Consider an employee working 35 hours per week at $14 per hour, or $490 per week.
Typical UI benefits in Illinois would pay out 47 percent of that ($230). Now, under the stimulus package, the same employee is going to make $830 per week on unemployment—an increase of 70 percent of what they were making working full-time. Also worth remembering, this benefit extends to part-time employees as well now.
So, in the case of this restaurant brand, someone working half those hours, normally making $245 per week and able to make $115 on unemployment, is now bringing in $715—just about triple what they had been earning.
In four months, that employee is going to bank their normal annual salary.
Where this is really going to show up for restaurants is in areas of the country with low minimum wages. This dynamic came up over the relief bill’s final few days. Senator Lindsey Graham and three other GOP senators, Rick Scott of Florida, Tim Scott of South Carolina, and Nebraska’s Ben Sassee, called for an amendment that would cap benefits for the jobless at 100 percent of a worker’s pay before they were out of a job. Graham contended the bill would pay unemployed people roughly $24 per hour, “more not to work than if you were working,” he said, as reported by ABC News.
It was determined, however, not at fault enough to be scrapped or to put limits on it. Treasury Secretary Steven T. Mnuchin said most people would elect to stay employed, and the provision was necessary to streamline and quicken the process of delivering aid to workers laid off by COVID-19’s effect on businesses.
