Larry Kudlow, the top economic adviser for the administration, said Tuesday that the White House is examining a proposal by Republican Sen. Rob Portman of Ohio that would incentivize jobless workers to return to employment by giving them a weekly bonus.
“It’s something we’re looking at very carefully. Sen. Portman has a good idea,” Kudlow told Fox News.
Portman’s proposal would provide a $450-a-week bonus for individuals who return to work. This amount would be in excess of the salaries or wages they receive and is meant to counter the $600 pandemic payment boost to unemployment benefits that has proven in some cases to be too lucrative, prompting some unemployed workers to remain jobless.
On average, unemployment benefits across the country were $385 per week in February 2020, according to the House Ways and Means Committee. When combined with the added benefit, jobless workers receive nearly $1,000 a week. The median salary for a grocery store cashier is roughly $600 a week, according to Salary.com.
Doug Rike, a 25-year-old cook who worked at the Upland Brewing Co. in Bloomington, Indiana, recently told the Washington Examiner that he receives more money collecting unemployment benefits than he earned at his job. He said that he would wait to begin looking for work until after his benefits expire so that coworkers who are facing more dire financial hardship can return to work first.
More than 60% of jobless workers receiving the $600 payment collect more from unemployment benefits than they earned working, according to research by the American Action Forum, a right-leaning D.C. think tank, and the University of Chicago.
Further, the bottom 20% of wage earners are making, on average, double what they made in the workforce because of the $600 payment, according to Portman’s office.
“I would propose that instead of keeping in place the additional $600 of the federal benefit for people on unemployment between now and July 31, let’s shift some of those federal dollars to a back-to-work bonus,” Portman said when he introduced his plan on Wednesday.
The House approved a measure on May 15 that extends the $600 payment to Jan. 31, 2021, for most unemployed workers. Senate Majority Leader Mitch McConnell, a Kentucky Republican, has stated that he opposes prolonging the payment.
Kudlow does not think the $600 payment will be extended in the next coronavirus relief package and instead believes that some other proposal will replace it.
“I frankly do not believe the $600 plus-up will survive the next round of talks, but I think we’ll have substitutes to deal with that issue,” he said, adding that President Trump is a “firm supporter of the payroll tax holiday to year-end for the worker side.”
