The coronavirus has thrown up a number of challenges for the restaurant industry, and now restaurant owners are talking about another one: unemployment benefits that pay employees more than they could earn working.
Christian Ochsendorf, a Minneapolis coffee shop owner who received a Paycheck Protection Program loan, told Politico that he has only been able to convince 40% of his furloughed employees to return.
“They get paid more on unemployment benefits than they would if they actually worked,” Ochsendorf said.
Workers in Ohio are seeing a similar boost through unemployment benefits.
“Hell, if they’re making more money sitting at home … I’m afraid some of them might not want to come back,” Ohio-based restaurant and bar co-owner Adam Rammel told Politico.
The modern Paycheck Protection Program waives miniature business loan payments if the borrower uses 75 percent of the money to maintain payroll, a move intended to reduce layoffs. But with expanded unemployment benefits included in the stimulus bill, some workers could even double their weekly checks if they remain unemployed. […]
The mismatch is particularly acute for restaurants, cafes and miniature shops — non-essential businesses where pay scales are typically low and that have been suspended indefinitely. […]
Unemployment benefit amounts vary by state, but in 2019, before the coronavirus crisis, the average weekly benefit nationwide was $370. The $600 supplement that the stimulus bill temporarily added to weekly unemployment benefits raises the average weekly benefit to $970, which is close to the average weekly wage nationwide and almost twice the average weekly wage in the food industry: about $500 nationwide for full-time workers.Political)
Several GOP lawmakers warned this would happen last month.
In a statement, Sens. Tim Scott, R-C., Lindsey Graham, R-C., and Ben Sasse, R-Neb., said the $2 trillion coronavirus relief bill could create “a powerful incentive for workers to take off work rather than go to work.”
“This isn’t an abstract, philosophical point — it’s an immediate, real-world problem,” they said. “If the federal government inadvertently encourages layoffs, we risk life-threatening shortages in sectors where doctors, nurses and pharmacists are trying to care for the sick, and farmers and grocery store workers and truck drivers and cooks are trying to put food on families’ tables.”
They added: “We must unfortunately oppose moving forward with this bill until that text is considered or until the Department of Labor issues regulatory guidance that ensures no American earns more not working than they do working.”
Their amendment aims to change this. lost.
Well, who would have thought? https://t.co/3vB0szJmrl
— Phil Kerpen (@kerpen) April 21, 2020
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