68% Of Unemployed Workers In The U.S. “Are Eligible For Payments That Are Greater Than Their Lost Earnings”

By Michael Snyder,

Can anyone explain how we are going to motivate unemployed workers to go back to work when most of them can actually make more money camped on their sofas watching Netflix? Over the past couple of months, 36.5 million Americans have filed new claims for unemployment benefits, and Congress understandably wanted to do something to address this unprecedented spike in unemployment. But by giving all of these unemployed workers a repeating 600 dollar bonus on top of existing unemployment benefits, Congress has actually created a very powerful incentive for Americans to be unemployed and to stay unemployed for as long as the bonuses last. According to a group of prominent economists at the University of Chicago, 68 percent of those that are currently unemployed can now bring home more money than when they were actually employed…

A new analysis by Peter Ganong, Pascal Noel and Joseph Vavra, economists at the University of Chicago,1 uses government data from 2019 to estimate that 68 percent of unemployed workers who can receive benefits are eligible for payments that are greater than their lost earnings. They also found that the estimated median replacement rate — the share of a worker’s original weekly salary that is being replaced by unemployment benefits — is 134 percent, or more than one-third above their original wage.

Of course you don’t have to be bringing home 100 percent of your former income for there to be an incentive to stay unemployed.

For example, if you had a job that you really hated, you would almost certainly jump at the chance to stay home every day and still make 90 percent of what you formerly earned.

So yes, those that had very high paying jobs will be motivated to get back to work, but everyone else will be highly tempted to ride the gravy train for as long as it lasts.

And the less you made when you were actually working, the more intense that temptation will be.

Just consider what restaurant and hotel workers must be thinking about now. According to CNBC, the average unemployed worker in that industry is now eligible to collect “182% of their previous wages”…

The average worker in this industry, which employs 14 million people, makes $13.45 an hour — the lowest compared with other industries.

These workers would benefit most under the unemployment system when compared to others — collecting 182% of their previous wages, according to a CNBC analysis of Bureau of Labor Statistics and Labor Department data.

Do you think that those workers are going to be eager to get back to their former jobs?

I don’t think so.

Of course the truth is that many of their jobs are never coming back. According to the Atlantic, “hundreds of thousands of companies” have already collapsed during this economic downturn…

Small-business activity has plunged nationwide by nearly 50 percent. Hundreds of thousands of companies have already failed. Big retailers such as J.Crew and Neiman Marcus have filed for bankruptcy, while others, including Macy’s, are teetering. By some measures, scarcely one-third of Americans say they are working. Next month’s jobs report will likely show that, for the first time since World War II, a majority of Americans aren’t officially employed.

So the cold, hard reality of the matter is that there simply is not going to be enough jobs for everyone in the United States for the foreseeable future.

And moving forward, a lot more businesses are going to be failing.

Just recently, Facebook conducted a survey of “86,000 small and medium-sized business owners”, and the results of that survey were quite startling…

About a third of small businesses forced to close due to the coronavirus pandemic say they won’t be able to reopen due to an inability to pay bills or rent, a Facebook survery has found.

More than half of the business owners surveyed by Facebook have also said they don’t expect to be able to rehire the same amount of workers that they employed prior to the pandemic.

More specifically, the survey discovered that just 45 percent of all small and medium-sized business owners plan to rehire the same number of employees that they previously had.

So that means that millions upon millions of jobs are gone for good.

And of course the environment of fear that COVID-19 has created is going to paralyze new hiring for a long time to come. If you are an existing business and you are concerned that you may not be able to keep the employees that you already have, that is going to make you extremely hesitant to add anyone new.

The bottom line is that it is going to be exceedingly difficult to find jobs in the months ahead, and the long-term outlook for the newly unemployed is not good at all.

For the moment, those newly unemployed workers are being taken care of by the federal government, but the $600 bonuses are set to expire in July.

If we get to July and those benefits are not extended, we could have a massive national temper tantrum on our hands.

Of course there are many in Congress that are quite eager to extend those benefits, but that would also mean borrowing and spending billions upon billions more dollars that we do not have.

And what happens when an even bigger crisis than COVID-19 comes along? We are just experiencing the early winds of “the perfect storm” that I portrayed in “The Beginning Of The End”, and most Americans are completely and utterly unprepared for what is coming.

So let’s not be mad at those that have lost their jobs just because they are getting a windfall for a few months. Instead, let us hold our national leaders accountable for getting us into this mess in the first place.

For decades, our national leaders have been leading us down a road that leads to national oblivion, and now it appears that we are rapidly approaching the end of that road.

 

Source: http://theeconomiccollapseblog.com

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6 thoughts on “68% Of Unemployed Workers In The U.S. “Are Eligible For Payments That Are Greater Than Their Lost Earnings””

  1. I don’t understand why people has to work? We don’t live a life to work for God’s sake work is part of living GET AWAY WITH THAT SLAVERY MENTALITY. Let them have a rest everyone deserves it. We will see after all this mess is cleared up – We should all have enough to live without having to work!

    Reply
  2. I enjoyed this article and found it much in line with my thinking. I have background in public accounting (about ten years) and also have more than 25 years of retail sales experience. Aside from a B.A. in history, I have nearly all of a second B.A. in accounting. In addition, I had a real estate appraisers license but longer do. In short, I can speak with some business experience.
    After being forced into an early retirement back in 2011, I lost my last full time job. I have been working part time ever since. My current employer, a highly visible “Big Box Store”, offered me a part time job. This whole experience has shown me an inside view of the evils of big business. Home improvement stores like the one I work for have created mega businesses out of part time employees so as not to have to pay them any benefits. They regularly restrict hours, change schedules every week and in general, make it completely impossible to ever set a budget for household expenses.
    Scheduled hours can vary from as little as 6 hours a week to as many as 32. This is the normal way all such businesses work. Because of varying schedules, it is nearly impossible to juggle a second part time job in order to help make expenses. By bullying and intimidating all small businesses out of business, they have eliminated all competition. In this country, we used to be a nation of shopkeepers. We have now nothing but big business. Big retail stores over the past few decades have lured the public with price matching schemes and deep discounts in order to eliminate all small business. This they have done with deadly skill. They have trained the public to expect price matching in all business and trained the buyer to be cheap and predatory in their approach to the retail trade. It is no longer possible to compete with big business on the retail front. They have captured most all of the market. When I hired into my current employer, It was the third pay cut in a row I had to take in order to stay employed. The previous two jobs I had, went bankrupt after being priced matched to death by bigger businesses. My current employer hired me off the street for 15 cents an hour more than minimum wage. After being there more than 5 years, I still make less than I made in my first accounting job in 1982. As most of the accounting jobs have disappeared due to the onset of computers in the workforce, that trade is a shadow of its former self.
    I have no idea how to combat this trend. I feel sorry for any poor sucker just getting out of college with a new degree. Will they be working delivering pizzas for a living?

    Reply
    • Andrew you’re right, as I’ve witnessed the exact same (short the secular education degrees you did, my best friend has over 100K in educational debt that way -dual bachelors in nursing and criminal justice; now past retirement, disabled- after they changed that, thus by law, it still has to be paid, and of course this individual is as I said permanently disabled unemployed, and screwed financially). My own point of view is the exact 5-32hr working week jobs (at one point holding 5 such part time jobs just to get close to working 80hrs a week as I’d been familiar with this lifestyle being that I had several attempts at self employment in retail over a period of 15yrs working at least that much per week, which I’d guess,, you know, came out to me making not much more daily than a little pocket change for all those hours worked, ultimately leading to a lot of stress, poor choices, and being disabled myself from auto accidents, and other incidents, leaving me with severe injuries, and chronic pain, from a body that was worn out anyway from really hard labor much of those years… As a ‘small’ (self only and or self and spouse) businessperson (4 consecutive retail stores and two direct service businesses starting out, that I did better with, than retail, with all its hours/overhead and Debt.), which eventually led to divorce (twice) bankruptcy and a slew of other family & social issues all developing out of an economy that despite working my butt off all those years, did not help me to get ahead financially, it was not until I stopped chasing that ‘golden hoop’ they dangle in front of your face “America Land of Opportunity” BS, did I ever get anywhere, by focusing instead, more on a service to others, type of life, and although it has been difficult, the rewards personally, are at the very least more tangible, than the “fiat currency way of life”.
      The point here is, the system fails everyone today, these are but a few examples from a cross section of US Society in that time frame (late seventies to present, yours, my friend’s 65yrs, and my own 57yrs)… It might have kept us,, alive, but, as time progresses and this capitalism (not to say any other “ism” is individually any better) system gnaws the last worthless pennies from the people’s hands putting the very last of these into the hands of a few, whom will own absolutely everything on the earth’s surface and enslave everyone else as a result (we all see, it is, going there), I think it will be far far far, too late. Thus,, as we’ve seen where it’s headed,, don’t we, for our kids, our grandkids, and all humanity’s descendants, have the responsibility, the “duty” to change that outcome… of course we do, and we truly need, to re-start, a better system, one that works for all the people, not just, the very few corrupt investors at the top, playing in the markets with monies that actually ‘move’ the markets with their actions in nanoseconds while the rest are left to guess where to invest(lose to them) and use inferior internet speed connections, thus they can and are,, manipulating national, and the planetary economy as a whole, creating their endless wealth, giving these few people the ability to ‘win’ all the time, because “it’s their game”, manipulating everything, and everyone else, to their individual health detriment (eventually befalling all, of us) and in the end taking what little, the people might have accumulated in a lifetime of debt slavery, a home and maybe, savings, taking it all away, to pay hospital and nursing costs, only to ultimately leave them destitute in a nursing home to be euthanized…

      This is indeed, a sad world we created from paradise, I know, we can do better.

      Reply
      • Thanks for sharing and agreeing with me on this subject. The only thing that has kept my head screwed on straight all of these years was my ongoing study of metaphysics and spirituality. I was lucky enough to score a job in the Michigan State University library system back in 1972 right after completing my first degree. As a result, I ran into some of the first printed material on the subject of near death experience. The works of Raymond Moody, M.D. and many others have taught me much about the nature of life. If it weren’t for such things, I can’t be sure how I would have turned out.

        Reply
  3. STOP DROPPING ALL THOSE BOMBS IN PSYCHOTIC MASS MURDERS (WARS) AND THERE WOULD BE RESOURCES APLENTY TO CARE FOR EVERYONE ON THE PLANET COMFORTABLY.

    Reply
    • I’m certainly in agreement with you on this subject. For example, it’s a matter of historical record that Kruppstahl (Krupp Steel Company of Germany) sold steel for the manufacture of weapons and war materiel to both the British and German governments during WWII, playing each against the other for fun and obscene profits. I wouldn’t assume their Karmic debt for all the tea in China. They are still in business today doing the same thing! Former president Eisenhower warned us about the dangers of the military-industrial complex back in the 1950’s. The sheeple are still asleep!

      Reply

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