Critics call the extra $600-a-week in unemployment insurance a disincentive to work. A new analysis disputes this.
One big reason critics don’t want to extend the coronavirus unemployment benefits is they’re worried the extra $600 per week will keep Americans from returning to work.
Seven in 10 workers who returned to a job in June were making more on unemployment insurance than their previous wages, according to an analysis of the Current Population Survey from Ernie Tedeschi, an economist at Evercore ISI and a former Treasury economist in the Obama administration. Around 65% of those who went back to work in May also took in more from unemployment, he found.
An unintended side effect of the extra benefits was that many lower-earning workers received more income on unemployment than from their usual wages. ‘It’s not holding back job growth’But the numbers aren’t bearing out the disincentive theory, according to Tedeschi. Even those making a lot more while unemployed went back on the job. Almost 1 in 5 workers who returned to work in June were making two to three times more on unemployment than their prior wages.
If an employee refuses to return to work and isn't protected by the Americans with Disabilities Act or Occupational Safety and Health Act, they likely will lose access to unemployment benefits, unless they have a “good cause.” A good cause includes situations such as having a health issue or needing to care for a close family member who has a health issue.
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