment on this scale, as well as a benefit phasing out mechanism as economic conditions improve, will help families end the crisis, Wyden said.
“My starting point here will be my legislation reintroducing the full $ 600 a week and adding extra weeks of benefits and the gig worker program to economic terms,” said a statement from Wyden’s office.
“There is so much to be done and the Senate cannot reconsider economic relief every two or three months,” he added.
The latest $ 900 billion aid package increased unemployment benefits by $ 300 a week from early January to mid-March. This corresponds to the level of a federal subsidy for lost wages, which will be granted for six weeks from the beginning of August.
But a $ 600 weekly infusion could be more likely after the Democrats took control of the White House and both chambers of Congress in two run-off competitions in Georgia last week. President-elect Joe Biden has called the latest relief effort a down payment and wants Congress to send more to sick families.
Congress may be able to provide more Covid relief through a process called “budget balancing,” which would allow Democrats to pass certain laws by simple majority, some political experts believe. The GOP passed its tax law in 2017 using this mechanism.
The Biden transition team did not comment on whether the president-elect would support a $ 600 rebound.
The $ 600 improvement was provided through the relief measure of the CARES Act. The funds that were added to the typical state benefits were available for around four months until the end of July.
Democrats generally endorsed it as a necessary income support for people who were unemployed through no fault of their own during the Covid pandemic.
The policy aimed to fully compensate for loss of income for the average unemployed.
According to an analysis published by University of Chicago economists, 76% of people were eligible for more unemployment benefits than their previous paychecks because of the subsidy.
This dynamic led Republican lawmakers to criticize the supplement as inhibiting work, which would lead people to remain unemployed and delay getting back to work.
In April, the Heritage Foundation, a conservative think tank, estimated that the improvement could result in nearly 14 million more people losing their jobs and up to $ 1.5 million in economic output lost.
The $ 600 benefit didn’t work badly, however, as demand for workers dropped significantly, according to Dana Scott, a PhD student in economics at Yale and co-author of the new study.
More generous workers who tended to earn less were no less likely to return to work than others, the paper found. Several economic studies published in the summer had similar results.
The new results are significant given the potential renewed interest by some lawmakers in reviving a $ 600 weekly improvement.
Some are calling for more relief for the buttress families amid signs of worsening economic conditions and rising coronavirus cases. The US economy cut 140,000 jobs last month, the first decline since April. More than 19 million Americans are still accumulating unemployment.
A $ 600 increase in benefits could affect labor as the economy normalizes and demand for labor increases, Scott said. While employment was slowly improving through December, labor demand is still likely to be lower due to rising Covid cases and the associated business restrictions, she said.