Senate Republicans are examining offering cash incentives for unemployed Americans returning to work, as an alternative to the extension of enhanced jobless benefits supported by Democrats, reports The Wall Street Journal.
Republicans are concerned that the current $600 a week unemployment payment—on top of state unemployment benefits—is so generous that it is discouraging people from going back to work and damping the economy’s reopening amid the coronavirus panic, notes the Journal.
It’s a problem I highlighted weeks ago. See my post: Why is President Trump Bailing Out His Dishonest, Power Freak, Democratic Rivals?
A proposal is being put forth by Sen. Rob Portman (R., Ohio) to provide a temporary $450-a-week bonus for unemployed workers returning to work, on top of their wages.
Portman, according to the Journal, says his proposal is good for employees “because they can go back to work, go back to their health care and go back to their retirement savings, and yet get a nice, nice bonus for doing so.”
This is heading in the right direction from a realpolitik perspective. Of course, the sound principled thing to do from a free market direction is to end all the programs and end all the payments, immediately. That is not going to happen.
The key to Portman’s plan working is to ensure that the enhanced jobless benefits end on July 31 which is when they are now scheduled to end. If they don’t end, then many unemployed will have no incentive to go back to work and they won’t be pressuring the strict-lockdown states to end the lockdowns.
The key is to develop pressure on lockdown states to open up so that the economy can open up.
Of course, there still is the very big problem that the federal government doesn’t have the money for any of these payments and so it would require more Federal Reserve Board money printing out of thin air.