With the Coronavirus wreaking havoc on our lives and economies, the U.S.A. issued an extra $600/week to be paid to those who are approved to receive unemployment payments. This is to help maintain a decent standard of living to those laid-off due to mandatory business closures and also to somewhat maintain an economy since thousands of people are forced to lose their income. Without the extra unemployment money, the country would very likely be an even bigger disaster of people not being able to afford their bills.
If you received the extra $600 unemployment benefit, did you make more than you would have working? That is a concern to many people that think we're giving too much money away and driving up the national debt. It's unfair for those that are making more money sitting at home doing nothing than those still out working! If you did make more than you were before while working, what did you do with the extra income? What did you spend it on?
I'll start with my story. My wife worked at a spa as an esthetician. Since it was forced to shut down by government mandate, she qualified for unemployment and the extra $600/week. Even when she was working full-time, the job only paid minimum wage plus a little tip money received from clients. Her location didn't get very many clients and there were too many other estheticians on staff she had to share the clients with, so she probably only averaged maybe $12/hr. Yes, she was making more on the unemployment than she would have otherwise.
This was lucky for us because I was still allowed to work to keep my income and now that she was making more we could finally afford our bills and pay off debts. Just a month before all the shut downs, we were on the brink of bankruptcy and moving in with my parents. I got a new job at the end of 2018 and was supposed to be getting good raises over the next year. That wasn't a written guarantee, but my friend reassured me several times that this would be very likely as that was his experience. Unfortunately the company plateaued and started to decline soon after I started and those raises never came. We foolishly overspent on upgrading our home furnishings and other things that got us into debt, planning on the higher income to offset the costs. They were basically all on payment plans with very little or no interest that we could cover for a few months from savings and then the raise would take care of the rest. When the new raises never came on the dates they were supposed to, we got in trouble. I couldn't ask for the money because the company didn't have it. I started looking for a new, better-paying job, but ran out of time because I was eventually laid off due to the lack of work.
Since my wife's income more doubled with the extra unemployment benefits and I picked up a second night job right before the pandemic closures, we were able to get back on track and breathe again. We used all the extra income to pay off a few thousand dollars of debt we accumulated the previous year. Capital One started getting a lot of money back from us, but they probably lost more on other people who lost their incomes and were defaulting on payments. More important bills usually come before credit card payments.
I was able to keep working until the beginning of July when I was laid off, but now my wife's unemployment was running out unless they extend it. I just got on it, but the extra $600 expired two weeks later and wasn't replaced until much later, and it was less. By the time Congress and the state government figured things out we didn't even qualify for unemployment anymore. Not that that was a bad thing, but it was a lot of money we missed out on when we needed it.
Since we paid off a lot of debt we were able to get caught up and could barely manage ourselves with the combination of my second - now only job since I was laid off, my reduced unemployment benefits since the extra $600 expired, and my wife's lousy income. She started working again, but with reduced hours because there just wasn't very many clients and we also needed someone to stay home with our new baby at night as we both work evenings and have to schedule around that.
Now back to the people complaining that the $600 was too high. I used to think that way too, but it saved our lives. Yes, maybe our own mistakes and misfortunes shouldn't be paid for by the government, but then why do all the big corporations get their mistakes paid for? Because they need it to keep an economy going? Sure, but what good will that be when millions of people can't afford any of the products and services big companies offer because their meager allowances don't even cover food and shelter? Why not give the billions in bailouts directly to the people to keep buying the products and services they prefer?
People complain that the unemployment benefits dissuade people from working. First point, in case you forgot, MANY OR MOST BUSINESSES ARE EITHER CLOSED OR REDUCED STAFF SO THERE ISN'T MUCH LEFT TO APPLY TO TO WORK AT ALL! Second point: For the jobs that ARE still available Yeah! Nobody wants to work low-paying, dead-end, crappy jobs. Good career jobs sometimes take time getting a new one, especially if you're early on in a career without much experience, or discriminated against because you're old. The job market is fiercely competitive even without the pandemic shutdowns.
Families can and should live within their means, but still be screwed in two to three months or less if their income is severed in half until (and if) they get a new job that pays similar to what they had. Complaining that the extra $600 was too high to me means you insist that people should work meager jobs, lose much of what they have, and live in poverty because the pandemic forced them out of work. People also forget that the unemployment checks run out! It might dissuade people from going out and getting a new crappy job to work at, but the unemployment checks don't last forever! You better get a new job before it ends or you're even more screwed!
I graduated from college in 2016 and have already been laid off twice because both of the companies I was working at lost business and downsized. Unemployment benefits saved my family both times and I am very grateful to have had that. Besides being unemployed and having little to no income, the biggest thing that bothered me when I was unemployed was when people would give me bad advice and unhelpful suggestions. When I respectfully declined their bad suggestions and explain my reasons, I often still came out sounding like I was being lazy or too picky.
The bad advise and unhelpful suggestions were just quick fixes that led nowhere, stuff I was already doing, or things that just weren't practical. For example, I was frequently informed of all kinds of random jobs and places that were hiring like warehouses, grocery stores, retail outlets, substitute teaching, fast food, and other restaurants, but I wasn't looking for just a job - especially another low paying, dead end job. I needed a career. So many people don't understand what's it's like to look for work in today's job market. Every job posting has hundreds of applicants within a few hours. Some websites actually show you how many applicants applied. I'm not making it up. I've seen it.
I was told that my grandmother wanted to suggest using the old-school Help Wanted/Classifieds section of a newspaper, but my parents told her that's a really outdated method. Several people suggested a few work places to start and just work my way up in the company over the years, but most of the jobs they suggested don't really do that. I've been told to other weird things like applying to a law firm even though they aren't hiring, but because grandpa in-law knew an old guy that used to work at the firm 15 years ago, so they might hire me because I have a "business" degree, so I can manage their law firm business for them; or I should apply to a a job requiring a mechanical engineering degree even though I am not a mechanical engineer, but I can prove I'm a hard worker. No. It doesn't work like that anymore and no thanks, I can find all the low level jobs easy if that's what I want, but it's not. Some think $15-$18 an hour is good pay, but not if doesn't have growth potential and you're going into your 30s with a child or children at home, you have a good college degree, and want a better career you're qualified for. Many people I knew with similar degrees got starting jobs at $25/hr. THAT's what I was looking for! I went to college to get away from the dead-end jobs where you have to fight for nepotistic favors and management politics to get promoted. There is little to no actual meritocracy these days.
My brother doesn't understand the difficulty of getting jobs and must think my wife and I are complete idiots for not doing better. He showed me some government jobs that pay really well for fairly easy work and assumes it's as easy as just filling out an application and you're in, but he hasn't applied to a job since he was a teenager. I actually have applied to government jobs before. It can be a clunky mess of an application process sometimes and, again, you're competing with several hundred people that are also ALWAYS applying. Those better-paying jobs usually hire from within, even though the job posting doesn't expressly state it. They typically hire someone that has put in the years of work at little pay in a similar role. They're not just going to take some random person that can probably do the job.
Thankfully, and luckily, I have a new job again and it's the best I've ever had. I can't believe how lucky I am to finally get where I wanted to be. Now I can give more to those that weren't as fortunate. Please donate to Invested Alternative so we can help those that have been struggling with unemployment and underemployment. Please put your stories in the comments or in an email to email@example.com. What was your experience in unemployment? Was the extra $600 too much or maybe not enough? Did you make more on unemployment than you did when working? Tell me about it and I'd like to do a follow up post to share your stories.
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