Though clearly well intentioned, it’s counter-productive for the federal government to supplement the states’ unemployment benefits with a $600 boost a week in “pandemic unemployment.” It’s simply too much money to accomplish the goal of unemployment – keep people afloat while jobless but low enough to incentivize seeking work.
It’s clear the majority of people are unaware what’s happening on the unemployment front. Many people are making more unemployed than while they had a job. Working types should be outraged by how much money those who are unemployed are taking home.
For example, an individual who makes $45,000 a year ($865 per week) was laid off temporarily March 23. For a couple weeks, the person received $430 per week from the state – the max amount allowed if taxes are not taken out. Effective the first week of April, the federal government added $600 to the weekly amount, resulting in the person making more — $1,030/week — on unemployment than working full-time. The individual’s employer received the PPP grant/loan and told the employee to come back to work. The employee refused out of fear for her health. Though that’s an obvious cover in most cases, it’s a scenario playing out across the country. The individual is getting paid more for not working.
The federal government needs to place a time limit on this extra payment or cut the amount in half. It’s too much money, although it’s become a political football for some elected officials including in Maryland.
Even the most scrupulous will have a difficult time making the choice before them today — not work and make more money than working. The emergency nature of the boost is understandable, but providing this for more than six to eight weeks contradicts the intent of unemployment insurance.
With employees unwilling to work and state agencies too overwhelmed to vet each case of employee malfeasance, businesses are now being hurt by this stipend. Common sense dictates the feds must either reduce the rate or officially put a cap on the number of weeks the jobless can receive the boost.