Unemployment May Pay Better Than Idled Jobs

At $978, the average weekly check may discourage people from returning to work until late summer.

April 29, 2020

WASHINGTON—About half of all U.S. employees will earn more in unemployment benefits than working prior to the coronavirus pandemic shutdown, the Wall Street Journal reports. The coronavirus stimulus gives out-of-work people who file for unemployment an extra $600 weekly on top of state benefits, through July 31.

That adds up to about $978 weekly, sharply higher than the $377.97 average unemployment compensation in 2019, the U.S. Department of Labor said. Department data showed that 50% of full-time workers took home $957 or less per week during the first quarter of 2020. That extra stimulus money could mean lower-wage workers will not seek a return to work until after the July 31 deadline, which could hamper efforts to reopen businesses.

The $600 payment equates to working full time at $15 an hour. The U.S. government wanted the $600 weekly bonus to ensure the average U.S. employee had wage replacement in the months after massive shutdowns triggered by the pandemic. “The unemployment benefits are so generous that in many places workers are telling their bosses they’d rather be unemployed than return to their jobs,” said Sean Kennedy, executive vice president of public affairs at the National Restaurant Association. “It’s not that these workers are lazy, they’re just making the best economic decision for their families.”

Sheetz, based in Altoona, Pennsylvania, let workers older than age 65 and those with underlying health conditions take paid leave and any other worker take unpaid leave. If those employees qualify for unemployment benefits, many would receive more from the government than their jobs, as the top hourly rate is $15, CEO Joe Sheetz told the Journal.

However, Sheetz is not overly concerned that his team members are choosing to stay home. Some people who could have taken paid leave are still on the job, he said, in part because Sheetz stores are among the few still open in many rural communities. “The bigger issue will be trying to hire outsiders who are on unemployment,” when the company begins to add extra staff ahead of the summer. “Hard to compete with an extra $600 per week for hourly jobs,” he said.

Across the convenience retailing industry, the average salary of a c-store manager last year was $47,429, according to the NACS State of the Industry Compensation Report of 2019 Data. The average full-time associate wage was $11.75 an hour, the 2019 report indicates.