Unemployment Recipients Might Not Be 'Overpaid' After All
One of the top talking points in the Capitol Hill debate over unemployment benefits might be wrong.
Most unemployment claimants are probably earning less on unemployment than they did at their previous jobs, according to a new data analysis by the liberal advocacy group Groundwork Collaborative and the National Employment Law Project.
A previous study by University of Chicago economists found that more than two-thirds of unemployment claimants received more in benefits than they did from work, thanks to an extra $600 weekly payment Congress created in March to help people who lost jobs because of the coronavirus pandemic.
The extra $600 expired last week, and lawmakers are at an impasse over whether to replace the supplemental payments, which topped off workers’ ongoing state-funded jobless pay.
Republicans think $600 is too much, and they have repeatedly cited the University of Chicago study.
“According to studies that have been done, including by the University of Chicago, about 68% of the people on unemployment insurance are making more money on unemployment insurance than they were making at work,” Sen. Rob Portman (R-Ohio) said Tuesday on the Senate floor.
Treasury Secretary Steve Mnuchin, one of the lead Republican negotiators on the next big pandemic relief bill, also cited the University of Chicago study on Sunday in an interview in which he lamented that jobless claimants are “overpaid.”
There’s no question that some percentage of laid-off workers received more in unemployment than from work. The Chicago study’s findings have been echoed by the Congressional Budget Office and a great many anecdotes from employers and employees themselves.
The new paper, by Groundwork Collaborative’s Marokey Sawo and the National Employment Law Project’s Michele Evermore, similarly compares unemployment payments with what workers likely earned in their previous jobs, according to industry-level wage compensation data. The big difference,...
