Latest jobs report blows up GOP argument that unemployed don't need more help
It turns out there’s no evidence that the $600 weekly unemployment insurance boost kept Americans from going back to work.
The July jobs report released Friday morning put a dagger in the heart of the GOP argument that a $600 boost to weekly unemployment checks hampers economic recovery, with economists saying that the increase in unemployment aid actually contributed to better-than-expected jobs numbers.
The jobs report said 1.8 million jobs were added in July, with the unemployment rate falling to 10.2%.
“The growth in return to work in July shows that the unemployment insurance stimulus checks are not holding people back from returning to work,” Betsey Stevenson, the former chief economist at the Bureau of Labor Statistics, tweeted.
Republicans have been critical of the $600 boost to weekly unemployment checks, saying that number is too generous and incentivizes workers to stay home rather than search for work.
“We are paying a whole lot of people a lot more money to stay home and not work than they made on their jobs — and that is terrible,” Sen. Ted Cruz (R-TX) said in July.
Economists had already believed the GOP claim was questionable. But they say Friday’s jobs report provides definitive evidence that the claim is untrue.
“Job growth was high evidence that the stimulus worked and we need more stimulus,” Jason Furman, who served as the chair of the Council of Economic Advisers under former President Barack Obama, tweeted.
The $600 weekly unemployment insurance payment has currently expired, with Republicans trying to slash the payments as they negotiate an extension with congressional Democrats.
Senate Republicans let my Majority Leader Mitch McConnell proposed a plan to cut the weekly benefit to $200 per week until state unemployment systems can create an algorithm that would pay workers 70% of what they made before they lost their jobs.
Critics say this plan would take months for state unemployment systems — which could barely handle the glut of unemployment insurance claims to begin with — to create.
Democrats are standing firm in their demand that the $600 weekly benefit be extended through the rest of the year.
House Democrats already passed a bill on May 15 extending the payments at the $600 rate — which was created early in the coronavirus economic crisis because it covers 100% of the average worker’s salary.
“Republicans are blocking economic relief because they say it’s too generous to unemployed workers, but those enhanced benefits aren’t stopping people from working,” Rep. Don Beyer (D-VA), who has been loudly pushing for an extension of the $600 weekly payment to be extended, tweeted.
“The $600 payments have been helping support the entire economy; if they aren’t restored things will get much worse,” he said.
Ultimately, economists say the $600 weekly benefit has been one of the best things for the economic recovery, and without it, the recovery could backslide.
A report from the Economic Policy Institute found that without the $600 weekly unemployment insurance boost, more than 5 million jobs would be lost — as American consumption would fall and companies would be forced to cut jobs.
“All the fears that the payments are holding the economy back are not only wrong, the opposite is true,” Stevenson tweeted. “Boosting household income has supported spending & thus work.”
Published with permission of The American Independent Foundation.
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