In the politicians’ rush to “do something” during the coronavirus pandemic, D.C came up with a stunning, idiotic program to damage the economy while creating millions of new welfare addicts. And many of these addicts may well be committing criminal acts before the $600/week unemployment giveaway (supposedly) ends on 31 July.
I’ve been writing about this coming problem for weeks, but it really didn’t become apparent to the public until the $600/week federal “unemployment” checks started raining down from the D.C. helicopters. Here’s the first major article I’ve seen detailing the real world results.
As the WALL ST JOURNAL op-ed below explains, restaurants are having a very difficult time running a bare bones take-out service. No one wants to work anymore. And under the current program, it will not be possible for a restaurant to open until 1 August.
EXCERPT:
We started making the calls last week, just as our furloughed employees began receiving weekly Federal Pandemic Unemployment Compensation checks of $600 under the Cares Act. When we asked our employees to come back, almost all said, “No thanks.” If they return to work, they’ll have to take a pay cut.
But as of this week, that same employee receives $1,016 a week, or $376 more than he made as a full time employee. Why on earth would he want to come back to work?
Actually, for many low income employees, the incentive not to work is even higher. A laid-off part-time employee in California who made $440 a week gross working will now get about $880 for NOT working — DOUBLE. In addition, while unemployment is generally taxable, there are fewer payroll deductions from such welfare checks — starting with (but not limited to) 7.65% for social security.
Even when the money is the same, not working is generally a LOT more fun than working. We’ve created a HUGE anti-work welfare benefit. And according to Forbes, over half our nation’s unemployed will get MORE not working than working:
EXCERPT: Adding the $600 [weekly] boost included in the stimulus package would bring an average weekly unemployment check to $985, which exceeds the median weekly earnings of $936 in the fourth quarter. (Women had median weekly earnings of $843; men took home a median of $1,022.)
I expect Democrats will shortly propose legislation that workers laid off because of the coronavirus can keep receiving the $600 a month benefit even if they REFUSE to seek/return to work. And doubtless some lawsuits will be filed by eager lawyers defending employees that fear ANY increased risk in being employed.
IMMEDIATELY, the federal government should sensibly amend (if not eliminate) this boondoggle. One simple change that would greatly help would be to cut the $600 a week federal payment AT LEAST in half effective 1 May. Better plans can be crafted, but this example is easy to understand and administer. And, oh yeah, it would save taxpayers hundreds of BILLIONS of dollars — not that anyone cares these days in D.C.
Here’s the WSJ article. It’s WELL worth reading:
https://www.wsj.com/articles/our-restaurants-cant-reopen-until-august-11587504885
WALL ST JOURNAL
Our Restaurants Can’t Reopen Until August
Employees refuse to return to work as long
as they’re getting an extra $600 a week.
My company works with local chefs to open and operate their restaurants. We are currently a partner in more than 20 of them. We closed our dining rooms March 15, two days before the governor mandated we do so, and had to lay off some 700 employees. We are doing our best to stay alive by providing takeout and delivery service at about half our restaurants. Our goal is to survive until we are allowed to reopen.
Although our limited operations leave us at only 30% of our usual revenue, takeout and delivery has worked better than expected at most locations. After two weeks of getting the systems in place and understanding the challenges of a different business model, we realized that we needed to hire back some of our staff to help with the demand. That proved harder than we expected.
We started making the calls last week, just as our furloughed employees began receiving weekly Federal Pandemic Unemployment Compensation checks of $600 under the Cares Act. When we asked our employees to come back, almost all said, “No thanks.” If they return to work, they’ll have to take a pay cut.
. . .