Some people are earning more in unemployment benefits than they did while working, leaving little incentive to return to their jobs

Image
Some workers could earn more by getting laid off. Getty Images
  • Some people are earning more in unemployment benefits than they did while collecting a paycheck, according to reports.
  • A federal program pays $US600 per week in unemployment benefits, in addition to benefits paid out by states.
  • “Many businesses have employees coming in and saying ‘Can you please furlough me?,'” an attorney told the Times Union. “It’s creating a major problem for companies that are in limbo.”
  • Visit Business Insider’s homepage for more stories.

Unemployment benefits are paying some workers more than their regular wages, and it’s causing problems for some small business owners who want to call people back to work, according to several media reports.

Sky Marietta told NPR that she had to close her Harlan, Kentucky, coffee shop because her employees can earn more in unemployment than they would serving coffee for $US10 to $US15 per hour.

“We basically have this situation where it would be a logical choice for a lot of people to be unemployed,” Marietta told NPR.

“They’re hardworking individuals,” she added. “But literally this is the best possible pay of their lives they could possibly get, to be unemployed.”

Congress last month approved payouts of $US600 per week in unemployment benefits as part of a $US2.2 trillion coronavirus stimulus bill. The $US600 is added to unemployment benefits provided by states.

The $US600 bump makes collecting unemployment potentially more lucrative than earning a paycheck.

As Politico’s Ian Kullgren reported, laid-off workers could be collecting nearly $US1,000 in unemployment benefits, between the $US600 federal payment and state unemployment payouts, which averaged $US370 in 2019. By comparison, full-time food service workers earn about $US500 weekly in the US.

Some workers are now asking to be furloughed so they can collect unemployment, according to Mathew Tully, an attorney based in Albany, New York.

“Many businesses have employees coming in and saying ‘Can you please furlough me?'” Tully told the Times Union. “It’s creating a major problem for companies that are in limbo.”

If you are an employee or business owner who is impacted by the issues described in this article, contact this reporter at [email protected]