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Bill advances to fix Rescue Act's 'stay-at-home' incentive

By Lightning Reports, Published: June 2, 2021

Sen. Chuck Edwards joined Lt. Gov. Mark Robinson and U.S. Rep. Ted Budd Tuesday in pushing state and federal legislation to convert the $300 federal unemployment supplement into a back-to-work bonus.

The policymakers say that with D.C. Democrats and Gov. Roy Cooper opposed to paring back the generous unemployment benefit, a back-to-work bonus might be the only viable path forward to encourage a return to the workforce.

"I don't like the precedent of government paying able-bodied people to find a job, but this issue requires a solution," Edwards said. "Employers can't hire people because government is paying them not to work, and we've got to fix it."

Lt. Gov. Robinson said: "We hear from businesses every day who tell us that the biggest problem they currently face is trying to find employees. Democrats want to pay people not to work. This is not only wrong, it harms our small businesses in North Carolina."

Added Budd, who is running for the Republican nomination for the U.S. Senate seat Richard Burr is vacating: "The current enhanced unemployment system has essentially created a stay-at-home bonus. We should reverse the incentive and create a temporary back to work bonus instead. Whether it’s Washington or Raleigh, North Carolina Republicans are focused on getting folks back to work as quickly as possible."

The state Senate on Tuesday passed the bill 35-10 on Tuesday. The measure instructs the Cooper administration to seek sign-off from the federal government to scrap the $300 weekly unemployment supplement and instead pay people up to a $1,500 bonus if they find a job within a set time period.

The plan saves taxpayer money in the long-run. The proceeds would be paid to a person either way. By using the funding as a back-to-work bonus instead of unemployment benefits, the plan reduces the length a person will be on unemployment and increases the labor force, which will result in additional economic activity and tax revenue.

The former top economist in the Obama-Biden White House, Jason Furman, recently published a paper concluding "the factors responsible for the slow employment recovery ... [include] expanded unemployment insurance benefits and eligibility." Furman rebutted the argument that childcare costs are the reason for the slow labor market recovery, concluding that that "the estimated amount of the overall decline in employment that can be explained by challenges particular to mothers of young children is even smaller (zero, in fact)..."