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WV Should Not Pay Bonuses to Lure People Back to Work

Governor Justice is considering paying a cash bonus to individuals to entice them to return to work.  Employers are having trouble filling vacant positions and the argument is that paying people to go back to work will help solve that problem.

Initially, the Governor offered to match bonuses paid by employers.  However, businesses balked at that idea.  Justice countered by considering using federal stimulus money to pay $500 to unemployed individuals who go back to work.

No final decision has been made yet.

I suppose such a plan can be justified from a purely academic perspective—provide more money and/or benefits to an individual until a position is filled.  Additionally, the money from Washington is supposed to help stimulate the economy, and the bonuses would put more cash in peoples’ pockets.

However, the idea is unnatural and unnecessary.

First, a government funded back-to-work bonus is unfair to individuals who have already returned to work. Thousands of West Virginia workers have chosen to leave the generous unemployment benefits behind and get back into the workforce.

Second, Governor Justice has decided that the expanded federal benefits of $300-a-week will end June 19th.  Individuals will then find that their state jobless benefit will not match or exceed what they can make in the workplace.

Additionally, the executive order exempting the unemployed from having to certify that they were searching for work expires Sunday. That means individuals will have to once again declare that they are able and looking for a job.

Third, if employers want to offer back-to-work bonuses they can, and many are. That is a better market solution to the employment problem than the government first offering generous unemployment benefits and then countering that with a bonus to get individuals off unemployment.

Fourth, that bonus money must come from somewhere.  In this case, the source is the Biden administration’s Covid relief bill, which is all borrowed money.  Perhaps you could argue no one is paying for it yet, but the bill will come due at some point.

At the very least, the federal government must pay interest on the debt.  That means individuals who are working and paying taxes are helping fund bonuses for people to encourage them to return to work.

And finally, work has value beyond a paycheck. Work improves skills, creates opportunities for betterment and provides a sense of achievement.

As the pandemic winds down, the economy has taken off more quickly than many expected.  The supply of labor has not yet caught up to the demand.  It will sort itself out as employers offer higher pay and additional unemployment benefits dry up.

There is no justification for West Virginia to offer taxpayer-funded enticements.





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