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Unemployment Insurance Is Not The Problem

Many claim expanded unemployment benefits are disincentivizing work and creating a labor shortage. In reality, these concerns are overblown or outright false, and the insurance benefits are the only thing preventing millions of people from falling into poverty.


Over the last few months, there have been increasing calls to end the expanded unemployment benefits passed in response to the COVID-19 pandemic. The 2020 CARES Act offered laid-off workers a 600 dollar bonus on top of regular unemployment insurance payments, which has been revised down to 300 dollars a week. Since the usual benefits only replace a fraction of a worker’s income, these bonuses were necessary to keep the millions of unemployed workers afloat during the pandemic. However, as the economy has crawled back from the brink, there have been more people in the government and media calling to end these expanded benefits. They claim that these benefits are actually hurting our labor market.