U.S. Sen. Rob Portman, R-Ohio, has proposed giving people who return to work following the COVID-19 pandemic $450 a week on top of whatever wages they earn.
“The idea is to have a bonus,” Portman said in an interview with CNBC’s Kelly Evans. “Right now, as we just saw with your stock market report, the economy is starting to reopen, and that’s good. But to have a robust economic recovery that we all want, we’ve got to encourage people to go back to work.”
Portman cited studies showing some workers are making more money on unemployment than they would on the job.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which President Donald Trump signed into law on March 27, included a federal supplement of $600 to state unemployment insurance payments. The additional funding expires on July 31, but Democrats in Congress want to extend the benefit.
Research from American Action Forum indicated 63 percent of workers nationwide make more on unemployment with the federal supplement than at work. Even if the supplement dropped to $100 a week, 25 percent of the workforce nationally would still make more on unemployment than at work, according to the organization.
“For the bottom 20 percent of wage earners, they’re making on average double what they made in the workforce,” Portman said. “So what I’m hearing from small business folks all around the state of Ohio is, ‘Hey, we’re getting ready to start to hire some people and we would like to reopen, but we’re having a tough time getting our employees to come back and to find new employees.’
“So the idea here is not to say that people shouldn’t be getting help if they lost their job, and through no fault of their own, a lot of people did,” Portman added. “But instead to say, hey, if you’re on unemployment insurance and you want to go back to work, you can get a bonus to do that so our bonus at $450 comes out of the $600 per week and the idea is that that $450 is enough to make it … fair for people who are on minimum wage, as an example.”
The idea has drawn interest from Larry Kudlow, director of the National Economic Council.
“It’s something we’re looking at very carefully. Senator Portman has a good idea. He understands incentives and disincentives,” Politico quoted Kudlow as telling Fox News Channel. “The trouble with the $600 plus-up, and maybe we needed it in that emergency period, but frankly it’s a major disincentive to go back to work and we don’t want that. We want people to go back to work.”
