PEJOURNAL – The results of a study conducted by a number of American university professors show that the US government’s move to reduce unemployment insurance and COVID-relief payment, instead of increasing employment rates has made people poorer.
A number of US university professors, including Arian Dobeh and Suresh Naidu, published an article last week examining the impact of the massive drop in unemployment benefits in 22 states in June.
The team was able to use banking transaction data and compare it with recipients of unemployment benefits in states that did not reduce benefits to get an accurate estimate of the effects of this policy change on employment and income.
In general, people who are covered by the unemployment benefit reduction program are only slightly higher than those who are not covered but whose income is significantly lower, only slightly higher.
The researchers focused on a group of unemployment insurance recipients who received these benefits in April this year. They found that states that reduced unemployment benefits had a 46-percent drop in benefits compared to states that did not.
The researchers also sought to examine the employment gap between those in the unemployment benefit group and those who were not. What they found was that 21.5 percent of the people whose benefits were strong were employed during this period. In the group whose unemployment benefits were reduced, the figure was only slightly higher at 24.9%.
It is important to emphasize here that these figures reflect occupational differences between the group of people who were unemployed at the end of April.
To date, only 26 states have implemented this drastic reduction in benefits, and these states are generally fewer than the states that have not implemented these reductions. But government coronary aid for the unemployed in six states expires on September 6 unless Congress takes action.
Yesterday, President Biden sent a letter to Congress saying he thought it appropriate to allow these benefits to expire on September 6, but this and other research clearly shows that this is not appropriate.