We wondered aloud whether the congressional bailout bill giving the unemployed $600 a week would be a disincentive to return to work for many low-income workers laidoff due to the coronavirus shutdown orders. For many that will mean they will receive more income for staying home than they were getting while working.
The morning paper recently ran an op-ed by a Henderson businessman who calculated that his company was paying employees — now laidoff as non-essential — $12 an hour, but their unemployment benefits amount to about $300 a week plus the $600 a week from the federal government. He said this works out to $22.50 an hour. “So if we keep them on the payroll, they earn $12 per hour, and if we lay them off, they earn $22.50 per hour with no taxes owed. What would you do for your employees?” he asked.
How many would come back to work if his business reopens?
A man in the restaurant business in Oregon has the answer in an op-ed today in The Wall Street Journal. He writes that the takeout and delivery business has worked better than expected and the company started making calls seeking to get former workers to return. “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,” he writes.
With unemployment and the fed bailout, he calculated that former workers at getting $1,016 a week, or $376 more than he or she made as a full time employee. “Why on earth would he want to come back to work?” he writes. The checks will keep coming until July 31. Reopen?