Nearly 70 Percent of Unemployed Workers in America Can Receive Higher Government Payments Than Their Lost Earnings
Newswars reported that a large majority of unemployed Americans can receive more in unemployment benefits than what they were earning while being gainfully employed.
During the last few months, 36.5 million Americans have filed for unemployment benefits, which prompted Congress to take action in order to tackle this abrupt increase in jobless claims.
However Newswars noted one problem with Congress’ response:
But by giving all of these unemployed workers a repeating 600 dollar bonus on top of existing unemployment benefits, Congress has actually created a very powerful incentive for Americans to be unemployed and to stay unemployed for as long as the bonuses last.
According to a number of well-known economists at the University of Chicago, 68 percent of Americans that are currently unemployed can now earn more money than when they actually held work.
A new study by Peter Ganong, Pascal Noel and Joseph Vavra, economists at the University of Chicago, takes government data from 2019 to estimate that 68 percent of unemployed workers who are able to receive benefits can qualify for payments that are greater than their lost earnings. They also discovered that the estimated median replacement rate — the portion of a worker’s original weekly salary that unemployment benefits are now replacing — is 134 percent higher than their original wage.
Per CNBC, workers in the restaurant and hotel industry can potentially receive “182% of their previous wages”
With these facts in mind, the temptation for Americans to not go back to work is quite high. After all, these benefits are quite generous and can foster dependency.
Additionally, many of these jobs may never come back. According to the Atlantic, “hundreds of thousands of companies” have shut down during this state-induced economic collapse.
Newswars offered a bleak picture regarding these closures:
Small-business activity has plunged nationwide by nearly 50 percent. Hundreds of thousands of companies have already failed. Big retailers such as J.Crew and Neiman Marcus have filed for bankruptcy, while others, including Macy’s, are teetering. By some measures, scarcely one-third of Americans say they are working. Next month’s jobs report will likely show that, for the first time since World War II, a majority of Americans aren’t officially employed.
America will need to get back to work.
Prolonging these shutdowns will leave millions vulnerable and put an even larger fiscal strain on the government as it spends even more money to keep people afloat.
The lockdowns are clearly taking a toll and Americans need a coherent reopening plan to get back on their feet.