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Businesses Complain Generous Jobless Benefits Make It Hard To Find Workers


Tens of millions of people are out of work because of the coronavirus. But if they apply for unemployment, they get $600 a week, which is more than some were making in their previous jobs. That was a deliberate effort by Congress to cushion the economic fallout from the pandemic, but now those benefits are getting a second look. Here's NPR chief economics correspondent Scott Horsley.

SCOTT HORSLEY, BYLINE: Preschool teacher Lainie Morris has been out of work for more than two months, but the Portland, Ore., child care center where she worked is thinking about reopening. Morris is dreading it, as much as she loves the infants and toddlers she used to care for.

LAINIE MORRIS: They always have snotty faces. It's just one cold after another. That's just the name of the game in day care (laughter). And it feels just like an epicenter for spreading disease, and it feels really scary to go back to that.

HORSLEY: Preschool teachers don't make a lot of money. Thanks to the extra $600 a week in unemployment benefits the federal government's been offering during the pandemic, Morris is actually making more now than she did on the job. She'd hate to give that up if she and her fellow preschool teachers are called back to work.

MORRIS: It's terrible to say, but we're all doing better now. It's hard to think about going back to work in this pandemic and getting paid less than we are right now, where we're safe and at home and in quarantine.

HORSLEY: Avery Adams of Gravel Switch, Ky., is in no hurry to go back to work, either. The Cracker Barrel restaurant where he worked has just started offering limited indoor dining again, after weeks of takeout-only service. Adams is worried, though; too many people are still getting sick.

AVERY ADAMS: I don't feel like it's over yet. I would wait to see, as things reopen, if the caseload increases again.

HORSLEY: For now, Adams has decided to stay home, mostly out of concern for the four elderly relatives he lives with. But the extra $600 a week in unemployment he's receiving did factor into his decision.

ADAMS: I would say it has to, to some extent. It still really needs to be more about my family memories, but it's been very generous having the CARES Act.

HORSLEY: Some business owners complain that generous unemployment benefits are making it harder for them to find workers. Rachel Davis runs a consignment shop in Warrensburg, Mo. Since reopening this month, she's been buying hand sanitizer by the gallon. Disinfectant is my new fragrance, she jokes. She's limiting traffic in the store to three customers at a time, and everyone who comes in must wear a mask.

RACHEL DAVIS: Customers have thanked us for that, and my sales are actually up since we reopened.

HORSLEY: Davis also gave her part-time employees a modest raise. But the $10 to $11 an hour they make is far less than they were collecting on unemployment. One of her four workers has not come back.

DAVIS: I know I shouldn't take it personally, that she's doing what she feels is in her best interest, but as an employer, it actually kind of hurt.

HORSLEY: Economists at the University of Chicago estimate more than two-thirds of the workers on unemployment are making more in jobless benefits than they did at work - in some cases, two to three times as much. That's a stark reminder of just how low the pay is in many hard-hit industries. When millions of low-wage workers were suddenly forced to stop working to protect public health, economist Joseph Vavra says there were good reasons for the federal government to step in with some relief.

JOSEPH VAVRA: Getting people money today so that, you know, you can buy groceries and not go hungry, getting people money so they can pay their rent, the basic necessities of life - kind of makes sense.

HORSLEY: Still, Vavra and his colleague Peter Ganong say the flat $600-a-week benefit does create questions of fairness, especially when other low-income workers are still on the job doing essential work.

VAVRA: If you're a janitor and you work at a hospital, you are facing increased risk at your job and likely have not received a pay raise. But if you're a janitor and you worked at a school that's shut down, then you actually get a 50% raise from claiming unemployment benefits.

HORSLEY: Likewise, retail workers on furlough are collecting 42% more on average from unemployment than the grocery workers who are still busy stocking shelves. The $600-a-week benefits are set to expire at the end of July, and Congress has to decide whether to extend them. Ganong and Vavra argue, with double-digit unemployment, maintaining some kind of increased benefits will be vital, but they suggest those benefits could be more closely tied to workers' old paychecks so as not to discourage a return to work.

Sonya Chartier and her husband opted not to go back to their old jobs with a Wisconsin furniture store. Customers there aren't required to wear masks, and Chartier worries about infecting her mother-in-law.

SONYA CHARTIER: We're lucky, and we can decide to stay home. And I'm grateful for that, and I know so many people can't make that decision, and it's really hard. But we don't feel like it's safe to go out yet.

HORSLEY: Chartier knows turning down her old job may cost her unemployment benefits, and she's started to look for new jobs, maybe ones she can do from home or while otherwise avoiding risk. Her No. 1 question for would-be employers - what are you doing to protect your workers?

Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.