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Comment by PragmaticPulp | Hacker News Reader

> Your competition is working under the exact same rules you are.

In this case, that's not true. If your competition can pay people the median US income to stay home and do nothing and offer them a tax break on that free income, it's going to be difficult to convince them to come work 40hrs/week for you even if you offer them 10-50% more money.

The key is to look at the marginal increase in income. Unemployment (plus limited federal additional benefits) can pay out similarly to the median US income for doing zero work. Anyone looking at a job will subtract those zero-work payments from your salary offer and only consider the marginal rate. If someone can only go from $30K on unemployment benefits to $50K working for you, your job really only pays them $20K/year.

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People on unemployment aren't dumb: they know unemployment going to end, and that that this past check may be the last one they will see. As is the case with many government services, people who've never used it always assume it's much easier and laid back than it really is. In reality being on unemployment suuucks.

Anyone who is remotely employable will get a shitty job thrown at them and their unemployment benefits stopped. They literally say, "if you're offered a suitable job, then you must accept it." And what constitutes suitable, is pretty much any job, even if it pays less, is in a different field, and the commute is significantly longer.

Source: i've been on unemployment before.

> If someone can only go from $30K on unemployment benefits

People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening. It varies by state, but in my state, benefits are 50% of your wage (plus a bonus for dependents) up to a maximum of ~$700+$300 (fed bonus).

The thing is, that maximum is only available to a person making around $72,000 a year with three or more qualified dependents, and only for 39 weeks, and only if nobody offers the person a job. And a person earning $72k is pretty much guaranteed to get a job offer.

Source: used my state's unemployment estimator.

> People are not making $30k a year on unemployment. This is a total mischaracterization of what's happening.

The average, including the federal bonus, is currently around $32K/year equivalent.

You can get the statistics here: https://oui.doleta.gov/unemploy/claimssum.asp (Select US Total).

Comes to a little over $310/week average for recent months. Add $300 federal and you get $610/week, which is equivalent to $31.7K per year.

I'm not making up numbers. I'm just using the government-reported averages.

Your initial disbelief underscores why this conversation is so difficult: Most people don't realize that the current average unemployment payments have reached equivalence with US median incomes.

> and only for 39 weeks, and only if nobody offers the person a job.

The federal changes have extended the unemployment benefits well beyond the 39 week limit. Again, the current situation can't really be compared to traditional unemployment.

Also, being offered a job doesn't automatically end unemployment benefits because job offers aren't registered with the government. This only occurs if the UI beneficiary self-reports that they declined a suitable job, or if the company that offered them a job is suspicious and motivated enough to report the person to the unemployment office. The latter scenario would only occur if the employee admitted receiving unemployment and the hiring manager was motivated enough to seek revenge for declining the job offer. It can happen, but it's not like it's happening frequently.

> People on unemployment aren't dumb: they know unemployment going to end

Likewise, employers are not dumb. They know this extended unemployment is going to end and they're not interested in competing against it for the remaining few months that it will be active.

> The average, including the federal bonus, is currently around $32K/year equivalent.

Yeah, this is where you're messing up and completely mischaracterizing the situation. You're looking at weekly benefits and multiplying it by 52. The thing is:

* In my state, benefits are capped to 26 weeks, with a temporary 13 week extension.

* it's very difficult to continue receiving benefits.

* Those enhanced federal benefits are ending in September. Sooner in some states.

* Past weeks 8 or so, you are forced to take a job or stop receiving benefits. The only way out of this is to disabled or elderly, where requirements to be able to life 20lbs will disqualify you from employment.

There are tons of places out there, mostly factories and the like, which offer jobs to anyone whose been on unemployment long enough. The only way to avoid being forced to take these jobs is to be unable to meet the (modest) physical requirements.

Again, I've been on unemployment before. I remember this headache pretty well. Even with help from family getting my ducks in a row, I was booted off it after a week. Only very specific types of people really benefit from unemployment.

> Yeah, this is where you're messing up and completely mischaracterizing the situation. You're looking at weekly benefits and multiplying it by 52.

Okay, then take the US median income and divide by 52. Compare that against weekly benefits.

The conclusion is the same.

> * In my state, benefits are capped to 26 weeks, with a temporary 13 week extension.

Again, you can't compare traditional unemployment with the current situation. The federal benefits have extended this multiple times. Someone laid off in early 2020 could still be collecting benefits due to the multiple extensions.

> * Those enhanced federal benefits are ending in September. Sooner in some states.

Yes, at which point the argument becomes moot. The article is discussing why some states are choosing to end the benefits sooner.

> There are tons of places out there, mostly factories and the like, which offer jobs to anyone whose been on unemployment long enough. The only way to avoid being forced to take these jobs is to be unable to meet the (modest) physical requirements.

I don't know about your state, but most state unemployment systems rely on recipient self-reporting. There isn't a mechanism by which factories can simply offer random people jobs and then their benefits end unless they accept random factory jobs.

There are also specific exceptions for receiving job offers that are too far below previous salary, would be detrimental to career path, and so on. Programmers aren't being trapped into factory jobs via unemployment, for example.

> Even with help from family getting my ducks in a row, I was booted off it after a week.

You were booted off of unemployment after a week? That's an extreme outlier scenario. Perhaps your strange experience is skewing your perception?

The number of people receiving unemployment benefits right now is around 20 million. Clearly, people are not being booted off of unemployment after a week with any regularity.

Your state has extended benefits beyond 26 due to covid (all states have). I think you’re arguing the non-COVID status quo and GP is arguing current state.

Before COVID, you’re right. But during COVID (scheduled to end around Sep I think) GP is right.

Right now, in mine and most states, unemployment benefits started last April and continue through September and the annualized rate is pretty high.

The exact hourly rate varies state by state but is $300/week higher because of COVID, and extended benefit periods.

In my state unemployment caps out at $350/week if you would normally make $550. So, before COVID, if I made $550/week, I would get $350 in benefits. And if I made more I would still make $350.

So basically if I made $14/hour, approximately, employed and lost my job, I would only get about $9/hour.

With the COVID benefits I get $650/week or about $16/hour. And I don’t have to actively work. And the benefit period is longer than 26 weeks.

This is not conjecture, it’s facts and pretty easily visible.

So if I’m looking for work right now and getting $16/hour in unemployment (annualized to $32k) then it’s unlikely that I’ll ever take a job for $15. Or even $20, etc etc

When unemployment benefits drop, then the calculus changes.

There’s a game theory element where it may be better to stay on unemployment through September and then take a job vs taking a higher paying job now.

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