Yale study: COVID unemployment benefits didn’t stop people from seeking work | Wednesday Morning Coffee

July 29, 2020 7:00 am

The Department of Labor and Industry’s unemployment webpage.

Good Wednesday Morning, Fellow Seekers.

As Congress gears up to debate the new, Republican-authored COVID-19 relief package, you’re going to hear a lot of debate over whether the existing $600/weekly enhanced benefit (set to be expire this weekend) should be replaced with a far less generous plan reducing those benefits to an extra $200/week until states can implement a system that will pay out benefits based on 70 percent of a worker’s prior wages.

One of the biggest arguments deployed against the current arrangement by Republican critics (Notably, President Donald Trump and Senate Majority Leader Mitch McConnell, R-Ky.) is that the more generous arrangement is a disincentive to seeking work since some people will make more by staying home than by going back to work. It’s a variation on a decades-old GOP argument to dismantle the safety net.

But a new Yale University study, released Tuesday, knocks the legs out from under that shopworn argument, concluding that there’s “no evidence that the enhanced jobless benefits Congress authorized in March in response to the COVID-19 pandemic reduced employment. ”

If the doomsaying predictions of critics had been true, “the data should show a significant drop in employment in the week after the CARES Act took effect; it should also show subsequent decreases in relative employment as workers with more generous unemployment benefits put off returning to work. The data did not yield results that support these predictions. ”

Instead, the report concluded that “workers receiving larger increases in unemployment benefits experienced very similar gains in employment by early May relative to workers with less-generous benefit increases. People with more generously expanded benefits also resumed working at a similar or slightly quicker rate than others did.”

WASHINGTON, DC – JANUARY 23: Senate Majority Leader Mitch McConnell (R-KY) walks to the Senate floor following a recess in the impeachment trial of President Donald Trump at the U.S. Capitol on January 23, 2020 in Washington, DC. Democratic House managers will continue their opening arguments on Thursday as the Senate impeachment trial of President Donald Trump continues. (Photo by Drew Angerer/Getty Images)

In reaching their conclusions, researchers took a look at mostly small businesses that require time clocks for their day-to-day operations. The majority were bars, restaurants and retail operations, where workers earn relatively low hourly wages. And “while the data does not represent the entire U.S. labor market, it captures a segment of it that has been disproportionately affected by the pandemic,” the report notes.

And that’s the key thing to note here: While millions of workers across the country have been hit hard by the pandemic’s economic fallout, workers at the lower end of the wage scale have borne the brunt of it.

Writing for Forbes in MayShahar Ziv said Trump and Republicans weren’t even asking the right question about any disincentive to employment the expanded benefit might or might not have provided. In fact, “for the majority of Americans, there is no actual choice between collecting unemployment benefits and returning to work. This means that the question of whether benefits disincentivize work isn’t germane,” Ziv wrote.

Instead, policymakers should consider what would happen if the unemployment top-up isn’t extended (one researcher found it would result in a 50-75 percent wage cut for impacted workers), and “there isn’t enough labor demand to hire the unemployed? That answer is a lot scarier,” Ziv wrote.

Then again, this is the GOP-controlled U.S. Senate, which isn’t exactly known for playing the long game when it comes to the plight of American workers.

The Pennsylvania Capitol building. (Capital-Star photo by Sarah Anne Hughes)

Our Stuff.
With classes set to resume in weeks, school administrators and school board members told a state Senate panel Tuesday that they, too, need to be immunized against litigation if they’re going to reopen safely, Elizabeth Hardison reports.

Stephen Caruso explains how last week’s state Supreme Court ruling on an Uber driver could remake Pennsylvania’s gig economy.

With the November election less than 100 days away, a coalition of progressive groups rolled out their top legislative priorities/wish list for fall. Your humble newsletter author sat in on the Zoom Call/pep rally for that rollout.

Pennsylvania Health Secretary Dr. Rachel Levine forcefully responded Tuesday to recent transphobic attacks against her. You can read the full text of those remarks here.

In Philadelphia, the city’s public schools will reopen for remote learning, a hybrid model could follow as long as it’s safe to do, our partners at the Philadelphia Tribune report.

On our Commentary Page this morning, GOP tactics in Harrisburg and Washington will damage the court system — and our democracy, opinion regular Bruce Ledewitz argues. And new House Majority Leader Kerry Benninghoff, R-Centresketches out his vision for reopening Pennsylvania schools.

Image Source: PixaBay

State Police
 liquor enforcement officers visited bars in Philly more than 5,000 times in July, PhillyMag reports.
Pittsburgh City Paper looks at how some Pittsburgh-area school systems are planning to reopen.
As he left office, former House Speaker Mike Turzai, R-Allegheny, had plaques detailing the crimes of three, former House speakers removed from under their official portraits, where they’d hung for the last few years, PennLive reports.
The Parkland schools, in suburban Allentown, have approved a reopening plan that calls for hybrid education for some students; full-time classes for others, and an all-virtual option for those who want it, the Morning Call reports.
Luzerne County Council has rejected a proposed extension of the county’s property tax deadline. County taxpayers now have until Aug. 18 to pay their bills — or they risk a 10 percent penalty, the Citizens-Voice reports.

Here’s your #Pittsburgh Instagram of the Day:

Some Philadelphia schools will use outdoor classrooms when school resumes, WHYY-FM reports.
WPSU-FM talks to the creator of the ‘Black at Penn State‘ Instagram page, and what it means for students.
The Pa. House and Senate remain in the ‘lean Republican’ column for November, the Cook Political Report says (via PoliticsPA). explains why all-virtual learning will make the achievement gap worse.
Roll Call 
has what you need to know about Bill Barr’s pugilistic outing before the House Judiciary Committee on Tuesday.

What Goes On.
The House Democratic Policy Committee meets 10 a.m. in G50 Irvis.

What Goes On (Nakedly Political Edition).
State Sen. Dan Laughlin, R-Erie, holds a 5 p.m. reception at The Schoolhouse in Fairview, Pa. Admission runs $150 to $1,000.

You Say It’s Your Birthday Dept.
Best wishes go out this morning to PennLive Opinion Editor Joyce Davis, and to our high school classmate and former hockey linemate, Hank Butler, of the Pa. Jewish Federation, both of whom celebrate today. Congrats and enjoy the day.

Heavy Rotation.
Here’s one from Sam Smith that popped up on Tuesday night. It’s ‘Money on My Mind.’

Wednesday’s Gratuitous Baseball Link.
Pittsburgh beat Milwaukee 8-6 on Tuesday night. The Marlins-O’s game is postponed — of course.

And now you’re up to date.

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John L. Micek
John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.