One of the more unusual predicaments of reopening the economy is the challenge faced by some employers of getting their employees to come back to work.
Employers who are either beginning to reopen their doors or have received a grant under the Paycheck Protection Program are finding that, in some cases, they cannot match the amount of money the workers get on unemployment.
Congress added $600 a week to every state’s regular unemployment benefit, meaning lower income workers get more money for not working.
Karen Harned, executive director of the National Federation of Independent Businesses legal center said, “We have a number of members call us or email us and say they have offered their employees to come back to work and they said, ‘No, I want to keep my unemployment.’ We are definitely hearing stories that this is real.”
Individuals who turn down work are supposed to be disqualified from jobless benefits. WorkForce West Virginia has a link on their website for employers to document when an individual receiving unemployment refuses suitable work.
That report can result in a “hold” on the individual’s benefit until there is an investigation by WorkForce West Virginia. That all takes time, and WorkForce is already overwhelmed trying to process tens of thousands of new claims.
Also, not every employer is willing to complain because the employee may eventually return, and they don’t want a disgruntled worker. Troy Thomas, manager of the Sogefi auto parts plant in Wayne County, said employers are in a tough spot.
“We don’t begrudge our employees who’ve been laid off the extra benefit they are getting,” Thomas told me in an email. “We don’t want to be the ‘bad guys’ who spoil their benefits with the unemployment office.”
The average weekly unemployment benefit across the country is $380, or roughly forty percent of the average wage. Congress decided on the $600 figure to raise the benefit to close to what the average weekly salary would be.
It was pitched as wage replacement during the pandemic, but now critics believe that it has turned into an excuse not to work.
“It’s too big. No question,” Doug Holtz-Eakin, president of the conservative American Action Forum, told the Washington Examiner. “It’s quite clear that the work incentive has been very badly damaged as it is way too generous.”
Individuals who refuse work to protect their benefits may feel justified. They need every dollar they can get, or why work when you get the money for free?
But the additional $600 a week is temporary. It is scheduled to expire at the end of July. Three Congressional Democrats have proposed extending the benefit, but that plan faces opposition from Senate Republican leaders.
The money will dry up eventually and when it does, individuals who decided to remain on the dole even when offered work may find there is no longer a job waiting for them.