When the COVID-19 pandemic hit, the effects on the economy were devastating. Government officials across the country issued stay-at-home orders and shut many businesses down altogether. Over the course of just three months, more than 40 million people filed for unemployment.
In response to the pandemic, Congress expanded eligibility for unemployment benefits, suspended work search and other requirements, nearly tripled the value of unemployment benefits, and extended how long some could collect unemployment to more than 18 months. Although these provisions were meant to be temporary, Congress has repeatedly extended and expanded them— even as states have reopened their economies.
Unfortunately, these actions have stalled America’s economic comeback. Far too many individuals can now collect more in unemployment and other welfare benefits than they could earn in the labor force. And sadly, there is no motivation to move from unemployment checks to paychecks, as these benefits can now be collected for more than 18 months.