CNBC reported last month that there are 8.6 million people considered out of work, and nearly 10 million job openings, yet filling those jobs has been a challenge.
The reason, of course, is that millions of Americans realized that they could earn more money at home collecting government checks than at a job due to COVID unemployment benefits.
An analysis from the University of Chicago from last year found that “76% of workers eligible for regular Unemployment Compensation have statutory replacement rates above 100%, meaning that they are eligible for benefits which exceed lost wages” between April and July of 2020, with the median statutory replacement rate being 145 percent.
Why any government relief program wouldn’t have a cap on benefits to prevent people from making more than they were while working is beyond my comprehension, but it happened, and results have been a disaster. Chances are good you’ve seen restaurants and other small businesses struggle to stay open lately—not because of a lack of customers, but a lack of adequate staffing. To entice people off the COVID benefits gravy train, I’ve even seen huge signing bonuses offered for people who get a job at a national fast-food chain. Sadly, small businesses find themselves struggling to compete with these chains because they can afford neither the salaries they’re offering for low-skill labor or the signing bonuses to get them in the door to apply. Even some regional chains are operating at reduced hours because of employment shortages.
But things might be changing soon, as pandemic relief benefits ended Monday for millions of Americans.
Forbes noted four different types of federal unemployment benefits that ended: Federal Pandemic Unemployment Compensation, Pandemic Emergency Unemployment Compensation, Mixed Earners Unemployment Compensation, and Pandemic Unemployment Assistance.
According to one estimate, 7.5 million Americans will lose these benefits, representing the largest cessation of unemployment benefits in history.
And let’s hope it gets people off their couches and applying for jobs again. Unfortunately, a program meant to help people through the worst of the pandemic instead became a reason not to work at all. Such a scenario is not sustainable. And while the left shed faux tears for the workers who will suddenly find their mailboxes devoid of government checks for doing nothing, they don’t realize the overall impact the lack of workers has had on struggling small business owners and how that impacts local economies.
So, while we’ve had several disappointing jobs reports lately, that could change. Joe Biden has always rushed to take credit for any job created from the country’s reopening, even claiming his policies were responsible for them. Sadly, should the end of these pandemic benefits result in a surge of employment, Biden will try to take credit for that too—even though he’s urged Congress to extend pandemic relief. If only these benefits had ended sooner. How many businesses shut down for good because they couldn’t remain open long enough? Still, it is possible that the end of these benefits could be the best thing to happen to Biden’s presidency, as millions once again discover that the secret to making money is working for it.