Many Americans are getting more money from unemployment than from their job

https://fivethirtyeight.com/features/many-americans-are-getting-more-money-from-unemployment-than-they-were-from-their-jobs/

by paulpauper • 6 years ago

62 93 6 years ago

fivethirtyeight.com

sfoblows• 6 years ago

FYI: Americans = Really poor people who will probably never get their job back.

mehrdadn• 6 years ago

The question is whether this will be a problem as the economy starts to reopen.

Isn't the question whether the economy should reopen?

giantg25• 6 years ago

"The question is whether our totally antiquated systems will be capable of pulling that off."

COBOL anyone?

sushshshsh• 6 years ago

Easiest thing to do at this point would be an excel spreadsheet and a single employee who venmos everyone their unemployment manually.

giantg25• 6 years ago

I had a COBOL class and sort of liked it. The debugging wasn't great and the JCL can be tricky, but it wasn't bad.

The real problem is that companies/goverments didn't anticipate the retirement of COBOL resources. Nobody wants to train anyone or give them a career. They all want to hire senior people.

I see a similar trend emerging in other technologies. I see tons of senior positions but very few positions where the company will provide training. Even internal transfers at my company provide zero training.

reaperducer• 6 years ago

This is a broad generalization, and for most unemployed Americans, wrong.

The New York Times did a very large, good chart about this a few months ago. Only people in about half of the American states might possibly end up getting more while unemployed than they did at work. The way some states' unemployment systems are set up, it's simply not possible.

Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.

The whole "Americans are making more money from not working" is not only a three-month-old meme, it's only true in a small percentage of cases. The only thing it is good for is getting people like my mother riled up with, "People aren't working because they're getting too much unemployment!" Completely ignoring the fact that there simply are no jobs to be had, and businesses are still shutting down left and right.

But, each to her own bubble.

WWLink3• 6 years ago

Eh, it'll do plenty to trigger the "You WORK FOR A LIVING and if you aren't working you should be eating shit!" people.

glofish6• 6 years ago

I don't see how having only 50% make more is any less ludicrous.

Should anyone ever make more money while unemployed than when employed?

Won't that completely alter the valuation of work and with that the proper functioning of the economy?

PS I know people that own businesses that can't reopen because people that usually would work for them don't want to come back as the salary he pays is less than the unemployment benefit.

kingkawn• 6 years ago

It just means that they’ve all been wildly underpaid, not that unemployment is overpaying

TAForObvReasons• 6 years ago

The more interesting question is whether wages were too low to begin with. Plenty of evidence points to wage stagnation in the lower-wage jobs starting in the 1980s and continuing to today. A huge number of americans collecting SNAP benefits actually work at companies like Walmart and Amazon. Is it possible the answer to the question is "we should pay workers more"?

throwanem9• 6 years ago

So, what I hear you saying is that he can't compete in a seller's market for labor.

landryraccoon4• 6 years ago

Isn't the ultimate goal of technology for no one to have to work unless they want to, while providing utopian material abundance to everyone regardless of whether they work? Of course this isn't possible with our current level of technology, but isn't that what we are striving towards?

I mean, what's the point of building AI and robots and advanced energy sources and bio engineering if they don't fundamentally improve the quality of life for everyone? I certainly don't think there's some moral requirement to force everyone to work.

arcticbull3• 6 years ago

No, nobody should ever make more unemployed than unemployed, and that just shows that we need to raise the minimum wage -- not lower unemployment benefits.

happytoexplain2• 6 years ago

Should anyone ever make more money while unemployed than when employed?

No, but of course the fault lies somewhere between unemployment being too high and wages being too low.

skwb3• 6 years ago

Because we don't have any efficient way for states to figure out exactly how much people were making before. Lawmakers have been on a campaign to defund, stifle, and keep unemployment insurance hard to access. This has resulted in ancient systems (even by government standards) that makes it very hard to figure out how much people make.

I cannot find the specific reference for it, but I believe I heard people saying some of these systems were having a hard time paying out over $1,000 a month because they were so old and outdated.

This is the case of "don't let the enemy of the perfect be the enemy of the good" that is repeated a lot in policy making. Sure, we could create a more perfect solution, but what are the costs associated with crafting that perfect solution under the specified given time frame?

https://www.cnbc.com/2020/06/19/outdated-technology-may-slow...

https://www.marketplace.org/2020/06/05/when-does-the-expande...

mnm1• 6 years ago

Should anyone ever make more money while unemployed than when employed?

Yes. During a pandemic or other disaster where they are intentionally paid to stay at home like the one we're currently in.

rayiner• 6 years ago

What’s the point of looking at the number of states? Most people are getting more in unemployment than they made before.

A new analysis by Peter Ganong, Pascal Noel and Joseph Vavra, economists at the University of Chicago, uses government data from 2019 to estimate that 68 percent of unemployed workers who can receive benefits are eligible for payments that are greater than their lost earnings

jfrankamp• 6 years ago

eligible

Do you read eligible as "getting"?

votepaunchy• 6 years ago

Further, it can only happen if the unemployed person qualifies for the maximum benefit in their state, which the vast majority of unemployed people do not.

This is backwards. The lower the income the greater the relative benefit from the fixed $600 assistance since as a rule of thumb unemployment pays a little over half of the replacement wage.

The simple solution would be for the government to also pay employed low-wage workers. Then, everyone can continue to buy food and pay rent and no one is earning less while working.

skwb3• 6 years ago

The $600 UI benefits were mostly done as a means of practicality, because our unemployment systems were so out of date to efficiently calculate someone's actual wage. It's sorta a general broad stroke implimentation that figured that sure, some people may be "overpaid" compared to their regular wage, but the political necessity of passing it ASAP was so great that any delay would be immensely costly.

jellicle• 6 years ago

for most unemployed Americans, wrong.

It's 100% wrong as of today (the article is from May), as the $600 supplement has expired and won't be renewed. In fact I'm not sure why HN is discussing an expired, won't-be-renewed program as if it is current.

dragonwriter7• 6 years ago

Because it's actually being debated right now as to whether to replace it with the same, less, or nothing, and setting perception about particular ways is in the interests of people who want a particular outcome of that debate to either occur and not have its supporters politically punished at the upcoming election, or, OTOH, to not occur and have its supporters punished at the election.

drtillberg• 6 years ago

Two words:

Health care.

The folks arguing this in Congress seem never to have faced the practical issues that come with loss of employment.

Plus, I'll gander that among the 32% who qualified for the benefits noted, but whose income was still not replaced during the relevant time period-- the shortfall probably was 50% on average or more. So we cut that benefit because many low-wage-earners are receiving too much? Really? Sometimes it's hard to believe political discussion in the U.S. has devolved to this.

majormajor• 6 years ago

Everyone seems to be acting as if this was ever going to be a permanent thing rather than an extraordinary measure for extraordinary times.

The people who should have something to say here are the ones making less who didn't lose their "essential" jobs.

That points at an even simpler solution: toss some free shit to everyone. Yes, it's ultimately paid for by everyone's taxes, etc, etc, but there's no way around this pandemic having a very high economic cost. It's just a question of tackling it actively and having that cost go towards productive programs, or paying to deal with the disaster that's resulting from our government being incompetent.

throwanem9• 6 years ago

Were getting. The article is from May. The CARES Act benefit, which it describes, expired today. https://www.cnet.com/personal-finance/extra-600-cares-act-un...

mzs• 6 years ago

And also having an incentive for more people to stay home during a pandemic might even be wise.

detaro• 6 years ago

And apparently some people still haven't gotten anything because the state systems still haven't gotten around to processing their claims.

bzb3• 6 years ago

The way it's always worked in southern Europe, hence the high unemployment rates.

WWLink3• 6 years ago

I thought that was intentional, to make sure that people stayed home instead of looking for extra work.

OminousWeapons• 6 years ago

Yeah I'm mystified that people are harping on this. The entire point of overshooting wages is that the economy isn't ready to fully reopen and so we want to create incentives for people to stay home.

sjs7007• 6 years ago

That'd make sense only if everyone had that option. Right now this led to people who are risking their lives and out there working potentially earning less than the people who are at home not working.

WWLink3• 6 years ago

Putting my "free market" hat on for a moment, the people who are risking their lives are in an advantageous situation for bargaining. To some degree, it worked too! Lots of stores and delivery services appeared to be paying more.

I think people often look at this with the "glass half empty" viewpoint though. "PERSON A MAKES MORE THAN I DO! THEY SHOULD GET LESS!" Why not think "PERSON A MAKES MORE THAN I DO! I SHOULD MAKE MORE!"

pokstad• 6 years ago

Pretty sure it was because the states had outdated computer systems to send funds to the right places:

Treasury Secretary Steve Mnuchin said in March on Fox News that the $600 bonus was chosen because states' computer systems are more than 30 years old. Reprogramming the computers to achieve what he described as a more nuanced distribution of money would have taken too long.
“In certain states, that might be a little bit too much money. In other states, it’s less money. It’s not a perfect system, but the president’s objective was to make sure we get money in people's hands,” Mnuchin said.

Source: https://www.usatoday.com/story/news/factcheck/2020/04/13/fac...

garraeth• 6 years ago

Anecdotally, no.

My sister was able to re-open and she had the hardest time convincing her workers to return simply because of this fact.

Some never returned. Why would they?

Has nothing to do with safety or trying to keep people at home.

williamscales• 6 years ago

I don't quite understand how this happens. I'm under the impression that when you are offered your job back, you have to either take it or go off of unemployment.

claudeganon• 6 years ago

...because unemployment checks are the only thing preventing a broader, systemic collapse when millions can’t pay for their housing, healthcare, and consumer demand implodes. Now that the extra benefit has expired, we’re in for for some real uncharted waters.

dragonwriter7• 6 years ago

...because unemployment checks are the only thing preventing a broader, systemic collapse when millions can’t pay for their housing, healthcare, and consumer demand implodes.

One of many necessary things, but not the only thing or sufficient by itself. Eviction protections, etc., are also part of the mix.

zozin• 6 years ago

I hope people are saving their temporary unemployment benefits. State budgets are tapped out and even the most generous states only give ~9 months worth of benefits. Come January/February whatever Congress passes will expire again and so will state benefits. Right in time for what amounts as the worst months for virus contagiousness.

Strap in everyone, 2021 might be worse than 2020.

nodesocket2• 6 years ago

Naval Ravikant (of AngelList) nailed the problem with government pay subsidies on a podcast with Joe Rogan.

"A slippery slide transfer straight into socialism. The moment people can start voting themselves money, combined with democracy it's just a matter of time before the bottom 51 votes themselves into the top 49. By the way, the slippery slope fallacy is not a fallacy; they haven’t thought it through.”

"The moment you start having a direct transfer mechanism like that in democracy, you're basically doing away with capitalism which is the engine of economic growth. You're also forcing the entrepreneur out, or telling them not to come here."

"People who are down on their luck, they're not looking for handouts. It's not just about money, it's also about status and meaning. The moment I start giving money to you, I've lowered your status and made you a second class citizen.”

"You have to teach a man to fish, not to basically throw your rod in and eat the leftover scraps."

throwanem9• 6 years ago

That sure is a pile of quotes. I love the assumption that the problem is people just not wanting to learn how to fish. What has he, or have you, to back that assumption up? Evidence, please, not more assertions that read as if they fell through a hole in time from the red-baiting 1950s, when you really could just up and get a job that paid a living wage most places.

nodesocket2• 6 years ago

What has he, or have you, to back that assumption up

I'm not exactly sure what you mean, but Naval does talk about his very modest upbringing, basically coming from nothing. His single mom, being a minority in a tough neighborhood in New York. However, his thirst for knowledge, status, and hard work has built a great amount of peer respect, economic output, and success.

jtdev• 6 years ago

This is true because a large portion of working people live in poverty in the U.S. This reflects poorly on our human-jackal employers that extract wealth from the labor of the poor (Walmart, Amazon... restaurant chains, etc.).

jungletime• 6 years ago

Having just tried to hire some trade persons. The going rate seems to be 1K-3K/per day in Canada.

1) 200 sqft laminate flooring in a square room. Quoted $1500 for installation. One day job.

2) 2 day job to install a minisplit system I bought separately. $6000+

My sister was quoted over 1k for replacing a valve by a plumber, for less than an hours work.

These were not even labour intensive or high skill dependent things. Just basic trade person type of things.

Your $10/hour job can buy you plastic things made in China at the dollar store.

So I think these are the real wages in this economy.

saagarjha• 6 years ago

That's probably going to the person who is managing it, I would assume? The actual people doing the unskilled work are likely making minimum wage.

decafninja• 6 years ago

Tradespeople can make a lot of money. I've started to do as much house repairs/installations as I can by myself after realizing it would cost hundreds of dollars for even very basic plumbing jobs.

phonon• 6 years ago

1. You also need to take into account non-wage compensation (e.g. healthcare).

2. This also provides a certain amount of "rough justice" for replacement of unreported wage income. While ordinarily that would not be an appropriate use of the UI system, these are not ordinary times.

3. Excess UI benefits will not last forever, while the effects to lower wage workers in food/hospitality and other industries will leave financial scarring for years. Giving people a little more upfront, then slowly phasing it out, gives laid off workers a reasonable opportunity to plan on a career change, if needed, or to reduce household expenses going forward. (E.g. finding a cheaper apartment).

droptablemain• 6 years ago

Maybe, just maybe, this is a good indication that their earnings were criminally low to begin with. Might have something to do with the relationship of exploitation between employers and employees.

UnpossibleJim• 6 years ago

Does no one think that these types of articles are a distraction while larger corporate entities get that majority of the bailout monies? Small businesses and the general public are fighting over the scraps of these bailout bills while the lion's share go to the larger corporations and to prop up the stock market (which, according to quite a few has been in need of a correction since Clinton - though economics is not my area and I defer to those who are more knowledgeable). It seems to me a bottoms up approach would work better to stem the tide of oncoming homelessness and broad housing/business market crashes that stem from failing systems, rather than putting our faith in "trickle down economics" during a pandemic where the only viable means of shopping is delivery, thus ridding the service sector which is a major vacuum in the whole "trickle down" web.

Admittedly, I could be wrong on several points and do look forward to correction. Please do point out my mistakes.

Many Americans are getting more money from unemployment than from their job

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