BREAKING: 2.3 million workers file for unemployment as COVID-19 surges; Trump and Congress must extend emergency unemployment benefits

July 23, 2020

Cutting emergency benefits to $100 per week, as some Republicans are proposing, would cause massive economic disruption and cost 4.25 million jobs

Today, following the release by the U.S Department of Labor of weekly unemployment claims showing that another 2.3 million workers have filed for unemployment benefits last week, with a total of 34 million workers currently receiving or having applied for benefits, Groundwork Collaborative released the following statement and background making the strong case for Congress to move quickly to address the unemployment benefits cliff that is set to hit families and the economy next week.

“Not only would it be morally reprehensible for President Trump and his conservative allies to cut the income of 30 million families during a pandemic, it would also be devastating for an economy that is already severely damaged and heading in the wrong direction,” said Michael Linden, Executive Director of Groundwork Collaborative.

“Congress enacted this critical lifeline to support families and keep the economy going while it wasn’t safe for workers to get back on the job and the rationale for these unemployment benefits has only gotten stronger as COVID-19 has surged in recent weeks. Congress must move quickly to do the right thing for families and the economy and extend these expanded benefits until this crisis is finally truly over.”

Background on the economic impact of unemployment proposals (based on analysis from EPI)

Extending the $600 UI benefits through the middle of 2021 would provide an average quarterly boost to GDP of 3.7 percent and boost employment by 5.1 million jobs
Cutting that by any amount will reduce consumer spending and catalyze additional job loss in an already fragile economy
Cutting to $400 per week would cause a 1.2 percent average quarterly reduction in GDP and cost 1.7 million jobs
Cutting it even further to $100 per week, as some Republicans are proposing, would cause a quarterly reduction in GDP of 3% and cost 4.25 million jobs.

FACT CHECK – GOP claims that expanded unemployment benefits disincentivize work: FALSE

There is no evidence that UI slows hiring. In fact, evidence shows UI recipients more intensely search for work and have better job search outcomes
Conservative claims are observably false: We added five million jobs in June and five million people went back to work and there are five job seekers for every open job
Slate: “The GOP’s One Big Excuse for Cutting Off Unemployment Benefits Isn’t Even True
Brookings: “We find no evidence so far in support of the view that high UI replacement rates drove job losses or slowed rehiring substantially.”

Voters strongly support extending expanded UI and would prefer to vote for candidates who support it.

Voters overwhelmingly support policies to automatically increase UI when there is an increase in unemployment, with 80 percent in support and only 19 percent opposing
Even majorities of Republicans and Independents, at 53 percent and 54 percent respectively, want to extend the $600 boost past the end of July
Voters reject the conservative argument that UI disincentivizes work. Instead, 65 percent of survey respondents agreed with the statement that expanded benefits “help the economy by boosting consumer spending and keeping businesses and communities afloat.”

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