In March, a so-called “drafting error” in the $2 trillion coronavirus relief bill led to laid-off workers receiving an extra $600 in federal unemployment benefits on top of the state benefits they were already slated to receive. It was left as-is despite the protests of a few GOP senators, mainly because Schumer & Co. were quick to use the bad optics of seemingly ‘taking money away’ from people purposefully forced out of work to their advantage. Also, outdated and technologically inept state unemployment systems weren’t equipped to handle individual situations, making a one-size-fits-all approach the only way to make sure people were made whole - and then some.
It’s the “and then some,” however, that’s been the rub for at least the past month or more as America tries to get back on its feet. Sure, if the government was going to unjustly take away people’s livelihoods to fight a virus that mostly kills people in nursing homes (without protecting those nursing homes) and has a death rate only slightly higher than the flu, said government certainly has the responsibility to ensure those people don’t go under. But in giving many of them an actual raise, they created a whole other set of problems that are now playing out in factories, restaurants, and thousands of other employers that typically employ a lower-skilled segment of the U.S. population.
As it happens, most people seem to prefer getting paid to do nothing over taking a pay cut to do actual work. Shocker, right? I’m not judging them, because this isn’t a character flaw so much as it’s a feature in humanity. Were I in the same position, and most of us very easily could have been, I might likely feel the same. If the government is going to pay me to landscape my yard and rearrange my basement, I’d probably be all-in too, at least for a time.
But as things have picked up, companies have experienced severe difficulty making the case that workers should come back, ironically resulting in a severe hiring crunch in the midst of one of the greatest economic turbulences in U.S. history. It’s not what you’ll see in the mainstream media, of course, because we’re supposed to be panicking about a coronavirus “case surge” and a cratering economy all the way until the election. Nevertheless, it’s the grim reality these days for countless hiring managers.
As a 20-year staffing industry vet with contacts all across the country, I hear the same story from everyone, whether it’s a factory in southwest Virginia trying to hire assembly workers or a staffing industry in Minnesota hiring forklift drivers for a warehousing client. They all need people, desperately, and they all are having a hard time convincing anybody to come on board. This despite the fact that even with an improved June jobs report there are still tens of millions of people on the unemployment rolls.
Predictably, Democrats want to extend the federal unemployment benefits through - wait for it - January 2021. Now who could have possibly seen this coming? Democrats obviously have a two-staged strategy here. Keep the economy tanked by keeping production low and causing businesses to fail, all the while accustoming Americans to socialism by keeping as many people on the government dole as possible for as long as possible. It’s brilliant, actually, but if Republicans end up falling for it they are signing their own death warrants, not just in November, but in every other coming election. Because once we’ve gone full-socialist, there isn’t any going back, ever.
Thankfully, there are signs that Team McConnell is fighting on this hill. "Unemployment is extremely important. And we need to make sure, for those who are not able to recover their jobs, unemployment is adequate," the Senate majority leader said last week. "That is a different issue from whether we ought to pay people a bonus not to go back to work. And so I think that was a mistake. And we're hearing it all over the country that it's made it harder actually to get people back to work. But to have the basic protections of unemployment insurance is extremely important and should be continued."
NBC confirmed similar sentiments from almost a dozen Republican senators as well as Trump himself, who called it a “disincentive to work.”
“It certainly does not have the backing that it had before because of many small businesses that have come forward and said that people just don't want to come back — that they were making more than they did when they worked,” said Kansas Sen. Pat Roberts.
Florida Sen. Rick Scott said “we’re never going to see our small businesses open” if people are incentivized in such a way indefinitely.
“In interviews with nearly a dozen GOP senators Tuesday, a consistent theme emerged: They are certain they don't want to extend the $600 per week in emergency jobless compensation because they widely agree that it is motivating people to stay out of work,” NBC reported. “But they have little clarity on what ought to replace it.”
Um, here’s a thought. How about replacing it with … nothing? Nothing extra, at least. Regular state unemployment benefits are designed to provide a percentage of wages, not the entire amount, in order to incentivize the recipient to look for work and accept suitable employment when it’s offered. Remove that incentive, and we’re no longer talking about unemployment benefits, but welfare payments.
Were the CARES Act provisions to extend until January the Congressional Budget Office (CBO) estimates that “roughly five out of every six recipients would receive benefits that exceeded the weekly amounts they could expect to earn from work during those six months."
"If we fail to renew the $600-per-week increase in UI, millions of American families will have their legs cut out from underneath them at the worst possible time — in the middle of a pandemic when unemployment is higher than it's been since the Great Depression," Senate Minority leader Chuck Schumer said via statement.
Obviously, not continuing to give laid off workers a raise is hardly cutting “their legs out from underneath them.” Instead, Schumer & Co. are trying to continue to cut the legs out from beneath struggling businesses desperate for workers. In other words, they’d rather stick it to Trump than see America on its feet.
If Republicans give in, it’ll be game over both for Trump and for any hope of keeping a GOP Senate majority.