How much help is too much, especially during a pandemic?
That question hangs over the extra $600 in weekly unemployment insurance benefits being awarded to millions who’ve lost their jobs. These so-called supercharged benefits began in April and are scheduled to end in July, and Congress is debating what comes next.
Many believe the aid should continue for another six months because unemployment is expected to remain high for a while. Many also worry about the risk of COVID-19 exposure and spreading the disease.
Others argue the extra funding should end next month because it discourages people from returning to work. With the $600 supplement, an estimated two-thirds of the unemployed are getting more from current benefits than from pre-COVID paychecks. And 1 in 5 can get double their lost earnings, researchers said.
For those who return to the job, there’s often resentment and a sense they’re being penalized, said Les Neilly, a business owner in Pittsburgh.
“Employees who are working to help keep the business afloat feel frustrated and angry that their laid-off co-workers are reaping ‘rewards’ bestowed upon them by elected representatives,” Neilly told a Senate committee Tuesday.
Neilly Canvas Goods Co. has nine full-time and two part-time workers, and offers health benefits and a retirement plan with a 3% company match. He added a $20 daily bonus, retroactive to the first day he brought back workers, as a way to counter ill feelings.
His big ask of lawmakers: “Do not pay someone more money than they make in a 40-hour workweek,” Neilly said.
On May 23, about 29.5 million U.S. workers were getting unemployment benefits, primarily from states and an assortment of pandemic-related programs. For the same period last year, just over 1.5 million were on jobless rolls nationwide, according to the U.S. Department of Labor.
In Iowa, thanks to the extra $600, 79% of the unemployed are getting more than their average weekly wage, said Beth Townsend, director of Iowa Workforce Development.
It’s difficult for employers “to compete with the amount of benefits currently being paid to individuals to stay home,” she told the senators.
More companies report that employees refuse to return after being recalled: “So far we have received over 3,000 such notifications,” Townsend said.
Sen. Chuck Grassley, R-Iowa, led the hearing and cited a recent Congressional Budget Office report on the $600 benefit. If the extra payments were extended through January 2021, roughly 5 of 6 recipients would get more from unemployment than from their usual paycheck, the office said. And employment nationwide would be lower in the second half of the year.
“This discourages people from returning to work or taking a new job, delaying the recovery,” Grassley said. “That doesn’t sound like a recipe for economic growth.”
Sen. Ron Wyden, D-Ore., said it was an insult to American workers to suggest they’re perfectly happy sitting at home rather than going to their job. They believe in the dignity of work and realize its importance, he said, but they need help now.
“These benefits are what’s saving millions of jobless people from hunger and homelessness in the middle of this pandemic,” Wyden said.
Some Republicans suggest cutting the extra payments in half or using the money for back-to-work bonuses. But he said big corporations got huge sums to weather the crisis.
But ending the $600 benefit would ignore the reality faced by many working people, including big pay gaps for women and people of color, said Michele Evermore, a senior policy analyst with the National Employment Law Project.
“Right now, the federal government should be focused on ensuring that workers can survive this crisis and that the economy gets the maximum boost possible,” she said in her statement to the Senate committee.
She noted that unemployment benefits replace about 40% of wages, depending on the state. And only about 1 in 4 of the unemployed actually gets a payment.
Congress should ensure everyone who lost a job is getting unemployment benefits, rather than talking about “anti-worker fallacies about people ‘refusing to work,’” she said.
In every state, those who refuse suitable work are considered ineligible for unemployment benefits, she said.
Labor Secretary Eugene Scalia elaborated on the point. Those on unemployment must certify that work is no longer available to them, he said, and states have an obligation to check that out. States also must coordinate with employers that are calling people back — to see if workers are returning.
“We’d like them to keep an eye on that,” Scalia told the senators.