Shelter in Place, Pt. XIII: $600 Is a Powerful Amount of Money

Congress is in the early phases of negotiating another massive stimulus package and it’s tempting to append “before it’s too late” to the end of that statement but, in truth, it’s probably already too late for this next stimulus package to have anything near optimal impact for the people it’s meant to serve. Of course, that we’re in “too late” territory at all is further proof that facts are partisan because the delay, and its adverse impact to American citizens, rests entirely on the shoulders of the GOP which saw the stimulus plan rolled out by the Democrats in May and said, “Nah, we’ll wait this one out.”

And speaking of partisanship—which might as well be our national motto at this point—the debate regarding the continuation of a temporary $600-per-week increase to unemployment insurance provided by the CARES Act figures to be an increasingly hot topic over these next few days. That $600 figure was agreed upon by both parties in an effort to provide the equivalent of a livable wage to the tens of millions of Americans who lost their jobs during the early phases of the pandemic and given the significance of all that, it’s worth taking a brief moment to specify exactly how much money that is: On its own, without further supplement, $600 per week translates to an annual wage of $31,200. That’s $15.00 per hour. Per our government, that’s the least an American adult should earn. Minimum wage is $7.25.

Congressional Democrats are fighting to extend that $600 insurance payment, which is currently set to expire this week—and which, functionally, already has expired—while Congressional Republicans are fighting to reduce it to $200, a change that will massively and disproportionately impact lower income individuals. That ideologically opposed parties would differ on this isn’t surprising, though the arguments from either side are revealing. The left claims that these payments allow Americans to have the funds necessary to live and the fact that current unemployment payments are materially larger than they would have been under non-pandemic conditions is only proof that prior unemployment benefits were insufficient. People have a right to the funds required to live and, if they can’t work—and, to be clear, there are more people who want to work than there are jobs to go around—the government needs to provide for them.

The right’s argument is, in a word, misleading. Their argument is that providing such robust unemployment benefits is detrimental to society because it will disincentivize Americans from joining the work force. That disincentive, of course, arises because as many as 68 percent of the unemployed are earning more from their unemployment compensation than they were when they were gainfully employed. On the surface, these numbers actually support the right’s case. If you can make more money not working then, in a capitalist society, you are disincentivized to work. Of course, the root of this problem, and one that I don’t anticipate any Congressional Republicans addressing over the course of the next few days, is that this is a problem not because unemployment is too generous but rather because the conditions of the free market are such that a massive number of working Americans earn less than livable wages for their efforts, as evidenced by that minimum wage figure above. That’s not a problem with unemployment compensation, it’s a problem with the free market.

Proponents of late-stage capitalism like to suggest that the free market can solve any problem and meet any need. This simply isn’t true. A free market isn’t a nebulous entity that exists in the perfect conditions of a textbook, it is a collection of humans working to achieve their own goals, (generally) within the bounds of socially agreed upon rules. Our society values the accumulation of wealth and therefore so too does the free market, being, as it is, a reflection of those people who make it up. In an effort to accumulate wealth, those with disproportionate power have exercised their influence to gather more and more for themselves at the expense of the earnings potential of their fellow citizens. The free market is fine with this. And so, if people are disincentivized to work because of the allure of unemployment benefits equivalent to a livable wage, the problem isn’t that the benefits are too great, it’s that the free market is incapable of providing a livable wage to all workers without outside pressure. The kind of pressure that might come from, for example, making a weekly $600 unemployment insurance payment permanent. This is the right’s fear and the crux of their argument. They don’t want the working poor to have an alternative to a life of hard earned poverty not because of any inherent cruelty but because they don’t want to have to give up a portion of the wealth that they have worked so hard to consolidate.