Economic prognosticators were abuzz last year with optimism about a so-called “V-shaped recovery.” With vaccines rolling out across the country and lockdowns lifting, the economy has indeed been recovering, but with one notable caveat: Despite reopening, many businesses are still struggling to find employees.
The most likely culprit is the federal unemployment bonus that began during the Trump administration and continues today.
It’s important to first understand what the unemployment bonus is and why it may be keeping otherwise healthy people out of the labor force. The bonus is a federally funded $300 weekly supplement that is paid out in addition to state-provided unemployment benefits. These state unemployment benefits usually replace about half of an unemployed person’s weekly wages for several months as they search for new employment. While this amount varies by state, the average pre-bonus weekly payment is about $350.
The federal bonus, however, raised that amount to $650 or $2,600 per month—the equivalent of earning just under $34,000 per year. For some workers, particularly those working in sectors like restaurants or hospitality, the unemployment benefits pay more than their wages when working. In fact, the median personal income in the U.S. in 2019 was just slightly higher than this amount at $35,977.
Continue reading at Inside Sources.
Ben Wilterdink is the former Director of Programs at the Archbridge Institute. Follow him @bgwilterdink.
Economics of Flourishing
Economic prognosticators were abuzz last year with optimism about a so-called “V-shaped recovery.” With vaccines rolling out across the country and lockdowns lifting, the economy has indeed been recovering, but with one notable caveat: Despite reopening, many businesses are still struggling to find employees.
The most likely culprit is the federal unemployment bonus that began during the Trump administration and continues today.
It’s important to first understand what the unemployment bonus is and why it may be keeping otherwise healthy people out of the labor force. The bonus is a federally funded $300 weekly supplement that is paid out in addition to state-provided unemployment benefits. These state unemployment benefits usually replace about half of an unemployed person’s weekly wages for several months as they search for new employment. While this amount varies by state, the average pre-bonus weekly payment is about $350.
The federal bonus, however, raised that amount to $650 or $2,600 per month—the equivalent of earning just under $34,000 per year. For some workers, particularly those working in sectors like restaurants or hospitality, the unemployment benefits pay more than their wages when working. In fact, the median personal income in the U.S. in 2019 was just slightly higher than this amount at $35,977.
Continue reading at Inside Sources.
Ben Wilterdink
Ben Wilterdink is the former Director of Programs at the Archbridge Institute. Follow him @bgwilterdink.
Share:
Related Posts
Regulatory Reform Should Be a Top State Priority in 2025
Trump 2.0’s Impact on Social Mobility: The Good, the Bad, and the Uncertain
Michigan Can Do More for Social Mobility, Mackinac Center, Archbridge Institute Find