When Helping Hurts

Often in life, even positive actions can produce unexpected consequences.  Such is the case with the federal government’s recent effort to assist workers furloughed due to the coronavirus epidemic. The Feds added $600.00 per week (thru July) to regular benefits for the millions of impacted workers who filed for unemployment. That additional weekly payment gave laid-off employees some welcome extra financial cushion to soften the impact of their, hopefully, temporary job loss. No question, for those affected by the epidemic-fueled financial crisis, that extra weekly money was a critical help. Time, now, for the consequence.

That extra money has now made returning to work less attractive, even when given the opportunity to come back. As it turns out, almost half of America’s workers furloughed now make more, in some cases, far more, than they did in their prior jobs.  Which means many of them do not want to return to those jobs, or feel they can’t afford to, after enjoying the luxury of that extra ‘free’ money.  “The unemployment benefits are so generous, that in many places workers are telling their bosses they’d rather be unemployed than return to their job,” said the executive vice-president of the National Restaurant Association.  Boomerang!

Employers, in the hospitality and food service industries, among others now re-opening, are, in fact, having trouble getting their furloughed employees to come back. As you know, once an employee returns to work, the regular, and the temporarily-enhanced, unemployment benefits stop, as they certainly should. Leading some employees to request that they be permitted to remain furloughed until the end of July! Others have suggested working alternate weeks with colleagues, so that each can continue to grab a piece of that bonus government (i.e. taxpayer) money.  Even though the original intent of the unemployment benefit was to be strictly an interim assist for job loss, while encouraging the search for alternate employment.  And, even then, there was a finite cut-off to those government payments, acting then, by intent, as an incentive to find work.

For impacted employers hoping to re-start their closed businesses, this has created a significant problem.  With employees declining to come back until either the bonus benefits run out, or until wages at their company are raised considerably, employers are having difficulty staffing their business(es), and some may well face the ultimate prospect of having to shutter their companies entirely.  And there’s another significant issue for the owners of small-to-medium sized businesses/companies.  Those who applied for and received the government’s forgivable loans, the ones that were meant to help employers pay their employees.   Those loans are only “forgivable” if their employees actually return to work.   Failure to get them back means, ultimately, that the employers would have to repay that government loan!

As it stands, then, those furloughed workers receiving the enhanced federal payments on top of regular unemployment, have no real incentive to return to their old jobs, as long as the government faucet continues to pour.  And therein lies the most destructive problem, just as epidemic-riding Progressive-Socialists (formally Democrats) in the House begin to float the idea of granting $2,000 per month to each U.S. resident above the age of 16, both citizen and illegal, with annual income below $130,000, until the epidemic ends.  Once hooked on the bottle, the baby will always demand the bottle. Meaning that politically, and thus realistically, those payments can never end.  With “guaranteed income,” there is absolutely no incentive to ever go back to work, or ever even seek work to begin with.  Companies and businesses would never be able to afford employees, competing with a continuing unearned hand-out of that magnitude.

Although the theory of the current bi-partisan government’s money dole was to help bridge the financial and emotional pain of job furloughs, which it was assumed by the bonus-dollars cut-off date, would hopefully be temporary. In practice, by running those added payments through July, the incentive to return to work for a great many in lower-wage positions was either minimized or vanished entirely.  As would be the case, long-term (as in, forever!) with that ridiculous P-S guaranteed annual income proposal, which would automatically vaporize work incentive. Hurting (make that, ending) the tradition of America’s work-based, capitalistic society, while helping, and hastening, immeasurably, the all-powerful Central Government-ordered transformation of our once great nation into a fully-socialist society, where people would exist to be used, not valued, and individual freedoms would be forever gone and forgotten.

(“Rather be unemployed” via The Wall Street Journal, Eric Morath, 4-29-20).