Included in the massive $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act is a new unemployment benefit which could unintentionally delay America’s economic recovery from the coronavirus crisis. The new benefit — an unemployment check increase of $600 per week — is being distributed atop existing state unemployment insurance (UI) benefits. This will result in many laid off workers receiving more money in unemployment checks than in their previous or future paychecks. That increase may already be encouraging layoffs as employers recognize “most [employees] will be better off receiving government assistance." It could also tempt many of those who are now sidelined to not return to work even as parts of the economy start to reopen.
Especially for those who fear they could be risking their health by returning to work, that temptation already will be strong. And it’s hard to blame them. But, as explained by Sen. Ben Sasse (R-NE), the broader effect could be to cripple supply chains in critical sectors Americans depend on — whether health, food prep, or delivery. As a laid off bartender noted recently when discussing the possibility of starting work at a grocery or big-box store, “Coming home and infecting my family [is] … not worth a $13-an-hour job.” That’s especially true when the government is offering effectively an extra $15 per hour unemployment benefit (that is, $600 per week divided by 40 hours), on top of regular UI benefits. Sen. Sasse tried to even things out by capping the combined unemployment benefit at no more than an individual’s prior wages, but his amendment was defeated, and the $600 weekly supplements are law, for now, through the end of July.
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