The Central Talking Point About the Next Stimulus Bill Is Wrong | Opinion

As lawmakers debate what the next stimulus bill will look like, one central argument has been getting the most attention: that the bill must not pay workers more to stay home than they were making at work. As Treasury Secretary Steve Mnuchin put it, "We want to incent people to go back to work."

With that argument leading the way, many Republican lawmakers are pushing to end a federal provision that allows workers to collect up to $600 more per week than they usually would under unemployment. As Newsweek reported, Sen. Rand Paul, R-Ky., "described the choice to give some people more money not to work was a 'terrible, terrible, terrible idea and never should have passed in the first place.'"

The belief that most people receiving these payments are financially incentivized to stay home is the inevitable result of a spate of recent headlines. Dozens of stories proclaimed that two-thirds of laid off workers are making more money by remaining on unemployment. The stories cited a working paper by three University of Chicago professors. "We find that 68 percent of unemployed workers who are eligible for UI will receive benefits which exceed lost earnings," the researchers wrote.

Unfortunately, this claim is misleading—something that only a discerning reader who looks into the fine print would discover.

In coming up with their figures, these professors looked only at wages, while ignoring benefits. Benefits make up about a third of what benefits-eligible workers receive from their employers. The latest figures from the Bureau of Labor Statistics show that wages and salaries account for 62 percent of employer costs for employees, while the remaining 38 percent goes toward benefits.

Millions of full-time workers were already just barely getting by even before COVID-19 hit. Now, millions who lost their jobs also lost benefits, including employer contributions to health insurance. They're currently facing the astronomical costs of paying for insurance out of pocket, including through COBRA (the Consolidated Omnibus Budget Reconciliation Act), which can cost more than $20,000 a year, for a family of four. Other benefits have disappeared as well, such as employer contributions to a 401K.

The University of Chicago professors point this out in a footnote. "For workers with non-wage compensation like employer-provided health benefits, replacement rates as a share of non-wage compensation will be lower than replacement rates as a share of wage compensation," they write. "In ongoing work, we hope to better quantify the importance of this non-wage compensation."

Some workers did not receive benefits in the first place. And some who did may be making more money overall now from state and federal unemployment payments. But the numbers are much smaller. And even for these folks, the $600 payments involve a much bigger picture.

Millions of families are facing tremendous costs now that they did not face before, such as providing health care for loved ones. And millions of parents can't work outside the home because their children are home from school, and someone has to stay with them. (In a failure to understand what home life is like for so many people right now, Sen. John Kennedy, R-La., complained that "we're not going to get this economy back on our feet if we're all sitting at home watching Netflix.")

Meanwhile, many workers also are not receiving unemployment payments at all, even though they're supposed to. CBS told the story of a woman in Georgia who has been unemployed for weeks and only received one check that was supposed to cover one week. She had called the state nearly 900 times and not gotten through. Numerous state unemployment offices have been overwhelmed, the report said, noting that a survey by The New York Times and SurveyMonkey found that 55 percent of unemployment claims were unsuccessful.

As co-founder of Steady, a platform helping people find stable sources of income, I've seen the economic devastation this pandemic is causing millions of families—and how badly workers want to find safe, full-time, well paying work.

The next stimulus bill must take this into account. In calculating support for unemployed workers, include the totality of what they've lost. Understand the full scope of their struggles.

For years, workers have seen businesses bailed out during difficult times. It's time for the entire federal government to show a real interest in, and support for, workers as they suffer through an unprecedented, frightening time.

Adam Roseman is co-founder and CEO of Steady.

The views expressed in this article are the author's own.​​​​​