At the time that I’m recording this episode, families across the United States are losing the extended benefits that they qualified for during the Spring when COVID first hit. Right now families are also waiting anxiously as Congress debates the next financial package to address the Coronavirus Pandemic and to hopefully manage the damage that it has done to the economy. What’s really begun to piss me off is the way that people are talking about the additional $600 benefit that people have received during this time. Grab a drink and sit down because I’m about to share some thoughts and it’s long overdue that someone says something about that extra $600 dollars. I will use Colorado for my examples and share when data comes from a different source.
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Show Notes
When Congress shared the benefits that people would receive from the CARES act, that information was received with a huge sigh of relief by families directly and indirectly affected by the pandemic. With restaurants closed, events shut down, event venues shuttered, millions of people lost their jobs permanently. Then, the waiting game began between understanding the reality of the moment that we’re in and the reality that this thing would be around a hell of a lot longer than we ever anticipated. I started hearing the following from other people about that extra $600 a week.
- We’re paying people more to stay home than to work. Basically, they are earning more on unemployment.
- People are taking advantage of the system.
- People are being deterred from wanting to work.
- Employees are being deterred from returning to the work that they did before.
Here are some of the things that I have been wanting to say to people for awhile.
- The American citizens receiving unemployment benefits have payed into the system. Taxes, you’ve heard of them right?
- For many people, especially people of color working jobs with the public, they are very aware of the risk to their health if they return to the job.
- The majority of people want to work, it’s where many people connect with community, have purpose as related to their skills, and quite honestly, get their health benefits if offered by their employer.
And, quite frankly, your work opportunity may not be the opportunity that people want to return to. Let me say that one more time. The job that they were working before may not be the job that they would like to work with moving forward.
Unemployment Is NOT Easy
I’ve never used unemployment. But, it’s not rocket science to know that being unemployed is hard work. Since the Reagan years, Americans seeking unemployment benefits have been subjected to unspoken bias and eligibility tests that make requesting those benefits-that they paid into a system for really a pain in the ass. Let’s talk about what it’s like to use unemployment benefits:
- You have to work your way through antiquated online systems to make the initial request
- Then, you have to wait for the request to be approved or denied
- Once that happens, depending on your state, you may have to take drug tests or jump through some other hoop to prove that you’re eligible outside having PAID into the system during your working years.
- If you’re lucky enough to qualify for food benefits there may be limits on what you’re allowed to purchase. Given that this country has full on debates about fast food chicken and Chipotle, this amuses me.
- Hopefully, you live in a state that has a decent automatic deposit system for your benefits.
- In Colorado, you have to request your benefits every two weeks.
- Your benefits may be delayed for whatever reason-to be reviewed, computer glitches, etc.
- Recipients must be actively looking for work and must report any job offers received. If they receive job offers basically they have to accept them.
Does this sound fun to you? This sounds like it basically sucks and takes away a lot of the recipients autonomy.
Here’s the Deal
- Being unemployed sucks.
- Just because people worked for you for low wages doesn’t mean that they want to return to that. Would you? Wouldn’t you want something better? The opportunity that you’re offering may not be the opportunity that people want. Surprisingly, most people have bigger dreams than you may realize or are reflected by the life that you see them living.
- Other people feel empowered to talk down to you about your finances and financial choices.
- That extra $600 a week has allowed American citizens to:
- Catch up financially in many cases.
- Pay off debt.
- Have some financial security-by creating a savings.
- Experience the same time freedom that many White Collar employees experienced via their jobs. I know of numerous people who were paid by their employers to stay home for months. They stayed home because of the actual physical risk of being around other people. Because we’re dealing with a pandemic.
- But, what really bothers me is that the extra $600 a week equals $2400 a month or just around $1680 after taxes. In a moment when we could be uplifting people and empowering US citizens to have better lives we’re nickel and diming them and it’s pathetic. Especially when you look at the financial response in other countries.
- Canada $2,000 a month
- Germany has increased certain aspects to access to the COVID benefit through December 2020
- Spain has introduced a Minimum Vital Income
Here’s the Truth
- A large percentage of restaurants, event venues, tourism locals will close permanently. I’ve already begun to see this happen in my town and state. In fact, I heard of another favorite restaurant closing this week. Those jobs are gone.
- Even if every unemployed person shifts to working the available jobs-there will still be large numbers of people out of work.
- No one is addressing the skills gap, training, and positions currently available.
- The pandemic has accelerated a work and productivity trend that I’ve talked about over the years on this blog and on my podcast-technology will continue to displace workers and now the rate will be accelerated because businesses now see what they can do with fewer workers, smaller or no business space, etc.
- American business is heavily invested in keeping wages and benefits low and profits high. Why? Because it benefits BUSINESSES
- American citizens must now understand that they must always think about their needs first as no one else will.
Who are YOU to question what other people do with the money that they receive when approved for their benefits? That they paid into a system in order to participate in.
No one is getting rich on unemployment. Here are some numbers to consider about what many people’s finances looked like prior to the pandemic.
- Colorado’s minimum wage is $12 an hour.
- That is $24, 960 a year before taxes or less than $20,000 a year after taxes.
- That’s $2,080 a month.
- Denver’s average rent is $1663
- Colorado Spring’s average rent is $1201
- Boulder’s average rent is $1963
- Zillow is showing Colorado average rent as $2,000 a month for 1285 sqf units/
Why Do I Care?
Because a lot of families are about to be hit with a financial tsunami. It’s not right to treat people this way. We’re in the crosshairs of a once in 100 year situation and the irony that a bunch of wealthy people who’ve likely never needed to use this benefit are the ones negotiating it with a serious lack of urgency has not been lost on me.
What do you think about that extra $600
On Monday I’m going to talk about the logic of money vs. the emotion of money. I feel like this is one of those moments where this needs to be brought up.
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