The GOP Wants to Kill COVID Unemployment Pay to Force You Into Low-Wage Jobs

Wages in the U.S. have largely remained stagnant for decades.
May 7, 2021, 7:01pm
Demonstrators rally near the Capitol Hill residence of Senate Majority Leader Mitch McConnell, R-Ky., to call for the extension of unemployment benefits on Wednesday, July 22, 2020. The benefit, created by the CARES Act, is set to expire on July 31.

Big business and the Republican Party have decided more than a year into a global pandemic that life is simply too good for unemployed people right now. 

Two Republican governors said earlier this week that they would end their states’ participation in all federal pandemic unemployment assistance, including the program that adds $300 per week to unemployment checks and another meant for gig workers and others who aren’t eligible for state unemployment. And on Friday, after the federal April jobs report showed fewer jobs created than previously expected, the U.S. Chamber of Commerce called on Congress to kill the extra $300 benefit altogether, claiming that a quarter of people receiving unemployment are making more than they did in the workforce.

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One reason why people might be making more money on unemployment: adjusted for inflation, wages have largely remained stagnant for decades. The Chamber of Commerce, however, opposes a $15 minimum wage, and has historically rejected minimum wage increases, including the 2009 hike to the present-day $7.25 minimum wage. 

Friday’s jobs report from the Bureau of Labor Statistics found that 266,000 new jobs were created in April, but the unemployment rate remained virtually unchanged at 6.1 percent. Prior estimates expected a million new jobs last month and the unemployment rate to drop to 5.8 percent. Those big expectations were due to dropping coronavirus cases and the continued success of the inoculation campaign; 57 percent of American adults have received at least one shot and 42 percent have been fully vaccinated, according to the CDC

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The U.S. Chamber of Commerce is pinning the blame for the poor jobs numbers on the American Rescue Plan passed by Congress earlier this year, which among other things, gave American adults $1,400 stimulus checks and added a $300-per-week benefit to unemployed workers on top of what they get from their states. 

“The disappointing jobs report makes it clear that paying people not to work is dampening what should be a stronger jobs market," Neil Bradley, the Chamber of Commerce’s chief policy officer and executive vice president, said in a statement. The most powerful trade group in the country then called on Congress to abruptly end the PUA, which is currently scheduled to expire September 6.

"One step policymakers should take now is ending the $300 weekly supplemental unemployment benefit," Bradley said. "Based on the Chamber's analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working."

There are other reasons why people might not be ready to re-enter the workforce. While the number of COVID-19 cases has severely decreased, the country continues to tally tens of thousands of positive tests per day, and nearly 40,000 people are currently hospitalized. And childcare remains a major issue. Education Secretary Miguel Cardona said Thursday that just over half of schools were open on a full-time basis at the end of March. 

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"If we want moms and dads to go back to work as this pandemic subsides, we need to provide them with the childcare they need,” Sen. Elizabeth Warren, a Democrat and former presidential candidate, said in a Friday statement responding to the jobs report. 

But in recent days the governors of South Carolina and Montana have taken it upon themselves to cut off federal pandemic assistance to their own workers. On Thursday, South Carolina Gov. Henry McMaster sent a letter to the state’s Department of Employment and Workforce directing the agency to end South Carolina’s participation in all pandemic unemployment programs at the end of June.

“These federal entitlements pose a clear and present danger to the health of our State’s businesses and to our economy,” McMaster wrote in the letter. “Since the Biden administration and Congress appear to have little to no comprehension of the damage being done and no appetite to terminate the federal payments, the State of South Carolina must take action.”

McMaster’s move follows a similar one by Montana Gov. Greg Gianforte, who announced earlier this week that the state would cut off access to the federal benefits on June 27 while providing a “return-to-work bonus” of $1,200 for people currently unemployed who accept a job and then complete at least four weeks of work.

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“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers,” Gianforte said.

Biden’s Labor Secretary Marty Walsh’s office denounced Gianforte’s decision earlier this week and told the AP that there was no evidence the enhanced benefits were keeping people out of work. "Choosing to eliminate these critical benefits will have the greatest impact on the most vulnerable," Labor Department spokesperson Michael Trupo told the AP. 

While big business and its allies bemoan their trouble in finding cheap labor, fewer Americans are going hungry at any other time during the pandemic. 

The nonprofit Feeding America reported in March that as many as 45 million Americans may have experienced food insecurity in 2020.

But in April, the first full month after the American Rescue Plan passed, the hunger rate among Americans plunged to 8 percent, Politico reported. That’s the lowest rate since before the pandemic, according to Politico. Agriculture Secretary Tom Vilsack credited this success to the relief package. 

“This type of support does make a difference,” Vilsack told Politico. “This is a pretty dramatic decrease.”