Some jobless workers make more in unemployment benefits than lost wages. So why look for work?
Washington has the second most generous unemployment benefit in the nation — a benefit that critics contend will cause people to stay home rather than look for work because they can have a better income staying jobless.
Maximum unemployment payment in Washington is currently $1,390 per week, or an annualized $72,280. That’s second only to Massachusetts, where the annualized maximum benefit is $73,996. Lowest is Mississippi, at $43,420. The data were compiled by Zippia, a Millbrae, California-based firm that helps people find jobs and careers.
It’s unlikely that anyone’s jobless benefit will reach those annual totals, since it’s boosted by a $600 a week federal payment approved March 27 but due to end at the end of July. Some Capitol lawmakers are pushing to extend the higher federal benefits if the economic downturn persists..
Concern about the prospect of paying people more than they were earning has been flaring for weeks on Capitol Hill and in the world of economic analysts.
“If you can get more from unemployment than you can working, why would you go back?” asked Rachel Greszler, research fellow at the Heritage Foundation, a conservative research group. “We shouldn’t be paying more to people not working than their co-workers who go back to work.”
JP Morgan reported this week that 65% to 75% of workers laid off nationwide “may be receiving more state and local unemployment benefits than lost wages,” at least until the current $600 program expires at the end of July.
Median income for an individual this year in Washington is an estimated $50,944, and for a family of four, $97,788, according to state government data.
In Congress, some lawmakers contend the current benefits don’t go far enough, and they’ve proposed extending extra payments as long as the country remains in an emergency situation.
“Usually unemployment assistance is very much not full wage replacement because the government wants able-bodied people to go out and pound the pavement and knock on doors and look for alternative work,” said Rep. Derek Kilmer, D-Washington.
While some people have been able to find other work, Kilmer said, “right now, public health professionals don’t want folks out pounding the pavement. Temporary assistance doesn’t replace a permanent job, but may be necessary when someone has lost their job at no fault of their own.”
Thursday, Sen. Ron Wyden, D-Oregon, unveiled a plan that would keep the extra benefit at $600 per week until a state’s three-month average total unemployment rate fell below 11%. The amount of the benefit would drop slowly as the state’s rate dropped. Another proposal from Democrats, including Kilmer, would tie expanded unemployment benefits to public health emergency and economic conditions
Washington has been hit hard by the economic downturn triggered by the coronavirus outbreak in March. The News Tribune reported Thursday that since March 7, the Employment Security Department has provided more than $1.5 billion in unemployment benefits across Washington.
An estimated 36% of those with completed unemployment filing have not gotten payments, department spokesperson, Jim Vleming told The News Tribune.
Last week, the state saw 109,167 new claims filed, down from 139,505 the previous week, but still far greater than the re-coronavirus numbers.
A Senate effort to cap unemployment benefits at 100% of a person’s wages failed but got 48 votes. Sen. Ben Sasse, R-Nebraska, who led that effort in March, called paying someone more than they earned “a perverse incentive for men and women who are sidelined to then not leave the sidelines and come back to work.”
Greszler said that people with child care obligations, or who were concerned about illness, do have legitimate incentives not to work.
Certainly, she said, there are good reasons for paying unemployment insurance. The coronavirus crisis has triggered an economic downturn like no other since the Great Depression, but that doesn’t mean paying people more than they were making as employees.
“The benefit should have been up to 100% rather than a blanket $600 a week to everybody,” she said.
A Washington Post-Ipsos poll released Thursday found 77% of laid-off workers expect to get their jobs back once stay-at-home orders are lifted, though many economists find that optimism unrealistic.
The nonpartisan Congressional Budget Office estimated that the national unemployment rate will average 15 percent during the second and third quarters of 2020.
Not until the fall is a rebound expected.
“The labor market is expected to improve after the third quarter, with a rebound in hiring and a significant reduction in furloughs as the degree of social distancing diminishes—leading to an increase in business activity and an increase in the demand for workers,” CBO reported.
At Zippia, marketing manager Kathy Morris saw workers eager to go back to work.
“While some job seekers may be incentivized to stay home, perhaps for money, due to child care needs and concerns for safety, I think many job seekers will be eager to secure a job,” she said.
At that time, said Morris, “the newly unemployed are also going to enter a tight, aggressive job market, so may not find securing a job as easy as it was a few months ago,” so they may continue to need government help.
This story was originally published May 7, 2020 at 6:03 PM with the headline "Some jobless workers make more in unemployment benefits than lost wages. So why look for work?."
.jpg)