This is a subject that we’ve been covering here ever since the coronavirus stimulus bill was first being debated in Congress. Having passed a measure providing enhanced unemployment benefits with no cap on the amount of the payments based on the worker’s previous rate of pay, a condition was created where a majority of the unemployed are now collecting more than they did on their last job. That doesn’t provide much of an incentive to go back to work, particularly if you can point to your concerns about the virus as a reason to stay home.
In Idaho, Republican Governor Brad Little and his colleagues would like to “lure” these idled workers back onto the job and off of the federally enhanced unemployment system with a rather straightforward deal. They’ll simply bribe them to go back to work. They’re talking about a one-time $1,500 payment if the workers agree to get off of the benefits train and go back on the job. Is this generous or pointless? We’ll discuss that here today. (CNN)
Idaho will pay jobless residents $1,500 to lure them back to work and off federally enhanced unemployment benefits.
The effort mirrors a proposal being floated by Republicans on Capitol Hill, who must soon decide whether to continue supporting the millions of Americans who lost their jobs due to the coronavirus pandemic shutdowns.
Several GOP lawmakers favor return-to-work bonuses such as the one being implemented by Idaho’s Republican Gov. Brad Little, while congressional Democrats generally want to extend the $600 weekly boost to benefits passed by Congress in March as part of the $2 trillion coronavirus relief package.
At this point, we’ve painted ourselves into a corner where we’re struggling to solve a problem of our own creation. When the enhanced benefits were being debated, Senate Republicans tried to put a cap on the benefits based on the worker’s previous income, but the Democrats screamed racism, wealthism and every other ism in the book and the GOP folded. Now, as noted above, employers are starting to reopen, but literally tens of millions of people are making more by staying home. What did we think was going to happen?
I’m not sure how much of a viable solution Idaho is proposing here. They’re talking about a one-time payment of $1,500 dollars. The maximum unemployment benefit in Idaho is $405 per week. After you tack on the $600 federal enhancement, that’s more than $1,000 per week. They’ll make more in two weeks on unemployment than they’ll get from that single check. How many people is that going to bring off the bench if they weren’t already motivated to get back to work?
Of course, at least in theory, if you refuse a job that’s offered to you you’re supposed to disqualify yourself from unemployment benefits. But that’s only if the state finds out that you declined the job. If your previous boss calls or emails you to say that your position is once again available, will the state find out about it and take action? The threat of being caught up in a benefits fraud case might be enough to scare some workers back to work, but certainly not all of them.
What we really need is some sort of notification system so that employers can publicly announce that they are ready to do business and their former workers are welcome back. If that data can be parsed against the unemployment rolls, we could probably get closer to the saturation point. And you wouldn’t need to send everyone a check to get them back to work, either.