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Business owners fret that jobless benefits deter workers, but studies show otherwise.


The $600-a-week jobless benefit supplement that Congress approved in March as part of the CARES Act has been widely credited by economists with keeping the economy functioning through the coronavirus pandemic.

With the supplement, which ended in July, most unemployed workers got more than they had earned in wages; without it, they fell short of their previous income. So did the supplement simply provide a lifeline, or did it discourage people from taking jobs?

The answer has consequences for tens of millions of Americans, particularly those on the lower end of the income ladder; for businesses trying to restore their operations; and for an economy that largely depends on the lifeblood of consumer spending.

The relief is not only a matter of contention among business owners; it is also at the center of an acrimonious debate in Congress that has held up agreement on a new aid package.

With the supplement, nearly seven in 10 jobless workers got a bigger payment from the government than from their previous employer, according to one study. On its face, choosing to get more money and not work seems more appealing than settling for less and working.

That’s the way Carl Livesay, vice president for operations of Maryland Thermoform in Baltimore, sees it. Before the pandemic, the low unemployment rate made hiring a struggle, but now, even with high unemployment rates, he said, “it’s worse than it’s ever been.”

There are, of course, examples that tell a different story — millions of them. In May, June and July, more than 9.3 million workers returned to a job, forgoing the generous unemployment benefits.

One reason is that people generally look ahead. “The latest results show that Americans rationally understand the greater long-term security of returning to work rather than relying on ongoing government assistance,” said Sonal Desai, chief investment officer of Franklin Templeton Fixed Income.


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