Unemployment Insurance (UI) was established in 1935 to provide unemployed workers with temporary, partial wage replacement and stimulate the economy. Mike Gallagher, Ron Johnson and most Republicans claim they can’t support the coronavirus relief bill because they fear the additional $600 per week paid to the unemployed will encourage them not to return to work.
UI’s key parameters – the percentage of wages replaced, and minimum and maximum benefits – vary by state. Wisconsin ranks 38th in the level of benefits paid – a meager 35 percent of qualified workers’ wages paid for a maximum of 26 weeks. The minimum benefit paid in Wisconsin is $54 per week – 11 percent of the poverty line for a single person. Wisconsin’s maximum benefit is $370 per week. Wisconsin does not pay an allowance if the unemployed person has dependents.
To state the obvious, UI is not overly generous. Those for whom the additional $600 means less income if they go back to work are the poorest paid, and many also lost their health insurance with their job.
The $600 provides the unemployed with additional encouragement to comply with the stay-at-home order while providing a demand-side economic stimulus, temporarily propping up consumption.
Contrary to Gallagher’s, Johnson’s and most Republicans’ musings about how low-income workers might act, several state-of-the-art analyses reached the same conclusion as a Yale University study (tobin.yale.edu/sites/default/files/files/C-19%20Articles/CARES-UI_identification_vF(1).pdf): “Workers facing larger expansions in UI benefits have returned to their previous jobs over time at similar rates as others. We find no evidence that more generous benefits disincentivized work.”
Disregarding the fundamental fact that people who voluntarily choose not to return to work are ineligible for UI, and rather than looking to experts for answers, Gallagher and Johnson choose to enable Trump to continue spinning his web of distrust, unfounded fears and lies. Amanda Stuck endorses continuing the $600 booster. Restoring effective leadership starts with replacing Gallagher with Stuck.
Sister Bay, Wisconsin