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Jobless Benefits Too Generous? Debate Is Reignited

Critics say Biden's relief package encourages people to stay home; not so, say defenders
By John Johnson,  Newser Staff
Posted May 7, 2021 1:04 PM CDT
Updated May 7, 2021 1:16 PM CDT

(Newser) – The new monthly jobs report came in way below expectations on Friday, with employers hiring 266,000 people in April instead of the 1 million or so expected by analysts. The report has reignited a familiar political debate amid the pandemic, with those on the right arguing that President Biden's relief package is so generous that it encourages people to stay home instead of getting a job. Defenders of the aid, however, say it's not that simple. Coverage:

  • Chamber's view: The US Chamber of Commerce on Friday came out firing after the unemployment report, reports CNBC. “The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market,” it says. The chamber urged lawmakers to end "the weekly $300 weekly supplemental unemployment benefit," asserting that 25% of those receiving it are making more money than they did when working.

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  • Not so fast: The argument that extra benefits encourages people to stay home has been circulating for a while, and last month in the Los Angeles Times, business columnist Michael Hiltzik argued that it doesn't hold water. "Economists have consistently debunked the idea that unemployment insurance benefits suppress job searching," he writes. Those who say otherwise are citing anecdotes, not data, he adds.
  • Other factors: Earlier this week, the Wall Street Journal dug into the issue of employers struggling to find workers, and the story cited a number of factors based on surveys. For one thing, people are afraid of getting COVID, especially in high-traffic places such as bars and restaurants; others cite child-care issues, because businesses are opening faster than schools.
  • One example: But the story notes that the extra unemployment benefits appear to be playing a role as well. The story quotes a concert promoter who wants to return to work in his own field and is avoiding taking other jobs because his $750 in weekly benefits makes that possible. “I really enjoyed what I did,” he says. “If the government is going to pay you to stay home, you’re going to do that unless that job you really want comes along.”
  • Biden vs. McCarthy: Expect the issue to intensify. Biden himself defended his rescue package on Friday in the wake of the jobs report, notes the Hill. "Help is here and more help is on the way and more help is needed,” he said. In contrast is this tweet from House Minority Leader Kevin McCarthy. “Today’s jobs report is a disappointment—just like President Biden’s plan to burden families with more taxes & more debt,” he wrote. “While Dems trap people in a cycle of fear & pay them NOT to work, it’s clear the best thing to do is end the crisis-era policies & get Americans back to work.”
  • Eye on the states: States may make their own moves. Montana, for example, plans to start offering bonuses to people who return to work, reports KRTV. It also plans to opt out early of the federal program that provides extra benefits—by the end of next month instead of September.
(Read more unemployment stories.)

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