Treasury Secretary Steven Mnuchin defended Republicans' position on the now-expired weekly $600 federal unemployment benefit by saying there were cases where people were "overpaid." He further stated how there was also "no question" the enhanced federal unemployment benefit was a disincentive to return to work for some people. The comments sparked a discussion on Twitter, with some pointing accusing Mnuchin of not understanding the financial difficulties unemployed Americans face during the pandemic.
The CARES Act included a $600-per-week federal unemployment benefit, which went to over 30 million unemployed Americans. The program expired on July 31, with no extension approved by Washington. Republicans offered a one-week extension, but Democrats dismissed that. Instead, they want to see the program extended as part of another larger coronavirus stimulus package. Republicans have questioned the necessity of the program and have sought to cut it. Senate Majority Leader, Mitch McConnell's HEALS Act proposal, cuts the program to just $200 per week through September, when states are supposed to have a plan set up so unemployed Americans would receive 70% of their lost wages.
In his interview with ABC News' This Week Sunday morning, Mnuchin said the only reason why there was a flat $600-per-week payment agreed to in the CARES Act was due to "an emergency where we had 30-year-old computer systems." The White House wants "to fix the issue where in some cases people are overpaid, and we want to make sure there's the right incentives," Mnuchin explained. He later said there was "no question" that there were "some cases" where people were paid more to "stay home than to work," which "created issues in the entire economy."
He said yesterday that unemployment should replace wages. In no instance when I’ve collected unemployment did it fully replace wages. It’s a percentage of take home pay. So if $600/wk is giving one more, they are barely getting paid to start with.— Lisa Robinson (@LAR65) August 2, 2020
However, a Yale study found that the $600 per week benefit did not stop people from trying to find jobs. "The data does not show a relationship between benefit generosity and employment paths after the CARES Act, which could be due to the collapse of labor demand during the COVID-19 crisis," Joseph Altonji, the Thomas DeWitt Cuyler Professor of Economics in the Faculty of Arts and Sciences, said of the study. Yale researchers' study was based on data from Homebase, which produces scheduling and timesheet programs for small businesses.prevnext
"There are certain cases where we are paying more for people to stay at home than work." - Mnuchin
Easy to say when you can stay home AND work remotely.
This is a health crisis creating an economic crisis. Pushing people outside w/o a national health strategy makes both worse.— Brian Page (@FinEdChat) August 2, 2020
When ABC News' Martha Raddatz brought up the study, Mnuchin countered with a Chicago study "that goes through all the people that are overpaid." He insisted there are "cases where people are underpaid" and the main issue is "we need to come up with an agreement to extend this."prevnext
I wish that someone would point out that THERE ARE ONLY A TINY FRACTION OF JOBS AVAILABLE DURING THIS PANDEMIC. This is not anything like a normal unemployment situation so these “overpayment” discussions are ridiculous. Fact: Ppl can’t work at jobs that don’t exist anymore.— Susan Cox (@susanicox) August 2, 2020
Exactly. It’s only 31,000 a year before taxes.— Sandra Abeyta (@SandyAbeyta) August 2, 2020
Federal minimum wage: $7.25 an hour
Federal Unemployment: $15 an hour
Mnuchin, who was born on 3rd base and is worth 300 million, is afraid people on minimum wage are being overpaid. They could easily fix this problem my raising the minimum wage but they don't want to do that.— Black Chuck Todd (@BlackChuckTodd) August 2, 2020