Ending Coronavirus Jobless Benefits for Millions Will Be Tricky

Two record weeks of jobless claims totaling almost 10 million — with millions more likely to come — mean huge number of workers will soon be claiming the new enhanced unemployment benefits. Although it will be weeks before any governor or mayor thinks about reopening the economy in their communities amid the coronavirus lockdowns, it's not too soon to think about what that normalization process might look like. What should be clear by now is that we won't be able to flip a switch and immediately return to the economic conditions of February. The return to normalcy will be a process. For this reason, enhanced unemployment benefits should continue for as long as hard economic times persist, and Congress should establish labor-market benchmarks before discontinuing the program.

One way to think about this is to envision a relatively optimistic scenario for the U.S. economy during the next four months. Let's assume that with strong mitigation efforts and programs to test and trace infections, the economy slowly begins to reopen in May or June. But as we've seen in China, progress may be uneven, with restaurant and travel demand down a lot from pre-pandemic levels. Business investment might stay sluggish as companies wait to see stronger signs of recovery before going ahead with capital-intensive projects. Employment grows in June and July, but millions of people remain out of work with $600 weekly checks from the federal government set to expire.