Caregivers stopped coming to work on Tuesday, April 7, at the Magnolia Rehabilitation and Nursing Center in Riverside. “Only one of 13 certified nursing assistants showed up to work,” according to FOX News. As a result, the 84 residents are being evacuated to different facilities. This was partly driven by the Covid-19 outbreak at Magnolia, where one third of the residents have tested positive as well as five staffers. But there’s a bigger reason for the workers to strike, and that’s because the federal government is paying them to quit.
If you think I’m joking or exaggerating for shock effect, you are mistaken. I am in shock, but the reality is the federal government has put in place a program called Pandemic Unemployment Assistance with the best of intentions that is going to wreak havoc on our society. The provision known as Federal Pandemic Unemployment Compensation (“FPUC”) will do far more than hurt the economy even though it is an economic incentive that is in play. When the men who collect trash at your curb stop coming by next week, when nurses stop coming into work, when groceries cannot open because the warehouse workers stayed home, then it will dawn on everyone how badly the Congress has screwed up. They have created a self-fulfilling depression and it’s going to cost lives.
Normally, workers cannot qualify for unemployment insurance unless they are laid off. The modified rules now allow anyone who quits their job to qualify for immediate payments from the government, fully paid by the government, that are larger than their paychecks. This includes part-time workers.
How to make this clearer? If a staffer at Magnolia earns $950 a week for working, they can stop showing up for work and get a $1,025 a week from the government. Let’s imagine that one staffer realizes that going to work puts his family at risk while also making less money to pay off debt, save, and stock up on groceries. How does she justify this to her spouse? As one SLATE story says, “Doctors, nurses, and other health care workers could potentially bring the virus back home, placing their families on the front lines of the pandemic too.” Congress has made one hell of a moral dilemma, but has given a clear approval that it is okay to quit and quit immediately.
The CARES Act was signed into law ten days ago on March 27th after passing both the House and Senate. When four Republican Senators objected that the FPUC provision could discourage workers from returning to work, they were mocked. Senator Chris Murphy (D-Conn.) tweeted: “Several Republican Senators are holding up the bipartisan Coronavirus emergency bill because they think the bill is too good for laid off Americans.” Murphy and 47 other Democratic Senators then voted down an amendment to address the anti-work incentive. Sadly, even the Republicans didn’t seem to realize the danger was larger than discouraging returning to work, rather that it would reward quitting jobs as well.
Maybe the families of Magnolia residents should send Senator Murphy a note that will explain that work disincentives can threaten lives. The damage is real, and it will keep getting worse until Congress passes a remedy.
The Big Unknown
The big unknown is how many workers will quit. Are we talking about two or three million? My assessment is that three-quarters of the American workforce could make more or equal take-home pay from quitting their jobs, but that does not include losing access to benefits such as company-provided health care, pensions, and so forth, as well as the psychological benefits of working. An important consideration is that the Pandemic UI program is timed to end abruptly in four months, and anybody who quits will face uncertainty over whether they can get an equivalent job in the aftermath. Nevertheless, with a total workforce of 164.6 million people, it is reasonable to expect that 82 million will seriously consider quitting in order to make 50 percent more money while sheltering in place. That’s good money, even if only for four months, and very good peace of mind. I doubt more than 40 million will do so. Is that reassuring?
What happens to a hospital when its lowest-paid staffers stop coming in? What happens to police departments when the support staff evaporates? What happens when packages don’t show up that you ordered online? What happens when garbage cans overflow on your street?
