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Do the additional $ 600 in federal unemployment benefits really deter people from returning to work?



When lawmakers negotiate another mass debate coronavirus relief account, one of the main areas of debate is whether the additional $ 600 in federal weekly unemployment benefits that millions of Americans are going to reshape during the crisis is actually discouraging them from returning to lower – paid jobs. Some Republican lawmakers have called for cuts in benefits, arguing that the cuts will encourage people to return to the job market and accelerate economic recovery.

However, some experts argue that such concerns are wrong. A study by Yale economists in July found no “evidence”

; that people who have recently lost their jobs choose to lose their jobs because of sweetened federal unemployment benefits. In fact, they added: “Employees facing bigger ones [unemployment] Expansion usually seems faster than others, not slower. “

Meanwhile, Republican lawmakers and the Trump administration want to cut $ 600 in weekly unemployment benefits to $ 200 a week, the Washington Post reports. The lower benefit will provide a financial bridge until states can set up their unemployment schemes to give workers 70% of the income they earned before they lost their jobs, The Post added. Weekly benefits of $ 600 are due on July 31, when in March. The Coronavirus Aid, Assistance and Economic Security Act will be enacted.

The debate over unemployment benefits is on the rise as the country’s unemployment rate remains at its highest since 1948, when the federal government began to follow. With 25 million people accumulating unemployment, extended benefits have been offset by the fact that many of them have remained afloat and fall into poverty – permanent state aid without work usually replaces simply from one-third to one-half average weekly earnings of employees.

At the same time, the extra $ 600 in wages has become a stuck part for some Republicans, who are concerned that a generous benefit could actually hinder economic recovery if employers can’t find workers willing to give up their unemployment benefits.

“We want people to get back to work,” White House economic adviser Larry Kudlow told reporters on Monday. “And we don’t want to create an incentive to work, so we created a technical formula that would give you 70% of your salary” before firing an employee.

Earn more without work

Of course, some employees earn more than they did while working, that is, two-thirds. This is stated by experts at the University of Chicago in May. Studies have found that one in five redundant workers could earn twice as much lost wages through a supplementary unemployment benefit.

While some individuals may choose to collect unemployment rather than return to work, this does not appear to be the case. About 7 in 10 people who returned to the workforce in May received more unemployment benefits than they did while working, Ernie Tedeschi, an economist at Evercore ISI, told Yahoo Money.

Working adults can return to work instead of accruing benefits for one simple reason: People who offer “suitable” job offers are barred from receiving unemployment. This includes workers who have been furious and whose employer is asking them to return to work, Yale economists note.

Their study analyzed data from Homebase, which offers scheduling and scheduling software, for small businesses, many of which work in the restaurant, fitness, and other sectors hit by the pandemic. They noted that many of these workers earn low wages, suggesting that incomes are most likely to increase from increased unemployment benefits.

However, research shows that higher wages for the unemployed “did not deter workers from returning to work over time,” economists wrote. “We see that our results do not necessarily mean that there are no such answers – rather, they show that we need to expand [unemployment] generosity has not reduced overall employment ”.




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