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IPFS News Link • Pandemic

Workers Are Asking to Be Laid Off, Because COVID-19 Unemployment Benefits Pay Better than Work

• https://fee.org, Hans Bader

Generous payments to the unemployed are encouraging layoffs. The coronavirus relief passed by Congress last month temporarily increased unemployment compensation by $600 per week, to more than low-income employees were receiving for working. As a result, some workers are asking to be laid off, because being unemployed pays better than working.

That's ironic, because the coronavirus relief legislation was supposed to prevent layoffs. In fact, it earmarked $350 billion for loans to small businesses, to enable them to keep their employees on the payroll. The loans can be forgiven if an employer keeps its workers and uses at least 75 percent of the loan for payroll costs.

So the federal government is simultaneously encouraging both employment and unemployment. And using your tax money to pursue both of these contradictory goals—the CARES Act spends $260 billion on expanded unemployment insurance.