Thomas Gallatin / June 17, 2021

Unemployment Pays How Much?

In 21 states, individuals on unemployment can pull in $25 an hour.

There are 9.3 million job openings currently in the U.S. labor market. In other words, there are plenty of jobs to be had for anybody seeking one. But that’s just the problem — few people without jobs are seeking work.

The catalyst for this particular situation falls primarily at the feet of the federal government with its overly “generous” COVID unemployment benefits. The federal government’s “temporary” $600 per week unemployment supplement — in addition to existing state-level unemployment payments — has effectively disincentivized working for a living. Yet it might be even worse than anyone knew, at least according to a newly released study from the Committee to Unleash Prosperity.

The study highlights include some doozies:

  • In 21 states and DC, households can receive wage equivalent of $25 an hour in benefits with no one working.

  • In 19 states, benefits are equivalent to $100,000 a year in salary for a family of four with two unemployed parents.

  • In all but two of the blue states, $300 Supplemental Unemployment Insurance benefits plus other welfare pay more than the wage equivalent of a $15 minimum wage.

According to University of Chicago economics professor Casey Mulligan and Texas Public Policy Foundation economist Stephen Moore, “It is now nearly beyond dispute that supplemental unemployment benefits are reducing employment.” Moreover, they assert, “If Congress or the remaining states were to suspend the weekly benefit supplement, several million more workers would gain employment over the summer months.” Which is precisely what the economy needs.

Incentivize working via income, and people will go find jobs; incentivize not working by giving government payouts, and people will sit at home. That in turn means they become a drag on the economy while at the same time ensuring that the cost of living goes up for everyone. Never mind the ever-growing national debt. Other than that, what’s not to like?

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