Impact Of COVID Unemployment Benefits On Jobless Rates

It’s Saturday, January 8th, and this is your Morning Wire. Listen to the full podcast:

1) Impact Of COVID Unemployment Benefits On Jobless Rates

The Topline: In 2020 and 2021, the federal government gave jobless workers an extra $300 to $600 a week in addition to existing benefits in order to combat the forced unemployment caused by COVID-19 lockdowns. Now, a new study shows how these benefits increased the nation’s jobless rate.

Quote Of The Day: “‘…Guess what, employers can’t find workers,’ I said, ‘Yeah, pay them more.’ This is an employee’s bargaining chip now.”

– President Joe Biden, June 2021

Staff photo by Derek Davis/Portland Press Herald/Contributor via Getty Images

CARES Act

Originally, the CARES Act gave people who were unemployed during the pandemic an extra $600 a week over what they would have earned from unemployment benefits. The benefit expired in August 2020. 

The stimulus package signed by President Donald Trump in December 2020 reinstated the benefit, but reduced it to $300 a week. This bonus was scheduled to end ast September, but 25 states opted to voluntarily cut the extra benefits in June. Florida Governor Ron DeSantis (R) said he saw an immediate rebound in people looking for work with the announcement they had to start searching again.

Proponents of the extra money denied that enhanced unemployment benefits made a difference on the labor market. In May, President Joe Biden said there wasn’t evidence that people were being paid to stay home rather than work. A month later however, he acknowledged the impact the extra federal funds were having on the labor market and even seemed to approve of them. 

New Report

A paper published late last month by the National Bureau of Economic Research found that enhanced unemployment benefits significantly increased the number of people who were unwilling to work during the pandemic. 

Its authors found “the flow of unemployed workers into employment increased by around two-thirds following early termination.” 

They also wrote, “Among unemployed workers ages 25 to 54, we find that early termination is associated with a 14 percentage point increase” in moving from the unemployment rolls into a job. 

The authors say their conclusion “runs counter to the conventional wisdom that these programs had a very small or even negligible effect on unemployment.” 

Key Takeaways

Economists mainly believe the program kept people out of the workforce because they made more money from unemployment than they could from work. The Congressional Budget Office found that during the initial part of the enhancement, eight out of 10 workers made more money collecting unemployment than they would have earned from their jobs. After those benefits were reduced to $300 a week, about half of all workers still would have lost money by going to work, according to a private industry study. 

There are currently 10.6 million unfilled jobs, according to the U.S. Bureau of Labor Statistics. Almost four of every 10 able-bodied people in their prime working years are not in the labor force. A record 4.5 million people quit their jobs in November, according to Labor Department data.

Robyn Beck/ROBYN BECK/Contributor/AFP via Getty Images

2) Awards Show Postponed By COVID

The Topline: January typically means the beginning of awards show season for Hollywood, but this year, the Grammys have been postponed and the Golden Globes aren’t going to be televised.

The Grammys

The show had been set to return to a normal, in-person show on January 31st after having a socially-distanced ceremony last year, but Grammy producers began hearing from performers and nominees who are fearful of the Omicron variant and reluctant to attend the event.

For the “health and safety” of the artists they’re delaying the ceremony indefinitely.

However, the Crypto.com arena, where the Grammys were supposed to be held, has basketball and hockey games and concerts booked for months.

A slew of major awards shows that typically set the stage for the Oscars — Critic’s Choice, American Film Institute Awards, New York Film Critics Circle – have all been delayed, ostensibly due to Omicron. 

The Golden Globes

The Hollywood Foreign Press Association has been putting on the Golden Globes for 77 years, a show that has been considered less structured than the Oscars. 

Early last year, however, after 2020’s Black Lives Matter protests, the Golden Globes was criticized for a lack of diversity. The controversy grew when the organization’s  then-president responded to the criticism by emailing members an article which characterized BLM as a racist hate group.

A few weeks after that, NBC announced it wouldn’t broadcast the 2022 show. Tom Cruise even sent his three awards back to the organization.

Variety revealed a few days ago that the Globes failed to sign on any celebrity presenters.

The awards will still be handed out on Sunday at the Beverly Hilton Hotel, but who is going to be giving them out

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