One of the most crucial provisions of the last coronavirus relief act was to provide an extra $600 weekly increase in unemployment benefits to the tens of millions of Americans who are currently out of work. Now the White House and many Republican policymakers want to let it expire or reduce it dramatically. But that would be a terrible mistake, and here’s why.
Unemployment is at historic levels. Today, as many as 30 million people are receiving unemployment insurance. By contrast, the previous high was roughly 12 million.
Unemployed workers need extra assistance during the pandemic. The $600 benefit is essential for millions of people to get food, to pay rent, to care for their children, to afford basic necessities. If it is cut off, it will mean a sharp decline in their living standards, an increase in poverty, and completely unnecessary suffering.
Cutting off the $600 benefit will make racial inequality worse. Black and brown communities are suffering more from this pandemic, both physically and economically, due to historic and continuing systemic racism.
Cutting off the $600 benefit will kill millions of jobs. The spending generated by that $600 is supporting over 5 million jobs. In other words, kill the $600 and you will kill 5 million jobs—jobs in every single state.
Cutting off the $600 benefit will not be an incentive to work. Some on the right have criticized the $600 as being a disincentive to work because many people have higher income on unemployment insurance than they did in their prior job. But this gets it all wrong. Right now in the U.S., there are 14 million more unemployed workers than there are job openings, so millions will remain jobless no matter what they do. You can’t incentivize people to get jobs that aren’t there.
Cutting off or reducing the $600 will cause enormous hardship and further damage the economy. And all of this is preventable. Policymakers need to take this crisis seriously and take the data seriously—and extend the $600 unemployment benefit.