Most states have lifted COVID-19-related restrictions and reopened their economies. But businesses are struggling to fully reopen because they cannot find workers. This is due in large part to federal changes to the unemployment program that discourage work.
Over the last year and a half, Congress has morphed the unemployment system into a new welfare program. They have methodically extended the amount of time someone can stay on unemployment, expanded program eligibility, and provided a weekly $300 bonus on top of state-paid benefits. To make matters worse, Congress initially suspended the work search requirement of the unemployment program, meaning individuals did not have to look for work to receive benefits.
Now, staying home is more lucrative than returning to work. An individual could earn more than $44,000 per year after state-paid unemployment, the federal bonus, and other welfare benefits. This means that employers are now having to compete with unemployment benefits— rather than other businesses—for workers.