Congress Made Economic Crisis Worse By Incentivizing Unemployment Over Earning A Paycheck

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One Washington small business owner was shocked at the reaction of her laid off employees who were outraged at the news her spas were among the lucky few enterprises to capture a forgivable government loan under the Paycheck Protection Program (PPP).

“It was a firestorm of hatred about the situation,” Jamie Black-Lewis told CNBC. The loan secured would allow operations to stay afloat once allowed to reopen by the state governor, meaning her employees would still have jobs after the pandemic.

Their grievances? That they would no longer be able to collect benefits on unemployment. The provisions of the loan under the PPP require Black-Lewis to keep her employees on payroll. Her staff however, had calculated they would rake in more cash from government checks doing nothing than staying on staff doing nothing while the spas remain closed.

“I couldn’t believe it. On what planet am I competing with unemployment?” Black-Lewis said.

This story unfortunately, was of Congress’ doing.

With soaring unemployment numbers, Congress passed the Coronavirus Aid Relief, and Economic Security (CARES) Act beefing up unemployment benefits by $600 a week on top of whatever was already provided by the state.

A new report from the conservative Heritage Foundation published Wednesday however, shows Congress did more harm than good in ramping up unemployment benefits by providing greater incentives for citizens to collect government handouts than earning a paycheck.


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