The supplemental $600 a week will discontinue by July 31st.
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I wasnât looking down on anyone/anything. I was commenting on the availability of jobs in certain industries that have low education/skill requirements for employees.
I know the CARES funds wonât last forever, and assumed you knew the same.
Lower-wage jobs attract people with shorter-term needs and requirements, compared to people with 30-year mortgages, kids in private school, and a couple of $800 lease payments.
Itâs why services like this are becoming more popular: https://thetakeout.com/fast-food-workers-same-day-pay-apps-branch-instant-1834891419
Same population will pay $1 for 2 ounces of shampoo at a dollar store, instead of $8 for a liter at Target. They need shampoo NOW and the other $7 eats into this weekâs grocery money.
There are multiple issues being faced by small businesses due to this.
Businesses (like real street level small businesses) who got the PPP loans need employees to either come back or hire new employees to accept the jobs to be able to receive forgiveness & all this has to be done in 8 weeks of receiving the loan.
These business may be hiring at or around minimum job wages ranging around $9-11/hour.
This means that the supplement itself is more than the wages & thatâs why either the old or new employees donât want to come back to work.
Thatâs why the new guidelines are providing exception for âemployees who refuse to come backâ.
The unintended consequences is that small business which is trying to do the right thing by bringing itâs employees back is now canât operate at capacity & canât receive loan forgiveness which will hurt cash flow later.
Maybe not everyone but the ratio is high enough where itâs impacting negatively.
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The reason I took my stance in the first place is because Iâve seen no department of labor statistics or empirical data from verifiable sources supporting this claim. How negatively impacted is it and what are the numbers of people mooching until July?
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Surveys & Numbers are always after the fact data points. In this case the timeline is too small.
And again, How will you have someone say âyes I am refusing to work cuz I get extra $600 and not cuz I canât find workâ because that might make me lose the unemployment itself.
I know enough small business owners who have had their long-term employees and I even know few employees in several states who asked their bosses to fire them so they can collect the unemployment instead of taking a week or 2 of reduced hours while they figured it out to see that itâs impacting negatively.
If you think it wasnât having negative impact, you think the govt would have updated the âforgivenessâ criteria to exclude employees who are refusing to come back?
My neighbor is a doctor. He told us his employees are refusing to come back to work.
And honestly for all subprime auto loan portfolios that Iâve seen there are at least 5-10% of first pay defaults. Thatâs during good days. People buys cars and not even making first payment.
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Unfortunately people on the bottom of the pay scale shoot themselves in the foot often too. Bad credit and bad loans are rampant in the poor community. Some are due to lack of education, some are by choice. Itâs sad either way.
I have accounts with LendingClub and some hard money loan for flips, there are already some scary signs out there as I am seeing a lot of late payments. I basically stop investing on them with very rare exceptions.
I have family member who prefer to work under the table even though at their income they get everything back. No matter how I teach them, they wonât listen. Now they donât get the unemployment benefits. You can be poor, but you donât have to be stupid.
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For many, not going back to work is the rationale economic choice. To start, itâs not just 600 dollars. Itâs 600 dollars plus the stateâs normal unemployment payment, letâs say 400 bucks average. Thatâs the equivalent of $25 an hour. Even for a full-time worker at 12 bucks an hour thatâs a big deal. Nevermind someone working 20 hours a week making 10 bucks an hour. If you are struggling to feed your family there has to be significant long term upside to justify giving up 25%-75% of your short term income. Also, most of the jobs that are hiring are high cornovirus risk jobs like delivery people, supermarket worker etc⌠These jobs donât usually come with health insurance so if the workers get sick from coronavirus they are going bankrupt due to medical bills.
To justify the big short term income loss you need a large long-term difference in earnings. Itâs not clear that working at Instacart or Walmart provides that sort of long-term upside. However, foregoing an extra $500 a week in income may mean not fixing the car or paying your electric bill while potential exposure to coronavirus could be absolutely financially ruinous.
The only partial way around this given the constraints of the terrible antiquated unemployment systems was to index state CARES Act payments to a states minimum wage. Of course, you can see why that wasnât politically feasible in the Senate.
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My comment wasnât about the $600, it was just in general as my job involves looking at the subprime/poor markets. Also some of what I invest in shows the same trend.
As far as the unemployment bonus, I think for every person that helps, you could argue there are some that are screwed by it. I am not going to argue for or against it, itâs just what it is. If people are buying cars because of this $600, I say good luck to them as the money is going to stop flowing at some point. My mom is furloughed, I kept telling her to pay down all her bills and get in the best financial shape as possible. There is a real possibility that she will not have a job to go back to after. You have to prepare and be ready.
I donât think anyone was debating over the actual payment but just the effect itâs having from different POVs.
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some people will make out, some people will suffer regardless. you donât have to be a genius to figure out making a policy for 500 million people is not easy.
These guidelines are out? Some of my employees are not coming back. I wished them luck when they go back to finding a job once their benefits run out because theyâre going against people with degrees. (Most of my employees barely have a HS degree, hah)
Theyâve been updating them periodically.
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Yup.
Anyone furloughed should be concerned about getting called back as âmanyâ companies will eliminate 20% of their teams to become leaner.
As a manager where I work, we rated the team of 1,451 on their skills bank and seniority to make a call-back order.
Bear
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Yup.
Our attorneys shared this about 10 days ago.
In addition, those who refuse to be called back will be reported to our HR department for Unemployment Compensation cancelation.
Bear
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Seems reasonable to me
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In WI, the State controls the weekly $600 Trump money too, that spigot will also shut off.
Bear
I donât have that luxury.
I need every hand I can keep my hands on and in fact weâve kept new hires on board on admin pay so we have them ready to go to training as soon as we get the go-ahead.
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Many small businesses are doing the same. They cannot afford the increase in the unemployment insurance rates as a result of this.
Many small businesses are in the same position⌠theyâre being squeezed from both sidesâŚ
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