Donald Trump is looking to replace the $600 a week Pandemic Unemployment Benefit with a back-to-work bonus that will incentivize working for many of the 30 million people currently receiving the enhanced benefit. The benefit is set to expire July 31 and Democrats want to expand it into next year.
A study done by the Federal Reserve found that the federal unemployment benefit was making it difficult for companies to hire workers as the economy reopens following the lockdown.
Even though the unemployment rate is expected to register over 20% for May in the jobs report the Bureau of Labor Statistics will release June 5, employers reported difficulty in hiring during the severe economic contraction resulting from the coronavirus shutdown.
“Contacts cited challenges in bringing employees back to work, including workers’ health concerns, limited access to childcare, and generous unemployment insurance benefits,” the Beige Book summary said.
That $600 a week is on top of state unemployment benefits that some states have also expanded. The bottom line is, workers are asking themselves why go back when I’m making more money sitting at home?
In particular, the various Fed districts noted the impact of expanded unemployment benefits, including the extra $600 a week under the Cares Act.
“Some businesses have already made efforts to recall laid off workers, as well as hire new workers. A number of these firms noted that this has been challenging, with many unemployed workers reluctant to return to work—some attributed this to generous unemployment benefits, as well as safety concerns,” according to the New York Fed.
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