The Truth About The Unemployment Expansion

As record numbers of people filed for unemployment and the country began to slowly shut down, congress passed the CARES Act, a bipartisan bill to provide relief to the American people. Included in the bill was a $600 a week unemployment expansion that also allowed workers typically not eligible to collect unemployment to receive benefits.

Since the passing of the bill the unemployment expansion has become a point of contention between Democrats and Republicans, as well as frontline workers envious of their unemployed counterparts. Some people, including prominent politicians, claim that the additional $600 a week is too generous and it disincentives employees from going back to work. This claim has been proven to be false. A study from a group of Yale University economists showed that workers receiving the extended benefits have been returning to the workforce at the same rate as workers not receiving the additional $600 a week.

The fact of the matter is that people aren’t staying home because they’re lazy or don’t want to work, they’re staying home because they can’t find a job.  The employment opportunities aren’t even close to being back at pre-pandemic levels and much of the employment available is high risk. While the unemployment rate has dropped to 8.4% from its peak of 14.7% during April, we’ve still only recovered less than half of the jobs lost in March and April. Furthermore, the August jobs report shows that the number of permanent job losses increased by 534,000 in August, totaling 3.4 million since the start of the pandemic. The shift from temporary lay-offs to permanent job losses are leaving millions of Americans unemployed and likely unable to collect additional unemployment benefits due to Congress’ inaction.

The notion that the $600 a week is too generous exposes an even deeper problem; low wages that have become stagnant are now the norm. The national minimum wage is $7.25 an hour, making the monthly wage of a full time employee $1,160 a month, before taxes. The average rent cost in the United States is $1,012, meaning that a full-time employee making minimum wage cannot even afford their rent, let alone other expenses. According to the AFL-CIO, if the federal minimum wage had been adjusted for workers’ productivity since 1968, the inflation-adjusted minimum wage would be $18.67. Due to inflation the federal minimum wage is worth 31% less than it was worth in 1968.

Instead of insisting that $600 a week is too generous to give hard working Americans being impacted by a pandemic we need to ask ourselves, and our elected officials, why we think it’s acceptable to pay people a wage that doesn’t allow them to support themselves, let alone a family.

Congress remains in a stalemate over the second stimulus. With many economists arguing that the economy needs it to survive, now is not the time to hold out on the American public. Many studies show that the 600/wk unemployment expansion boosted the economy, with spending increasing by $2 for every dollar given in unemployment aid. Months after $500 billion in corporate bailouts, why is the federal government so hesitant to help families in need but so quick to pull the trigger to keep billion-dollar businesses afloat?

Senator Lindsey Graham vehemently denied that the $600 a week would be included in a second stimulus bill, saying “I promise you over our dead bodies will this get reauthorized”. With Senator Graham making a comfortable $174K a year, it begs the question, whose dead bodies are we talking about? The 190K Americans who have already lost their lives to the virus, or the 13.9 million Americans who will stop receiving benefits in 2021 and possibly be forced into poverty?

Yours in Strength,

The Take Back Control Team