Help Wanted: Business Owners Can't Compete With Generous Unemployment Benefits

AP Photo/Steve Helber

Uncle Sam found it was actually pretty easy to get people to stop working during the coronavirus crisis — all it took was a generous $600-a-week boost in unemployment.

Getting them back on the job now is proving to be far tougher, at least as long as those payments are still rolling in.

From a bar in Baltimore to a restaurant-staffing service in Oregon, owners say they’ve tried to rehire employees and got brushed off. Their former employees are collecting significantly more money while binging on Netflix at home than they did sweating 10-hour shifts in the kitchen or waiting on tables.

By one estimate, 63% of workers would make more on unemployment than they would at their jobs. In some states, it could be as high as 75%.

President Trump weighed in Tuesday, according to multiple media reports, telling GOP senators in a closed-door meeting that he wants the enhanced federal benefits to expire at the end of July, as is called for in the stimulus law.

That puts him on a collision course with Democrats, who are already itching to extend the $600-a-week payments into next year.

A former Congressional Budget Office director this week suggested a middle ground.

Douglas Holtz-Eakin, who is now president of the American Action Forum, says cutting off benefits completely on July 31 “may appear heartless.” But the AAF says its calculations show that the $600 federally backed payments, added to existing state unemployment, are more than most workers made at their jobs. So keeping the payments going isn’t a viable option for an economy looking to get revving again.

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