WASHINGTON: What a surprise it was to find three of four fast food restaurants closed at a busy service plaza on the Pennsylvania Turnpike. It was three p.m. four days before the July 4th holiday at the New Stanton plaza near Pittsburgh. Starbucks was closed as was Quiznos and Hershey’s ice cream. Only Burger King was open.
Initially I assumed the retail outlets hadn’t reopened from the pandemic and expressed that sentiment to an employee pushing a broom. “Not at all,” she said, “people are sitting at home making more on unemployment than working.” She said only 15 of the usual 60 employees at the plaza are turning up to work.
Then on July 6th returning from a brief stay in Michigan we stopped at the turnpike’s Oakmont Plum service plaza also near Pittsburgh. Amazingly, only the Seven Eleven and Burger King were open while Starbucks and Auntie Anne’s were shuttered. Like a week earlier I asked an employee why the shops were closed. His answer, “people won’t work because they’re making more from the government than from working.” He went on to say that before he returned to work during one month he received $4,000 a month in unemployment and emergency stimulus payments. Only nine of 45 employees at the plaza, he said, were actually working.
Doing the math it is apparent that over-generous support is a disincentive to work.
Let’s assume that a fast food worker is paid $15 per hour and works a 40-hour week. That’s $600 before tax. Pennsylvania allows the unemployed to receive 50% of their weekly wages for 26 weeks. That works out to a hypothetical $300 per week. But added to that is the extra federal benefit of $300 per week from President Biden’s American Rescue Plan that expires September 6th. In addition, our hypothetical fast food worker would have received at least $2,000 in government stimulus payments.
Adding it all up there is an incentive to stay home until after Labor Day.
Yes, 26 states recognizing the problem are scaling back additional unemployment benefits. Pennsylvania, where the unemployment rate is 6.9%, is not among them.
A constant from a week’s travel in Pennsylvania, Ohio and Michigan is a plethora of help wanted signs. Whether at Walmarts, restaurants, hotels or retail outlets businesses are not finding the help they require. #