Coronavirus Relief Often Pays Workers More Than Work

When combined with state benefits, weekly government payouts create incentives that employers say complicate efforts to re-open businesses

Roughly half of all U.S. workers stand to earn more in unemployment benefits than they did at their jobs before the coronavirus pandemic shut down swaths of the U.S. economy, a result of government relief that employers say is complicating plans to re-open businesses.

The package of coronavirus stimulus laws Congress passed and President Trump signed in March included a $600 boost to weekly unemployment benefits through July 31. As that support is added to state benefits over the coming weeks, the average weekly payment to a laid-off worker should rise to about $978 from the nearly $378 the Labor Department said was paid on average late last year.

Qualified workers will receive the government payout every week through July, and in most cases, the combined $978 weekly payout amounts to better pay than what many workers received before the crisis hit. Labor Department statistics show half of full-time workers earned $957 or less each week in the first quarter of 2020.

The stimulus measure means that in coming months many low-wage workers will avoid both significant harm to their finances and the potential health risks—and further virus spread—of returning to crowded workplaces. That money in consumers’ pockets in turn puts the U.S. economy on firmer footing to rebound once authorities allow businesses to re-open.

But enhanced benefits also create disincentives that might hamper efforts by employers to recall workers when some states are trying to re-open their economies. It is possible that Workers could ask their bosses to leave them on furlough so they can collect the larger payments while avoiding health risks.

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