Patriotic Millionaires: Unemployment benefits saved our economy –– don’t let them expire

As COVID-19 infections surge across the U.S. while falling almost everywhere else in the world, our lawmakers seem intent on acting like this pandemic is simply over. Right now, congressional Republicans are plowing ahead with plans to let the additional $600-dollar boost to state unemployment benefits expire at the end of July. If we allow this crucial aid to expire, we will be dooming millions of vulnerable workers and our economy to financial ruin.

The weekly $600-dollar bonus to unemployment insurance has been one of the most progressive and crucial benefits to come out of the congressional CARES stimulus package. The cash infusion was designed to supplement 100 percent of the wages of unemployed Americans, unlike the baseline unemployment benefits that are designed to provide subsistence funds and little more. In some cases, two-thirds of eligible workers essentially received a raise, as their benefits surpassed their previous income.

Alas, nothing keeps a conservative awake at night like the thought of a poor person collecting one more penny from the government than they think they deserve. The belief that direct payments are “preventing people from returning to work” is why Mitch McConnell and the rest of the GOP are fully intent on letting the unemployment boosts expire at the end of July, rather than renewing them in the forthcoming congressional aid package. Yet, the evidence from the aftermath of the Great Recession reveals that extended UI benefits had little or no effect on whether a worker found a job — meaning it wasn’t UI benefits that were keeping workers out of work — it was a lack of demand for workers.

The extra $600 has been by far the most effective part of our economic policy response to the coronavirus shock. It is likely improving — not degrading — labor market efficiency, and we should build on it. The reason for this program’s success is exactly the reason it’s drawn such ire from conservatives –– for the first time in decades, millions of Americans are no longer making poverty-level wages and are able to afford necessities and a bit more.

If it wasn’t for these payments, we would be in far worse shape as a country than we currently are. Our economy is no longer on a trajectory toward total ruin, but it is still a long way from a total recovery. Unemployment has begun to slightly decrease, although it’s much slower for people of color, and while coronavirus cases are falling in the Northeast, they are skyrocketing across the Sunbelt. The cash infusions allowed people to keep spending, even if moderately, to avoid defaulting on major bills like utilities, rent and groceries. If we were to suddenly pull the rug out from underneath millions of workers across the nation, the results would be catastrophic. The extra $600 has been instrumental in preventing this catastrophe.

Our economy runs on consumer spending, and if the majority of consumers fall into poverty because of the absence of additional aid, then our economy will likely plummet. This means everyone would suffer, from those at the top like me, to the working poor who are currently living on the edge. We need to continue these benefits until the economy begins to recover in earnest, ensuring people have enough money to infuse their local restaurants and other small businesses with the cash they desperately need to keep their doors open. Giving money directly to those who need it is the easiest and most efficient way to deliver aid across our economy.

Around the world, the countries that are successfully beating COVID-19 have two things in common: they closed all nonessential businesses and fully compensated workers to stay in their homes. We did the opposite. We hastily reopened our economy and forced workers into the horrible dilemma of either returning to work during a global pandemic or allowing unemployment benefits to lapse.

Now, cases are rising again, and the only way forward is clear, government aid that goes directly into the hands of the consumers that drive our economy forward. Anything less and we risk total disaster for our economy and our citizens. I ask that Congress make the right choice in the coming negotiations and fund our recovery, not ensure our downfall.

Rich Boberg is a retired tech entrepreneur and investor from Silicon Valley and a member of the Patriotic Millionaires. Proud “traitors to their class,” members of the Patriotic Millionaires are high-net-worth Americans, business leaders and investors who are united in their concern about the destabilizing concentration of wealth and power in America. The mission of The Patriotic Millionaires organization is to build a more stable, prosperous and inclusive nation by promoting public policies based on the “first principles” of equal political representation, a guaranteed living wage for all working citizens and a fair tax system.