Written by Nicholas Vetrisek
The coronavirus pandemic and subsequent lockdowns have caused the unemployment rate in San Diego to soar to record highs. Normally, this would be a bad thing for many people. No job, of course, means no money. But thanks to the federal government, there is now no incentive to get back to work.
Since the CARES Act was passed, unemployed Americans now receive an extra $600 per week. As a result, what was formerly a bare minimum amount of funds to help people get back on their feet is now a generous pension from the government in which many recipients can make more money than when they were working. Now, it pays to be a neet.
Federal money combined with state unemployment has made a rather attractive package for those that aren’t particularly in a hurry to return to work.
This is going to make it even harder for businesses to reopen because many of their employees will be earning less working than they receive in unemployment benefits. The federal funds are only supposed to last until the end of July, but that still means two more difficult months for businesses. If Democratic legislators get their way, the federal unemployment benefits will last until the end of the year.
There is little doubt that many people will happily take advantage of the government’s “generosity” and rely on the extended benefits for as long as possible. This is not necessarily because they are selfish or greedy, as perverse incentives reliably produce perverse decisions.
While most Americans are eager to get back to work and return to their normal lives, allowing those who can work but instead choose to live on the taxpayer dime is deeply unjust and unaffordable. As former British Prime Minister Margaret Thatcher famously said, “the trouble with socialism is that eventually you run out of other people’s money.”
