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Giving Compass' Take:
• Dylan Matthews, at Vox, summarizes one expert's opinion on formulating a contingency plan for when United States' pandemic unemployment insurance expires.
• What can we do to impact change in public policy during the pandemic? How can we reevaluate the current unemployment plan to address the needs of marginalized communities?
Arguably the most important economic measure the United States has undertaken during the coronavirus pandemic goes by the unassuming title, “Federal Pandemic Unemployment Compensation” (FPUC).
It is no exaggeration to say that FPUC is the main force keeping our mass unemployment crisis from becoming a humanitarian disaster. There’s only one problem: FPUC is set to expire at the end of July. And given that there is concern from the program’s skeptics in the Republican Party that such a generous unemployment check will deter people from returning to work, the chances of the program being renewed are pretty slim.
Enter a new idea from Ioana Marinescu, an economics professor at the University of Pennsylvania. She thinks letting the program lapse would be a big mistake. But she’s also sensitive to concerns that enhanced unemployment benefits can deter people from going back to work. So she has a bold idea for reforming PUA: converting it into a basic income-type program for people who’ve lost their jobs. Such a change would support workers who’ve lost jobs, pump more stimulus into the economy, and mitigate some of the work-disincentive effects of the bulked-up UI program — all for a pretty manageable sum of $237 billion.
The UPenn economist is an expert on the economics of cash transfer programs and particularly on the question of whether people will stop working if they get cash with no strings attached.
“A re-employment bonus is less generous in its amount and is conditional, so the effect on both stimulus and employment is likely to be lower,” Marinescu told me. But, she adds, “If Republicans are willing to go for a re-employment bonus, my solution would be a compromise that would also appeal to Democrats.
Read the full article about pandemic unemployment insurance by Dylan Matthews at Vox.