More than two-thirds of people collecting unemployment earn more than they did at their old jobs
- Two-thirds of workers earn more from the federal government than they did at their old jobs, according to economists at the University of Chicago.
- Republicans argue the $600 federal boost in weekly unemployment benefits is disincentivizing work, and say it should either be lowered or phased out entirely.
- But economists say there are more job seekers than available jobs due to the pandemic, as employers scale back their business operations and hiring ambitions.
Around two-thirds of workers are earning more from the federal government than they did at their old jobs, according to economists at the University of Chicago. That's the result of a $600 boost in weekly unemployment benefits Congress implemented in March.
However, it also indicates that many low-wage workers bore a disproportionate share of the economic pain from the pandemic. A Federal Reserve study published in May found that 40% of households earning below $40,000 lost a job in March and early April as the economy cratered.
Congress is expected to take up whether those enhanced benefits should be extended or phased out later this month, as many Republicans have called for. Conservatives argue the measure disincentivizes workers from heading back to work.
Sen. Majority Leader Mitch McConnell called it "a crazy policy" in late May, Politico reported. And White House National Economic Council Director Larry Kudlow said the $600 plus-up would be allowed to expire on July 31.
Meanwhile, Democrats are pushing to extend the boosted payouts through January 31 of next year.
However, many experts say there are more unemployed people than available jobs, and the unemployment rate is expected to remain high for much of the year. Currently, the unemployment rate stands at 11.1%, according to the Labor Department.
The boosted unemployment payout — along with the wave of one-time, $1,200 stimulus checks — helped keep at least 12 million people out of poverty, according to a recent study from researchers at Columbia University, and led to a quicker rebound in consumer spending.