Trump economic adviser claims $600 unemployment boost is ‘disincentive’ to work

Larry Kudlow adds that White House plans to reform benefits in August

Donald Trump‘s economic adviser has claimed that the extra $600 (£477) that people are receiving in the US as a bonus to their unemployment benefits is a “disincentive to work”.

Mr Kudlow, director of the United States National Economic Council, told Jake Tapper of CNN that the White House is against extending the unemployment payments in their current format, beyond July.

The $600 a week increase in unemployment benefits was agreed to as part of the CARES Act, that was created to help those who lost their jobs during the coronavirus pandemic.

More than 40 million Americans have reported to being out of work since the pandemic began, and the increase was planned to help those affected in the months ahead.

However, speaking to Mr Tapper on Sunday, Mr Kudlow said that the scheme is not encouraging people to look for work and called it “in effect a disincentive”.

He said: “I mean, we’re paying people not to work. It’s better than their salaries would get.”

Mr Kudlow added that the Trump administration is planning to end the scheme in its current format at the end of July, but confirmed benefits would continue in a different form.

He said they are “looking at a reform measure that will still provide some kind of bonus for returning to work, but it will not be as large.”

Mr Kudlow claimed that the reform will act as an incentive for people to go back to work, as states continue reopening across the US.

Last month, Josh Bivens and Heidi Shierholz, from the non-partisan Economic Policy Institute, wrote that keeping unemployment benefits high is vital for the US’s economic recovery, according to Common Dreams.

“For the purpose of generating a rapid macroeconomic recovery from this shock, the more money getting into the pockets of low- and moderate-wage workers, the better,” they said in a blog post.

“The extra $600 is smart and compassionate and policymakers should extend all (or at least most) of this extra boost well past July — at least until unemployment is falling rapidly and at a manageable level.”