Presently, the United State’s unemployment rate is a staggering 11.1%, marking a significant jump from the rate of unemployment at the beginning of 2020. This substantial increase in unemployment was elicited by the shutdown in the economy in the wake of the COVID-19 pandemic. Between April and June, well over 6 million Americans were filing for unemployment benefits. These individuals received an additional weekly stipend of $600. This aspect of the CARES act has drawn a fair degree of criticism with many individuals maintaining that the unemployment stimulus money stifles an individual’s desire to return to work. They base this upon the difference in wages received if they were to return to work and compare it to the sum of unemployment money. An essential worker working 40 hours a week at minimum wage in New Orleans would only make $340 whereas if that same worker were laid off, they would collect $600. This begs then begs the question: does the unemployment CARES package harm the proclivity of laid-off workers to seek work?

This is a highly nuanced question. On one hand, it would appear to be a simple solution; of course individuals would rather collect ‘free’ money than have to labor for their wages. However, upon further analysis it is clear that this question is far more complex. First is the matter of being able to qualify for unemployment. For an individual to receive money, they must first apply, then in order to actually collect the money, they must certify. The certification process stipulates that in order to obtain the money, one must be actively seeking work. Therefore, the notion that unemployment money prevents the return of individuals to the labor market overlooks the qualifications an individual must meet in order to collect the money. In some ways, the labor market benefits from unemployment stimuluses because it encourages workers to return to the workplace. Moreover, the desire to return to work is reinforced by the American standard of healthcare and retirement being tied to employment. Unemployment money does not come anywhere close to solving these issues and reinforces why people would seek a return to work.

Perhaps a more vital question to ask is why an essential worker that is performing a vital service is making less money than someone who is not contributing anything to the economy. This raises an interesting debate about the salary wage workers make. Leftists would argue that this is a clear indication that essential workers deserve a “livable” wage so they can better sustain their lives. Individuals on the right would argue in favor of decreasing the amount of stimulus money given out, noting that it would be fairer to allocate an addition 300 in lieu of the 600. Regardless of the stance an individual takes, it is certainly clear that the economy is in one of the most precarious positions in American history. We can only hope that the recession we have entered follows a V shape, and has a fast recovery compared to the U shaped 2008 recession.