Some extra unemployment insurance is necessary, but the rich extra compensation from the $2.2 trillion Cares Act is encouraging those employees to stay home. Mr. Huffman did the math in his op-ed: A starting wage for a line cook is about $640 a week. Oregon’s unemployment offers about $416 per week. But thanks to the $600 federal bonus, that same worker now collects $1,016. Why would anyone take a pay cut to go back to work?
We’re hearing similar stories from around the country as small business owners look to reopen on a tentative or partial basis. Employees say they’ll take the unemployment check for as long as they can make more money by not working. One internal Trump Administration analysis estimates that this work disincentive applies to millions of Americans.
This does not mean these workers are lazy. Workers are making rational decisions based on the economic incentives the political class has created. And they are acting exactly as many people said was likely.