The somewhat positive unemployment numbers released Friday had Donald Trump declaring victory over the coronavirus (again) and Senate Republicans insisting they don't need to act on further assistance measures any time soon. Like not until late July, when enhanced unemployment benefits run out. Those same Republicans have been intent upon making sure that America's workforce doesn't get too comfortable and has been debating how to reduce those still unemployed to a bare subsistence level of existence.
That's shortsighted and misdirected considering a new analysis from the Congressional Budget Office (CBO), which looked at the economic impact of the extra $600 a week that has been included in unemployment benefits. That boost to family budgets is also boosting the economy, the CBO finds, and would do more of that if extended another six months through January 2021. "An extension of the additional benefits would boost the overall demand for goods and services, which would tend to increase output and employment," the CBO finds.
Sen. Mitch McConnell's Senate is an immediate danger to the people. Please give $1 to our nominee fund to help Democrats end their majority.
In fact, were those enhanced payments extended, everything happening through the end of the year would be good. About 80% of people would take home more through unemployment than they would be able to spend on housing, food, and goods and services—as much as they were spending in "normal" times. The CBO estimates that economic activity would be higher in the remainder of this year, but warns it could lower employment next year because it would provide an incentive for people not to return to work. On the other hand, all those people returning to the workplace before the coronavirus pandemic is contained by adequate testing and a vaccine could get sick and die, or bring the coronavirus home to someone else whom they'd then have to provide care for. So, yeah, maybe we err on the side of keeping people alive?
There are so many more considerations. What happens when all the businesses reopening trigger a greater spread of the virus and businesses have to shut down again? Will demand pick up enough in a pandemic for these businesses to continue to operate and employ people? How are the folks being pushed back into the workforce going to handle child care or elder care when schools and caregiving aren’t available? Cutting back pay for these people is going to cut their spending and harm the recovery. And what about all of the people who work in industries that aren't going to come back quickly, if ever?
There are alternatives other than a benefit cliff, like a gradual reduction of the expanded benefits as the economy comes back. Make workplaces safe by having adequate testing and creating and funding strong safety standards they have to meet. Make sure there are alternatives for child and family care for people returning to work. Unemployment benefits have long been recognized as one of the best, cheapest stimulus programs. During the Great Recession, economists estimated that every $1 of unemployment benefits resulted $1.64 in economic activity. A real economic recovery has to include generous and sustained unemployment benefits absent any of the other real and substantive programs Congress could implement, like monthly direct payments to everyone and payroll subsidies.
But Mitch McConnell says: "We must keep the wind in our sails, not slam the brakes with left-wing policies that would make rehiring even harder and recovery even more challenging." Left-wing policies like the ones intended to keep people alive, fed, and housed during a fucking global pandemic.