Kudlow: Extra $600 in unemployment a 'disincentive' to return to work

Marco Green
June 16, 2020

With the US jobless rate still at levels not seen since the Great Depression and coronavirus-induced mass layoffs continuing across the nation, millionaire White House economic adviser Larry Kudlow complained Sunday that the $600-per-week increase in unemployment insurance authorized by the CARES Act is too generous and said the benefits should expire at the end of July.

White House National Economic Council Director Larry Kudlow told "America's Newsroom" on Monday that he thinks "the economy is going to rocket higher and higher in the summer months", even though markets were under pressure amid a resurgence in new COVID-19 infections. "And I will repeat, I think your view is right on this".

"The $600 plus-up that's above the state unemployment benefits they will continue to receive is in effect a disincentive".

"But it will not be as large and it will create an incentive to work", he said.

After talking about the ongoing impact of the coronavirus pandemic, the subject of his recent comments came up and Kudlow said, "I don't believe in systemic racism".

He said state unemployment compensation benefits would not end, They, however, typically only amount to somewhat less than half of what workers are paid and vary widely among the 50 USA states. "It's better than their salaries would get".

Josh Bivens and Heidi Shierholz of the Economic Policy Institute argued in a blog post last month that "for the goal of generating a rapid macroeconomic recovery from this shock, the more money getting into the pockets of low- and moderate-wage workers, the better".

The top Republican on the House Ways and Means Committee, Rep. Kevin Brady of Texas, has proposed a similar bonus plan, extending the federal unemployment benefits for two weeks after a person returned to work.

CNN's Jake Tapper pushed back, saying he had a hard time believing people would rather stay home than go back to work, and that for a lot of people, their jobs aren't coming back.

He said businesses and jobs are starting to come back and that the administration "doesn't want to interfere with that process". He then cited anecdotal evidence from individual businesses to back up his earlier assertion that the checks would keep people from returning to work.

Kudlow has stressed that unemployment benefits will continue.

The Bureau of Labor Statistics' latest jobs report showed that the economy gained jobs in May, although more than 40 million Americans have filed for unemployment benefits after months of lockdowns.

"I do not want to downplay or argue against the fact that it's happening, but I think it's something we have to get use to you", he said. "I think shutting down the economy could be worse for our health than not shutting it down".

Despite Kudlow's upbeat assessment of the US economy, he said the continuing number of coronavirus infections and deaths in the U.S. Some lawmakers have suggested a one-time $1,200 stipend might be paid to returning workers.

Other reports by Click Lancashire

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