One of small businesses’ biggest issues today is that people are being paid more to stay home than return to work. Since the pandemic hit, federal policymakers have pushed through a vast array of welfare benefit boosts, unemployment bonuses, and tax credit increases, while suspending many traditional requirements for eligibility. This includes a $300 unemployment bonus and extending unemployment eligibility to more than a year, relaxed eligibility rules for welfare programs like food stamps and Medicaid, an unprecedented new child tax credit scheme, and more. As a result, many unemployed individuals find themselves in a position where they can collect more in unemployment and other welfare benefits than they could earn working.
If this were not bad enough, individuals can now spend more than a year on unemployment with no expectations of rejoining the labor force any time soon. In 2020, Congress created a new federal program extending unemployment benefits after individuals exhaust their regular state unemployment benefits. That program was expanded to 53 weeks—more than a year—in March 2021.
In some states, individuals may also qualify for additional extended benefits. Once all other unemployment benefits have been exhausted, the Pandemic Unemployment Assistance program kicks in to extend benefits even further. All told, individuals can collect unemployment benefits through these programs for between 79 and 86 weeks, depending on the state. That is a year and a half of unemployment.