The U.S. Chamber of Commerce begged Congress on Thursday to scale back the $600 weekly unemployment benefit bonus it has been giving to U.S. workers. The nation’s top business trade association said the benefits included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act were undermining the economic recovery by discouraging people from seeking work.
In the letter to Senate Majority Leader Mitch McConnell and House Speaker Nancy Pelosi, Tom Donohue, the Chamber’s CEO, pointed to a study indicating that two thirds of the beneficiaries were earning more in unemployment than they made prior to the COVID-19 outbreak.
“Compensating someone more for not working than they can earn working discourages work, makes it harder for employers to bring back furloughed employees, and ultimately holds back economic recovery,” Donohue said.
He added, however, that the economy had not yet recovered to a point where completely eliminating the unemployment benefits could be done without causing a negative shock. He suggested instead that lawmakers scale back the benefits to somewhere between $200 to $400 a month, based on the workers’ previous wages.
The Chamber is the nation’s leading business trade association and represents the consensus view of most businesses. It is significant that it views the benefits as an obstacle to the recovery, since the benefits are not money being taken directly from companies. These are tax dollars going to private individuals who can turn around and spend the money on businesses. The fact that the Chamber is warning that this has created a serious drag on the economy indicates that its members are beginning to have trouble getting people to come back to work. Hopefully, lawmakers will remember this if they produce another aid package.