Congress May Soon Choose Between Wage Credits Or More Unemployment Benefits

Congress May Soon Choose Between Wage Credits Or More Unemployment Benefits

With the May jobless rate at 13.3 percent—an improvement over April but still terrible-- policymakers are considering many ideas to support workers

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With the May jobless rate at 13.3 percent—an improvement over April but still terrible– policymakers are considering many ideas to support workers in the COVID-19 economy.  One would continue government incentives to not work, an idea that seems crazy in normal times but may make sense today, when the pandemic still is keeping many people at home. The others would subsidize work, mostly by providing new tax breaks to employers. But each has different features and would produce very different results.

Start with the threshold question: Has the pandemic eased sufficiently that  government should encourage people to go back to work? That is the view of President Trump and many Republican governors and Capitol Hill lawmakers. 

Or, should government continue to support people who stay home from work? According to this argument, the continued lack of testing, contract tracing, and other public health measures suggest that non-essential workers should continue to stay home, even if it extends the steep slowdown in consumption and production. That’s the view of many Democrats and public health officials.

Extending unemployment benefits

For them, the simple policy response is to extend the supplemental federal unemployment benefits Congress created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Some would retain the extra $600 weekly benefit in the law, others…



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