Making more on unemployment? About half of the unemployed are
Bottom Line: Recently Senator Rick Scott, who voted in favor of the CARES Act enabling enhanced unemployment payments, expressed concern over Americans becoming too comfortable on unemployment benefits. While Americans, especially Floridians, have had issues obtaining their initial benefits – once they have, they’re often finding a pleasant surprise. They’re receiving more not working than they were when they were working. This underscores the concerns expressed by Senator Scott and delegitimizes all related polling.
With the extra $600 payment in federal assistance, in addition to state benefits, the average recipient for formerly full-time employed Americans is $978. This will continue through July 31st under the CARES Act. On an annualized basis the average American is receiving $50,856 while unemployed. In Florida, for those who’ve managed to navigate the claims process to receive benefits, the number is $875 weekly or $45,500 on annualized rate basis. The question becomes whether many will want to remain unemployed once opportunity to go back to work presents itself? This is at the crux of Scott’s concerns.
Unemployment benefits are designed to be safety nets to help people get through a time of hardship. Ironically, for the average unemployed American receiving benefits, the pandemic has enhanced their financial situation over the short-term – while not working. This certainty isn’t the intent of the system and as a reminder this isn’t free money either. All Americans bear the burden of the debt we’re taking on to payout these funds. Any additional policy taken regarding unemployment benefits should be scrutinized through this prism. The other dynamic in play is polling and public officials looking to it for guidance on decision making.
A recent WalletHub Coronavirus Relief Survey, which was widely cited, showed 84% of Americans want more money than was provided by the CARES ACT. You don’t say? “Free” money without working and most Americans want it? Who would have guessed? In a recent Gallup poll, more Americans said the threat of the coronavirus is lessening than thought it was getting worse, yet large margins felt stay-at-home orders should remain in place indefinitely. Could this be influenced by millions of Americans being paid more while they’re not working?
The point of this story isn’t to suggest anyone wanted this to happen, or that most unemployed Americans want to remained unemployed one day longer than they have to for economic gain. It is to illustrate the facts of what we’ve just created with policy, the dynamics in our current state of affairs and perspective that could color opinion polls based on these dynamics. Safety net programs should remain safety nets. What makes this country great is hard work and opportunity. It’d be a shame to discourage hard work once opportunity presents itself once again.