Those warnings about the COVID relief bill raising unemployment are looking prescient


Back when we were debating the details of the coronavirus relief bill as it sailed through Congress (where as many as three people may have actually read the entire thing), one brief sticking point came with the generous nature of the federal enhancement of unemployment benefits. I wrote at the time that “a safety net isn’t supposed to be a hammock” and offering people more money to stay home than they would be earning on their jobs would have predictable results in some cases. This was a point that was brought up by a few Republican Senators, including Lindsey Graham, Tim Scott and Ben Sasse. They were quickly shouted down and accused of being cold-hearted or something.

Now, as it turns out, before much time has passed at all and also before people have even begun receiving the enhanced unemployment benefits in many cases, that predicted effect seems to be rearing its head already. As the Free Beacon reports, some employers are having a hard time getting all of their work done because some workers would rather wait out the pandemic at home and collect those benefits than show up for work.

Daniel Johnson, the owner of a New Orleans landscaping construction company, told the Washington Free Beacon that while he runs a business deemed essential, most of his team has stopped showing up because of the coronavirus, preferring to wait on unemployment payouts.

“The majority of my team’s last day was 3/13,” Johnson told the Free Beacon. “We have plenty of work and the city deems us as an essential business because we are a city contractor working on green infrastructure projects.”

“The employees expressed concern for several reasons,” Johnson said. “Most focused on fear of bringing virus home to weak family members young and old. I get it, but our work allows them to have substantial space between each other. Most are desperately waiting for unemployment benefits and are not interested in returning to work anytime soon. Very frustrating as an employer.”

In other cases, employers are using these enhanced unemployment benefits as an excuse to send their workers home. The Beacon article cites one cleaning service in Virginia that put out a statement saying that their laid-off workers would actually fare better and make more money at home after laying them off. But one of the primary goals of the generous financial relief package was to provide employers with an incentive to not lay everyone off. In that sense, the provisions of the unemployment clause in the bill lacking a cap based on the worker’s salary are actually undermining the intent of the legislation.

I realize it’s not that cut and dried. Some of these workers who are choosing to stay home and wait for unemployment benefits to kick in are citing other, valid reasons. Those with public-facing jobs are fearful of contracting the virus and potentially bringing it home to their families. I can completely relate to that. But at the same time, these are the challenges that everyone is facing today. The companies who are being allowed to remain in operation and provide vital services won’t be doing either or helping out the economy if they can’t field enough employees to accomplish their mission.

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This isn’t a case of everyone simply deciding to cash in on the federal government’s generosity, obviously. There are plenty of people out there in common circumstances who likely didn’t have any choice in the matter. But as predicted before the bill was even signed into law, there will always be a certain percentage of people who will see this as a way to land themselves a raise and take what amounts to a four-month paid vacation when the opportunity presents itself.

All it would have taken to ensure that the relief was going to those who need it most was a cap on the enhanced unemployment benefits to ensure that the maximum payment wasn’t in excess of the worker’s current salary before being laid off. And that’s precisely what Graham, Scott and Sasse were proposing. Now it’s too late and the relief bill is, at least in some ways, contributing to the economic crisis rather than making it better.

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