Posted on by Brendan Birth

The Real Issue Exposed by the Unemployment Benefits Debate in the United States

There’ve been some studies suggesting that many Americans that were on unemployment benefits with the old amount (which included the $600 a week enhanced unemployment benefits)—maybe even close to 70% of Americans on unemployment benefits—were receiving more money from their benefits than from the jobs they used to hold.[1] That seems to be why the matter of unemployment benefits became such a contentious debate.

Those advocating for less generous unemployment benefits during COVID believed that the issue was with the benefits being way too large, to the point of potentially dissuading some from seeking work. I’d argue, though, that the issue is misdiagnosed—the issue is that so many employers are so outrageously cheap that the bar for “generosity” has been set so low.

Consider the fact that an American on unemployment benefits was receiving, on average, $921 a week.[2] That amounts to $47,892 if you extend that for an entire 52-week year—an amount still low enough that it would not cross the threshold to a living wage for a family of three in even the most affordable states in America.[3] In other words, individuals were (on average) receiving less than the equivalent of a living wage, and that was still more generous than what most Americans on unemployment benefits were receiving from their previous employers. Considering that fact, the issue is that most employers of these former employees did not think their employees were worth enough to pay them a living wage, so that employees can easily afford rent, groceries, utilities, and many other basic items. Full stop.

The systemic issues that have led to such low wages for so many Americans may take years, if not decades, to address (if they get addressed). In the interim though, we should stop saying that unemployment benefits were “too generous”—instead, many former employers were not generous enough.

[1] https://fivethirtyeight.com/features/many-americans-are-getting-more-money-from-unemployment-than-they-were-from-their-jobs/

[2] https://www.cnbc.com/2020/07/30/the-600-unemployment-boost-is-almost-over-for-some-their-aid-will-fall-93-percent.html

[3] https://www.cnbc.com/2019/03/04/map-shows-what-a-living-wage-would-be-in-every-us-state.html

20 Replies to “The Real Issue Exposed by the Unemployment Benefits Debate in the United States”

  3. Hi Brendan. This worries me. There are so many unemployed and benefits drying up…what happens then? I’m afraid that families will simply not have enough food or money to pay the rent. I continue to watch from afar…stay safe.

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  4. Hello Brendan. I have been reading some interesting articles on this subject, such as your post. One thing I would point out that 600 a week comes to 2,400 a month. That breaks down to $15 an hour for an employee paid by the hour. I think that is one reason the Republicans are fighting this so hard. The Republican view is government should only serve the wealthy and business, but never work for or serve the workers. By keeping workers in a desperate struggle to survive businesses can force workers to work in bad conditions and for horribly low wages. By keeping workers insecure in having the basics business stay in charge of the terms of working, but if workers had security then the workers would be setting the terms that business have to meet. That is why unions worked and why Republicans have worked so hard to destroy them. Hugs

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    1. My understanding was that it was $600 a month in addition to other benefits. Be that as it may, I think that questions do need to be asked of why these benefits are wrong and the likes of Bezos making billions during the pandemic is somehow okay.

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  5. The low wages of working Americans is or should be criminal. How can you pay your full-time worker a wage that requires them to get at least one more job to live? Healthcare as a “job benefit” is another issue, if they lose their job they lose their insurance, even if they get another one within 2 weeks to a month people usually have to wait anywhere from a month to six months for it to kick in. Maybe companies could pay a better wage if they were not paying for at least part of the health insurance? Questions like this should be keeping people up at night. Unfortunately it won’t keep the right ones up.

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    1. And these are all good and important questions. For me, I personally think answers to a lot of these questions lead back to the thought that we want to get as much out of workers as possible for as little money as possible.

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  8. This is the point, isn’t it. This is what Labor Day is all about. (Mind you I am the child of a labor organizer and my partner is the Boston steward of his union) Workers have been effectively disempowered for so long.

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  9. I’m retired and most of my living expenses are stable, but there is one thing that does upset me. I have noticed that since March, some grocery stores have increased their prices 3 times more. Feeding only myself, I can’t imagine anyone with a child being able to afford grocery now. That $600 will go from their hand, to the grocery store’s hand.

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    1. Yes, groceries are one of those items that has become increasingly tough to afford in many areas. Including my area, for some time. It makes for a double whammy: it’s tougher to keep work, but also more expensive to cover basic living expenses.

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