Unemployment: Generous benefits, with a painful wait
The package of coronavirus stimulus measures has created a raft of unintended consequences for workers, said Greg Iacurci in CNBC.com. One business owner in Washington state expected her furloughed employees would be grateful when she got a Paycheck Protection Program loan and told them they could go back to work. Instead, “her employees hate her for it.” Thanks to a $600-a-week supplement to unemployment provided by the federal government, many of Jamie Black-Lewis’ 35 employees were “making more money by collecting unemployment benefits” than they’d get from working. “On what planet am I competing with unemployment?” Black-Lewis asks. Meanwhile, in California, gig workers who applied for benefits were in for their own surprise: Letters telling them that they were eligible, but “are entitled to $0.” While the federal government is “funding unemployment benefits for these newly eligible Americans,” in most states those haven’t kicked in. The promised benefits may be substantial, but the process is “confusing and challenging.”
“Unemployment benefits are typically meant to keep people afloat but stay low enough to incentivize them to find a job,” said Ella Koeze in The New York Times, but the government in this case purposely aimed to fully replace lost wages. “When you add $600 to the national average unemployment payment—$371.88 a week—the replacement rate goes from 38 percent to almost exactly 100 percent.” But in some states, like Maine, New Mexico, and Idaho, the unemployed are making 30 percent more by staying home. This is what Republicans who opposed these benefits anticipated, said The Wall Street Journal in an editorial. When staying off the job becomes a “rational decision,” the economic recovery suffers. Now some businesses will still have to wait until August— when the extra benefits expire—“to be able to afford the workers they need to reopen.”
It’s easy to say the benefits are too good if you haven’t confronted the actual “dehumanizing” process of trying to get them, said Fabiola Santiago in the Miami Herald. Florida’s jobless simply “can’t collect what is legally due them.” Take the experience of one Miami restaurant manager. Even after being approved for benefits, he can’t get them because the state’s website crashes time after time. He’s tried getting up in the middle of the night when the site might be less busy, and it’s still the same thing. In New York, the state hit hardest by the coronavirus, the system has similarly crumbled, said Daniel Moritz-Rabson in Gothamist.com, and many of the jobless “remain unable to complete an unemployment application.” Others don’t even know if their application has been accepted. “You have a whole society that doesn’t have money, can’t work because they not allowed to leave their houses,” says the founder of a 24,000-member Facebook group for those struggling to get benefits, “but now you’re not paying them.”