4 ms·

According to my calculation, minimum wage employees can now get twice in unemployment benefits (for at least 4 months) than his/her original wage. So based on

According to my calculation, minimum wage employees can now get twice in unemployment benefits (for at least 4 months) than his/her original wage. So based on that, even if the economy is open, I failed to see what would incentivize people to return to work.

throwanem 7y ago
Unemployment insurance payout per month is usually capped based on what you made at the job you had before you went on it. One assumes that will again be the case once the current crisis is considered to have ended. Unemployment insurance payouts are also time-bound. You don't go on unemployment and stay on it indefinitely; after a few months, barring a rare and hard-to-obtain extension, the benefit ends.
- streetcat1 7y ago
  Agree. So I assume that most of the unemployment is in the travel/hospitality/restaurants/retail (etc). Hence, even after the economy is open, it would be hard to get those people back to work until the "enhanced" benefits run out. I.e. I expect to see a lot of restaurants/hotels open but with no employees. Or, they will be employees, but their wages will have to be increased by 50%, which would cause runaway inflation. If this happens, this might lead to spike in automation (AI).
  - IAmEveryone 7y ago
    The industries you mention are unlikely to be amendable to increased automation. That’s why service jobs have grown over the last decade or so, compared with manufacturing. And paying supermarket cashiers decent wages isn’t going to create inflation because it doesn’t change the total amount of money in circulation. Productivity will just be redirected from building super yachts to poorer children’s school supplies (cliches for added clarity).
- _curious_ 7y ago
  "One assumes that will again be the case once the current crisis is considered to have ended." Let one not assume?
  - throwanem 7y ago
    It wouldn't be the worst idea, which is why I'm not optimistic that it will play out that way. At best, given that states administer unemployment insurance, I would expect to see a patchwork, with many of the states where it's most needed refusing to implement it.
IAmEveryone 7y ago
it’d be quite stupid to give up your job in this “economy” for a benefit limited to 4 months. Beyond that, it just shows that minimum wage is nowhere close to covering basic necessities, especially for families. Even if the mechanism you fear does start happening, the result would be that employers would (finally) have to raise wages. Win-Win!
- _curious_ 7y ago
  " it’d be quite stupid to give up your job in this “economy” for a benefit limited to 4 months." I think you are over estimating the masses...and under estimating the duration of the welfare.
_curious_ 7y ago
"...I failed to see what would incentivize people to return to work." If and as long as this maintains, they will not be. And from there, they will have re-adjusted to getting paid just as much (perhaps more) than they did before while now doing next to nothing. And that will bare a most interesting crossroads in America - finally and fully stripped of its collective values, work ethics and self reliance. Godspeed.

throwanem 7y ago

Unemployment insurance payout per month is usually capped based on what you made at the job you had before you went on it. One assumes that will again be the case once the current crisis is considered to have ended. Unemployment insurance payouts are also time-bound. You don't go on unemployment and stay on it indefinitely; after a few months, barring a rare and hard-to-obtain extension, the benefit ends.

streetcat1 7y ago
Agree. So I assume that most of the unemployment is in the travel/hospitality/restaurants/retail (etc). Hence, even after the economy is open, it would be hard to get those people back to work until the "enhanced" benefits run out. I.e. I expect to see a lot of restaurants/hotels open but with no employees. Or, they will be employees, but their wages will have to be increased by 50%, which would cause runaway inflation. If this happens, this might lead to spike in automation (AI).
- IAmEveryone 7y ago
  The industries you mention are unlikely to be amendable to increased automation. That’s why service jobs have grown over the last decade or so, compared with manufacturing. And paying supermarket cashiers decent wages isn’t going to create inflation because it doesn’t change the total amount of money in circulation. Productivity will just be redirected from building super yachts to poorer children’s school supplies (cliches for added clarity).
_curious_ 7y ago
"One assumes that will again be the case once the current crisis is considered to have ended." Let one not assume?
- throwanem 7y ago
  It wouldn't be the worst idea, which is why I'm not optimistic that it will play out that way. At best, given that states administer unemployment insurance, I would expect to see a patchwork, with many of the states where it's most needed refusing to implement it.

IAmEveryone 7y ago

it’d be quite stupid to give up your job in this “economy” for a benefit limited to 4 months. Beyond that, it just shows that minimum wage is nowhere close to covering basic necessities, especially for families. Even if the mechanism you fear does start happening, the result would be that employers would (finally) have to raise wages. Win-Win!

_curious_ 7y ago
" it’d be quite stupid to give up your job in this “economy” for a benefit limited to 4 months." I think you are over estimating the masses...and under estimating the duration of the welfare.

_curious_ 7y ago

"...I failed to see what would incentivize people to return to work." If and as long as this maintains, they will not be. And from there, they will have re-adjusted to getting paid just as much (perhaps more) than they did before while now doing next to nothing. And that will bare a most interesting crossroads in America - finally and fully stripped of its collective values, work ethics and self reliance. Godspeed.