COVID Economy

[warriorchick]

Where we live in rural Wisconsin, there are advertisements on the radio for several employers seeking unskilled or semi-skilled workers.

I have heard pay rates quoted between $17 and $22 an hour. They are offering paid vacations, medical, dental, and 401k contributions. Some are offering signing bonuses up to $2000 and commuting subsidies if you live farther away. This is in an area where you buy a home with that income.

I have a friend who owns a small business in the area, and even though she is offering above market wages, she says that she can't find people to work for her because people make more money by collecting unemployment.

It sounds to me that they might want to consider eliminating the broad unemployment subsidy and focus it in areas where Covid is still causing job shortages.

[MU82]

Hmmm ... I don’t think people make that kind of money collecting unemployment benefits, chick. They sure as heck don’t in NC. And the national subsidy is only, what, $400/week? And there are no health benefits. And in most states unemployment benefits are capped at X number of weeks.

[The Hippie Satan of Hyperbole]

Hmmm ... I don’t think people make that kind of money collecting unemployment benefits, chick. They sure as heck don’t in NC. And the national subsidy is only, what, $400/week? And there are no health benefits. And in most states unemployment benefits are capped at X number of weeks.

$300.

Anecdotal evidence is really just anecdotal.

[pacearrow02]

Hmmm ... I don’t think people make that kind of money collecting unemployment benefits, chick. They sure as heck don’t in NC. And the national subsidy is only, what, $400/week? And there are no health benefits. And in most states unemployment benefits are capped at X number of weeks.

The federal subsidy of $400/week plus your state UE chipped in weekly ($3-400) and you’re making about 45,000 a year or $22-$23 an hour for doing squat.  Not to shabby!!

[JWags85]

$300.

Anecdotal evidence is really just anecdotal.

We have been using Wisconsin’s work share since last summer.  We recently were approved for our second 6 month run.  You work a reduced week, between 40-90% of normal hours, and get scaled unemployment for the rest. However, you are still eligible for the additional $300.

We mentioned it to people we knew in conversation. They haven’t been negatively affected by COVID at all, but applied and moved a bunch of their employees to 36 hours a week. The unemployment is negligible, but the majority are making substantially more due to an extra $1200 a month that more than covers the 10% of their salary they are forgoing. Gaming the system.

But that’s just anecdotal. The true purpose of the Work Share was a vital lifeline for us the second half of 2020 and allowed us to not only survive, but build back comfortably to the point we are profitable.  I’m sure some other people are making more than their normal salaries with the weekly $300 federal bump and a work share, but the vast majority are just staying alive with a great and underused program 

[MU82]

The federal subsidy of $400/week plus your state UE chipped in weekly ($3-400) and you’re making about 45,000 a year or $22-$23 an hour for doing squat.  Not to shabby!!

You are vastly overstating the “haul” of the average person on unemployment benefits IMHO.

And again, what happens when state benefits run out? In NC, that happens after only 13 weeks. Those who have been unemployed since the early days of the pandemic haven’t received state benefits in most states for quite some time.

$300 times 52 is $15,600.

Shabby!!

[MU Fan in Connecticut]

Where we live in rural Wisconsin, there are advertisements on the radio for several employers seeking unskilled or semi-skilled workers.

I have heard pay rates quoted between $17 and $22 an hour. They are offering paid vacations, medical, dental, and 401k contributions. Some are offering signing bonuses up to $2000 and commuting subsidies if you live farther away. This is in an area where you buy a home with that income.

I have a friend who owns a small business in the area, and even though she is offering above market wages, she says that she can't find people to work for her because people make more money by collecting unemployment.

It sounds to me that they might want to consider eliminating the broad unemployment subsidy and focus it in areas where Covid is still causing job shortages.

Our Appleton plant is offering like $29 per hour and signing bonuses.  Doing billboards and radio ads and still having problems finding new employees.  It was a big issue for them before the pandemic, so I don't know what's up in northern Wisconsin? 

[MU82]

It was a big issue for them before the pandemic

This.

For quite some time now, there has been difficulty luring employees to lots of jobs. Farming and other agricultural jobs for obvious reasons -- the work is very difficult, and the pay isn't great. Same with other manual labor jobs. Also, many shortages in teachers, nurses, nursing aides, etc etc -- groups that have been historically underpaid and overworked in a lot of areas of the country.

I don't know why the Appleton plant can't get people to take their jobs, though. Maybe when we were at close to full employment before the pandemic, the jobs were seen as unattractive for the wages offered, and now it's just a matter of inertia? Who knows.

One thing it isn't: People living high on the hog on the $300/week in federal unemployment  benefits, especially after their state benefits run out.

[Goose]

Inflation is real and coming our way. The consumer is going to be hit in the pocket book very soon. Folks are going to need the $22+ an hour job before the year is out.

[pacearrow02]

This.

For quite some time now, there has been difficulty luring employees to lots of jobs. Farming and other agricultural jobs for obvious reasons -- the work is very difficult, and the pay isn't great. Same with other manual labor jobs. Also, many shortages in teachers, nurses, nursing aides, etc etc -- groups that have been historically underpaid and overworked in a lot of areas of the country.

I don't know why the Appleton plant can't get people to take their jobs, though. Maybe when we were at close to full employment before the pandemic, the jobs were seen as unattractive for the wages offered, and now it's just a matter of inertia? Who knows.

One thing it isn't: People living high on the hog on the $300/week in federal unemployment  benefits, especially after their state benefits run out.

Agree 100% that once state benefits run out that federal kick in would be very difficult to live on. 

Wonder if the combination of multiple stimulus packages, increased UE benefits, tax returns coming in, and areas where kids still aren’t in school is just delaying folks from pulling the trigger.  There’s obviously something holding them back.

[Hards Alumni]

Inflation is real and coming our way. The consumer is going to be hit in the pocket book very soon. Folks are going to need the $22+ an hour job before the year is out.

I have personal concerns about what happens when wages can't adjust quick enough. 

[MU82]

Agree 100% that once state benefits run out that federal kick in would be very difficult to live on. 

Wonder if the combination of multiple stimulus packages, increased UE benefits, tax returns coming in, and areas where kids still aren’t in school is just delaying folks from pulling the trigger.  There’s obviously something holding them back.

Perhaps.

[Jockey]

Inflation is real and coming our way. The consumer is going to be hit in the pocket book very soon. Folks are going to need the $22+ an hour job before the year is out.

I disagree, Goose. The Fed has been trying for a while to get inflation up to the 2% range and are having no luck.

I hope you are partially correct though and we can reach 2% later this year.

[Coleman]

Where we live in rural Wisconsin, there are advertisements on the radio for several employers seeking unskilled or semi-skilled workers.

I have heard pay rates quoted between $17 and $22 an hour. They are offering paid vacations, medical, dental, and 401k contributions. Some are offering signing bonuses up to $2000 and commuting subsidies if you live farther away. This is in an area where you buy a home with that income.

I have a friend who owns a small business in the area, and even though she is offering above market wages, she says that she can't find people to work for her because people make more money by collecting unemployment.

It sounds to me that they might want to consider eliminating the broad unemployment subsidy and focus it in areas where Covid is still causing job shortages.

I'm curious what data you are basing your conclusion on that shows these labor shortages are due to unemployment benefits vs. people largely leaving rural areas, which is a trend that has been going on for a long time.

I don't doubt what you say about employers trying to lure workers to these quiet corners of the state, as I'm sure jobs may be hard to fill. But I doubt unemployment benefits are the culprit. Unemployment claims are decreasing as they have been all spring. We will have an even better picture this Friday with the jobs numbers which are expected to be blockbuster.

People want to work. Even with the extra COVID unemployment money, a job with health/dental insurance and a 401k is going to be a better option 99% of the time. The exception may be a single mother with young kids, but if she had child care I bet you she'd still rather work.

[warriorchick]

I'm curious what data you are basing your conclusion on that shows these labor shortages are due to unemployment benefits vs. people largely leaving rural areas, which is a trend that has been going on for a long time.

I don't doubt what you say about employers trying to lure workers to these quiet corners of the state, as I'm sure jobs may be hard to fill. But I doubt unemployment benefits are the culprit. Unemployment claims are decreasing as they have been all spring. We will have an even better picture this Friday with the jobs numbers which are expected to be blockbuster.

People want to work. Even with the extra COVID unemployment money, a job with health/dental insurance and a 401k is going to be a better option 99% of the time. The exception may be a single mother with young kids, but if she had child care I bet you she'd still rather work.

My point wasn't that they should do away with enhanced unemployment altogether, but perhaps it should be targeted to areas where jobs are scarce. Jobs do not appear to be scarce in our area.

[Coleman]

My point wasn't that they should do away with enhanced unemployment altogether, but perhaps it should be targeted to areas where jobs are scarce. Jobs do not appear to be scarce in our area.

That’s fair, and actually an interesting idea.

[bananahammock]

Lack of workers is becoming a major issue for many companies. I agree that adjustments are needed to the current unemployment compensation.

[Billy Hoyle]

Lack of workers is becoming a major issue for many companies. I agree that adjustments are needed to the current unemployment compensation.

some of my wife's clients in the restaurant industry are having trouble hiring, even though with tips employees would make nearly $20/hour and some are even providing "signing bonuses." It's not because of a lack of candidates, they're being told by candidates can make more on unemployment instead.

[naginiF]

some of my wife's clients in the restaurant industry are having trouble hiring, even though with tips employees would make nearly $20/hour and some are even providing "signing bonuses." It's not because of a lack of candidates, they're being told by candidates can make more on unemployment instead.

In MO if you made $50,000 in 2020 you would receive $320/wk or $1376/mo unemployment insurance. A person would only have to work 68.8 hours in a month @ $20/hr to earn that. Income tax isn't included in this equation but $50K/yr ~ $25/hr so the math is pretty close.

So, either the clients are not offering employees more that 16 hours of work per week or their story is BS.

Either way $1376/month is NOT keeping people from taking jobs.

[Billy Hoyle]

In MO if you made $50,000 in 2020 you would receive $320/wk or $1376/mo unemployment insurance. A person would only have to work 68.8 hours in a month @ $20/hr to earn that. Income tax isn't included in this equation but $50K/yr ~ $25/hr so the math is pretty close.

So, either the clients are not offering employees more that 16 hours of work per week or their story is BS.

Either way $1376/month is NOT keeping people from taking jobs.

Oregon is $476/week plus the $400, which comes out to nearly $22/hour. Plus, UE is untaxed.

[JWags85]

Oregon is $476/week plus the $400, which comes out to nearly $22/hour. Plus, UE is untaxed.

Yea. It varies and it’s empirical, but most people saying there is no way that people are turning down work are forgetting the additional tax free $1200-1600 a month

[Coleman]

Only first $10,200 is untaxed. Otherwise UE is taxed.

[naginiF]

Oregon is $476/week plus the $400, which comes out to nearly $22/hour. Plus, UE is untaxed.

I must still be missing something in the equation.

If we assume for the sake of discussion that with/without taxes a person nets $1,500 per month take home. That's still only $18,000 per year which is @ or below the poverty line for households with 2+ members (setting aside the conversation that the poverty level for a single person is set at $12,880 and whether anyone could actually live on that).

People are walking away from jobs to live close to the poverty line? And if that is the case, is the problem the unemployment insurance, the wage, or something else?

[jesmu84]

https://www.washingtonpost.com/us-policy/2021/05/05/labor-shortage-inflation-white-house/

I'm also reading interesting stuff about lumbar. Certainly a lot of talk about the large increase in lumbar price effecting housing and construction projects. Initially, I believed this was tied to lack of supply. But that, apparently, isn't the whole story. There's huge stockpiles of raw lumbar available right now. But in the initial pandemic, mills didn't believe their product would be needed because there would be shutdowns and economic downturn. When available supply at the end supply chain was quickly used, mills and early supple chain folks realized their chance to make $$$ and so are demanding top dollar for their product despite an abundance of materials.

[JWags85]

I must still be missing something in the equation.

If we assume for the sake of discussion that with/without taxes a person nets $1,500 per month take home. That's still only $18,000 per year which is @ or below the poverty line for households with 2+ members (setting aside the conversation that the poverty level for a single person is set at $12,880 and whether anyone could actually live on that).

People are walking away from jobs to live close to the poverty line? And if that is the case, is the problem the unemployment insurance, the wage, or something else?

$476+400 is 876 a week or around $3500 pretax. That’s closer to $2400 after tax assuming it’s all taxed.