Scared Americans Refuse Return To Work And “Risk Losing Unemployment”

Remember when the Fed said now is not the time to worry about moral hazard? That kind of thinking leads down some uncertain paths.

Like the one we’re on now – where workers who have been living a now semi-lavish life provided by increased unemployment checks aren’t exactly feeling motivated to risk their lives going back to work.

And hey, we can’t blame them. Because given the choice to work and make less money or not work and make more money – well, the decision is obvious.

Now, with the “Phase I” of the country’s reopening, more and more workers are going to face this decision. In Georgia, for instance, “barbershops, gyms, nail salons and tattoo parlors will be able to open on Friday, with restaurants able to open for sit-down service on Monday,” according to Reuters. South Carolina is following suit with Texas and Tennessee close behind. 

But many workers are still scared to go back to work. Others are simply scared of losing their unemployment benefits. About 22 million people have filed for unemployment over the last 4 weeks.

People in states like Georgia and South Carolina could be worried about going back to work at a time when the virus hasn’t necessarily abated. 

Thomas Smith, an associate professor at Emory University’s Goizueta Business School said: “You’re asking people to put their life on the line. These people aren’t Army Rangers – those people signed up for combat. A barber did not.”

The state has processed more than 860,000 unemployment claims since mid-March, about 17% of the state’s total workforce. The state is paying out twice as many claims in a week than they did for all of 2019. Georgia has paid out more than $500 million in benefits so far. 

Georgia employment lawyer James Radford said: “I think that one of the big drivers of this decision by Kemp is to get people off unemployment rolls and having the private sector keeping these people afloat.”

But Kemp notes there is a new rule that allows people to keep collecting full benefits even if they earn up to $300 per week.

State Labor Commissioner Mark Butler has basically told employees and businesses they’re on their own: “If an employee is concerned about returning to work due to exposure to COVID-19, we are encouraging employees to communicate with their employers on plans to safely return to work.”

Manuel’s Tavern General Manager Steve Pitts said: “I have a daughter and I want to be around for her. It’s still too dangerous.”