In a recent survey, leading economists across the ideological spectrum were almost unanimous in saying that lack of jobs, not unwillingness to work, is holding the economy back right now. Not a single economist in the poll called for cutting fringe benefits entirely at this time.
The most prominent voices calling for cut benefits are conservative economists who have advised President Trump, including Arthur B. Laffer, Stephen Moore, and University of Chicago economist Casey B. Mulligan, a former senior economist at the Council of White House Economic Advisers.
“These benefits are not a ‘lifeguard’, but a job killer,” Moore wrote in an e-newsletter on Thursday. “Our studies find that these high benefits will mean 10 million fewer workers on the job by the end of the year, thus eliminating any chance of a ‘V-shaped recovery.'”
What is the correct level of benefits? Economists disagree.
Conservatives argue that as the economy improves, current high levels of benefits will be more damaging to both the economy and individual workers. They argue that the program should be redesigned immediately to prevent someone from earning more while unemployed, and should be further reduced as unemployment decreases.
“Especially with unemployment as high as it is likely to be this fall, you will want to reduce it as quickly as possible and avoid having the problem of serious long-term unemployment, avoiding the problem of economic scars that occur when people are unemployed for a long time. time frames, “said Michael Strain, an economist at the conservative American Enterprise Institute.
Progressives argue that there is little evidence that the most generous benefits discourage people from looking for work, and that the $ 600 a week has helped shore up a safety net that’s too stingy in normal times. Low-wage workers, who are disproportionately black and Hispanic, earn smaller benefits because the payments are based on past earnings and also tend to have fewer savings to draw on when they lose their jobs. In many states, the minimum benefit amount is less than $ 100 per week, and benefits tend to be lower in states with larger black populations.
“People with the fewest assets going into recession often face the longest periods of unemployment, have the lowest levels of savings, and then get the lowest levels of unemployment benefits,” said Sharon Parrott, senior vice president of the Progressive Budget Center. and policy priorities.
Jim Tankersley reported from Washington and Ben Casselman from New York.
