Unemployed Workers Shouldn’t Get Benefits Better Than Their Old Wages: Mnuchin

Treasury Secretary Steven Mnuchin said Thursday the Trump administration wants to cap enhanced unemployment benefits in the next coronavirus package.

According to MSN Money, the move would ensure workers do not get benefits amounting to more than their former wages. Under the coronavirus relief package enacted in March, unemployed workers received as much as $600 per week in addition to their state unemployment benefits. Republicans and critics of the bill said it encouraged workers to stay at home instead of looking for work.

“You can assume it will be no more than 100%, so, yes, we want to incent people to go back to work,” Mnuchin told CNBC.

The extra funds will end this month. Supporters of the extra benefits say the money is paramount to keeping families out of poverty as the jobless rate shot up, noting it typically only goes beyond offsetting a previously earned wage when an employer is paying minimum wage or just above.

Some companies have said the extra benefits have led to difficulties in hiring new employees or rehiring employees despite the unemployment rate of 11%.

The House passed legislation in May extending the $600 in extra weekly payments until December. However, that bill is considered dead on arrival as the Senate said it will not consider the package.

“Enhanced unemployment is intended for people who don’t have jobs, particularly in industries that are harder to rebound, so we will not be doing it in the same way,” Mnuchin said.

Mnuchin added he and White House Chief of Staff Mark Meadows and Senate Majority Leader Mitch McConnell met Wednesday and said their goal was to pass a second relief package by July 20.

Mnuchin added the administration wants to see another round of direct payment checks in the next package.

“We do support another round of economic impact payments,” Mnuchin said.

Mark Zandi, chief economist at Moody’s Analytics, told MarketWatch a $1.5 trillion package was the minimum size needed for the next round of fiscal stimulus, but later said he would make the measure significantly larger if he were “king for the day.”

Raj Chetty, an economics professor at Harvard University, said he broadly agreed with Zandi’s assessment.