Progressives lament upcoming expiration of ultra-generous unemployment benefits that pay more than work

FEE's Brad Polumbo writes, "Should unemployment welfare pay more than your typical job? Those familiar with the basic economics of how incentives work would say no. So would anyone with moral objections to taking wealth from others to finance others’ idleness. But with the federal supplement to unemployment benefits set to finally end on Sept. 6, some progressives are raising the alarm.

For context, the program in question is a federal expansion of pre-existing state-level unemployment benefits. The expansion was originally passed at the height of the pandemic, in March of 2020. The expansion extended unemployment benefits to millions of new workers, such as gig economy workers and the unemployed. It also added a $600/week supplement—later reduced to $300/week—on top of what state-level benefits already paid. (Existing benefits vary state to state, typically from $200/week to $600/week). This expansion meant that many workers could earn more on welfare than they could from their regular jobs. Indeed, one study found that in dozens of states the average unemployed household could earn the equivalent of $25/hour on weekly benefits.

This creates a clear work disincentive."

Read the entire column.