The Corner

Politics & Policy

When Congress Makes Unemployment Worth More Than a Full Paycheck

Job seekers at a job fair in Uniondale, N.Y., in 2014 (Shannon Stapleton/Reuters)

The results are predictable.

“Bitter Taste For Coffee Shop Owner, As New $600 Jobless Benefit Drove Her To Close,” reads the headline at NPR.

“Restaurants’ bailout problem: Unemployment pays more,” reads the headline at Politico.

Not only were the consequences predictable, they were predicted. When congressional leaders and the White House agreed in the $2 trillion economic relief bill to increase unemployment benefits by more than $2,400 a month on top of a state’s standard unemployment benefits for four months, four Republican senators sounded the alarm that Congress would be incentivizing unemployment over full paychecks.

“You can’t have the perverse disincentive to uncouple employers and employees,” Nebraska senator Ben Sasse said at the time. He warned that the perverse incentive could lead to a worker shortage in some critical sectors, such as home-health aides.

Senator Bernie Sanders and other congressional Democrats accused Republicans of being heartless, and a Republican amendment to cap the plussed-up unemployment benefit at 100 percent of a worker’s full wage was defeated in the Senate.

Nebraska senator Ben Sasse says he will try again to fix the problem during the next phase of coronavirus relief legislation. “Bernie Sanders and the New York Times can demagogue the issue all they want, but sloppy policy is threatening to prolong real pain and suffering. We should take care of workers who lose their jobs during this crisis, and a workable compromise could be emergency unemployment benefits up to 100 percent of pay,” Sasse says in a statement to National Review. “I’ve pushed Labor Secretary Scalia to work on this problem with state unemployment agencies and, during Phase 4 negotiations, I’ll keep fighting for pro-worker, pro-recovery benefits that don’t inadvertently push unemployment higher.”


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