Make More Money Staying Unemployed?


The economic relief bill passed in March of 2020 has increased unemployment benefits by an extra $600 per week. This is has created a situation where many people are making more money unemployed than they would fully employed.

Some Pros:

  • Provides most benefit as a percentage to low income earners
  • Gives those in financial need a quick solution to a problem they didn’t create
  • Takes pressure off people to go back to work while they follow social distancing guidelines
  • Reveals the true value/cost of supplement benefits such as health insurance. It also shows employers the value of employees.

Some Cons:

  • Provides a disincentive to go back to work
  • Strains the already weak unemployment program in many states
  • Is a short term solution that may put those on unemployment at risk of long-term unemployment when a large group of people begin searching for work at the same time
  • Slows overall economic activity
  • Pits employers who are getting Payroll Protection Program loans to rehire employees against those same employees who make more by not going back.

Conclusion: Making more on unemployment than working full time is a temporary situation. The extra money will end at some point and those people will need to go back to work. There is more value in maintaining steady employment than in getting extra unemployment benefits. However, it is tough to suggest to anyone who is getting paid more not to work, to actually go back to work. Just don’t forget to think long-term.

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