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Against Prolonged Unemployment Benefit Supplements
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House Democrats’ proposed $1.9 trillion stimulus bill includes a weekly pandemic unemployment benefit supplement of $400 per week through August 29. The generosity and duration of that uplift is a mistake it will restrain an employment recovery through 2021 by disincentivizing returns to work.
Democrats cite recent studies which suggest that the $600 supplement introduced at the height of lockdowns in 2020 did not much harm job findings. The level of benefits then was truly massive: the median unemployed recipient obtained 145 percent of their previous wage income from unemployment insurance, with a full 76 percent of those eligible making more unemployed than in their previous job. So, they say, if that benefit didn’t appear to have a big effect on job take-up, why not a $400 supplement through August this year? ....

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