Millions of Americans are grappling with income loss in the face of the COVID-19 pandemic and the subsequent recession it's caused. Thankfully, those who have lost a job due to no fault of their own are generally eligible for unemployment benefits, and since late March, those benefits have been doing a pretty good job of replacing lost paychecks. That's because the CARES Act, which was passed in response to the COVID-19 crisis, allowed for a $600 weekly boost to unemployment on top of the benefits workers would otherwise receive.
Thanks to that $600 boost, a lot of unemployed Americans haven't actually lost out on income in the course of being out of work. Some, in fact, have even gotten a raise on unemployment.
But it's that very scenario that's caused lawmakers to balk at the idea of extending the $600 weekly boost past July 31, when it's set to expire under the CARES Act. In fact, many worry that keeping that boost in place will discourage workers to return to a job, which will, in turn, hinder our economy's recovery. As such, a $1,200 bonus for returning to work has been floated around instead. But that solution is flawed for a couple of reasons.
1. There aren't enough jobs for unemployed Americans to go back to
An estimated 18 million Americans are out of work right now. Meanwhile, as of late May, there were 5.4 million job openings available. Clearly, those numbers don't add up. Even if every jobless American were to attempt to get back into the workforce, most would remain unemployed, and without that $600 weekly boost, those same people would face untold financial hardships.
2. Business closures could rise as more and more states lock down again
There may be millions of jobs available right now, but how many more will be lost in the coming weeks and months as COVID-19 cases surge and states have to impose restrictions in an attempt to curb the outbreak? We don't know the answer to that question just yet, but it's fair to say that as the rules get increasingly tightened, more businesses will have to change the way they operate, and some may have no choice but to close down altogether. The result? An uptick in unemployment, which means taking away that $600 boost in August could be catastrophic.
Of course, lawmakers may continue to argue that if that $600 weekly boost remains in effect, unemployment is apt to remain high for the rest of the year. But it's easy to argue that unemployment will remain high no matter how we look at it, and so we might as well help the people who are in that situation, even if they're there somewhat voluntarily. Though lawmakers insist that keeping workers home will hurt the economy, so will giving jobless Americans less money to spend. And while a bonus to return to a job may seem like a reasonable solution to the problem at hand, based on current circumstances, it glaringly falls short.