Could Ending the $600 Unemployment Bonus Hurt the Job Market?
June 17, 2020
As part of the government’s response to the coronavirus crisis, those on unemployment are currently receiving an extra $600 in benefits. This supplement is set to expire in July, and congress is unsure if they will extend it.
Some lawmakers argue that the additional income disincentivizes recipients from returning to work. Indeed, some studies suggest that as many as two-thirds of those on unemployment are currently making more than when they were employed.
Economists at the Economic Policy Institute argue that ending the extra benefits would further harm the job market and slow the economic recovery. The think tank argues that, with job openings at the lowest level in years, workers who do desire to return to work may be unable to do so. They warn that when the extra benefits expire, millions of Americans will have less disposable income to spend on restaurants and retail, further harming businesses that are barely surviving. The group cites a study from Moody’s that found that every dollar the government spends on uninsurance, there is a $1.64 increase in GDP.