There have been several instances where employees came out ahead being on unemployment as opposed to their employers continuing to keep them on payroll despite the shut down. That is where we are seeing the adverse effect in some situations. If a small business owner applied for the relief loans that are to be forgiven, one of the main requirements for it to be forgiven is that a large portion of that loan be used towards payroll. So the small business owner get's approved and can now afford to continue paying it's employees.

 

The problem is, that in the mean time several of the employees have already applied for and started receiving their state unemployment insurance of say $350(KY average payout is $358) plus the $600 the Federal supplement. That person, while be it for a short time is making $23.75 an hour on unemployment or their employer can go back to paying them $13.00 an hour, which is what the employer is supposed to be doing with the loan they received. It's easy to see why it's frustrating for both the employer and the employee in those situations.

There have been several instances where employees came out ahead being on unemployment as opposed to their employers continuing to keep them on payroll despite the shut down. That is where we are seeing the adverse effect in some situations. If a small business owner applied for the relief loans that are to be forgiven, one of the main requirements for it to be forgiven is that a large portion of that loan be used towards payroll. So the small business owner get's approved and can now afford to continue paying it's employees.

 

The problem is, that in the mean time several of the employees have already applied for and started receiving their state unemployment insurance of say $350(KY average payout is $358) plus the $600 the Federal supplement. That person, while be it for a short time is making $23.75 an hour on unemployment or their employer can go back to paying them $13.00 an hour, which is what the employer is supposed to be doing with the loan they received. It's easy to see why it's frustrating for both the employer and the employee in those situations.

 

Certainly not an ideal situation. I honestly think in an effort to get this rolled out quickly, the whole process wasn't given a lot of thought, and things were done to keep this as simple as possible.

Certainly not an ideal situation. I honestly think in an effort to get this rolled out quickly, the whole process wasn't given a lot of thought, and things were done to keep this as simple as possible.

 

Those are my thoughts as well. The weekly bonus for those on unemployment could easily be calcuculated and averaged to what said person made on average per week over the past 6 months.

 

But, that would be more work and also take more time. The fact that the IRS is running on reduced staff as well as most of the people that are getting said money needed it right away, makes me feel like rolling it out the way they did was likely the best option.

 

I'm generally not one that is all for handing out free money but this situation is different and I'm okay with it. I just hope that those that are receiving more than they normally make are putting that extra money in savings until they know whether their job is safe when this is over.

Certainly not an ideal situation. I honestly think in an effort to get this rolled out quickly, the whole process wasn't given a lot of thought, and things were done to keep this as simple as possible.

 

Those are my thoughts as well. The weekly bonus for those on unemployment could easily be calcuculated and averaged to what said person made on average per week over the past 6 months.

 

But, that would be more work and also take more time. The fact that the IRS is running on reduced staff as well as most of the people that are getting said money needed it right away, makes me feel like rolling it out the way they did was likely the best option.

 

I'm generally not one that is all for handing out free money but this situation is different and I'm okay with it. I just hope that those that are receiving more than they normally make are putting that extra money in savings until they know whether their job is safe when this is over.

 

Agreed, this is a perfect example of why it's hard to get things done sometimes. Takes a lot of vetting and scenario analysis to avoid those type of issues but getting it done quickly was perhaps more important than getting it close to perfect. Glad the help was there for the folks that needed it.

The reason they settled on the $600 per week is because the systems used by the government would only allow them to select one payment amount. They all realized this was an imperfect solution but it was the best they could do and get it done quickly.

The reason they settled on the $600 per week is because the systems used by the government would only allow them to select one payment amount. They all realized this was an imperfect solution but it was the best they could do and get it done quickly.

 

That could be changed as well, likely within a week or less. But again, it all goes back to timing. They needed to roll the money out asap with so many people living from paycheck to paycheck. In a sense it does seem like it could also be a social experiment as far as that goes.

 

Give away free money, see how ppl spend it. Unfortunately most that need the money will likely fail when it comes down to how they spend it and will end right back in the same position they were in to begin with

That could be changed as well, likely within a week or less. But again, it all goes back to timing. They needed to roll the money out asap with so many people living from paycheck to paycheck. In a sense it does seem like it could also be a social experiment as far as that goes.

 

Give away free money, see how ppl spend it. Unfortunately most that need the money will likely fail when it comes down to how they spend it and will end right back in the same position they were in to begin with

 

What could be changed?

So with unemployment + this $600 dollars a week are there people making more money by staying home?

 

They are making more money staying home than applying for the jobs that places like Kroger are offering.

 

Buddy applied and interviewed at Kroger. Told me they were offering like $11 an hour I think, I am not sure the position but probably just stocking shelves. He said he would make more with unemployment and the extra $600, plus he wont have to risk exposure.

That could be changed as well, likely within a week or less. But again, it all goes back to timing. They needed to roll the money out asap with so many people living from paycheck to paycheck. In a sense it does seem like it could also be a social experiment as far as that goes.

 

Give away free money, see how ppl spend it. Unfortunately most that need the money will likely fail when it comes down to how they spend it and will end right back in the same position they were in to begin with

 

Fail when spending the money? First the $600 gets the average person on UI up to their normal salary. For those that are basically getting a pay raise, it’s not like an extra $600 a week through July is life changing money that’s going to change their lot in life. It’s not even $10k total. Saying most will fail is assuming most are poor because of bad decisions and unnecessary spending over the years. That affects all tax brackets, not just the poor. In fact I’d say the poor are more likely to spend the money on real needs like food, rent and utilities, than those who are better off that are receiving it.