Maximizing Resentment Through the CARES Act

I can't stop thinking about the federal legislative response to the pandemic. It's almost tailor-made to build up as much resentment and antagonism as possible.

Consider the Pandemic Unemployment Assistance from the CARES act. It adds a flat $600 per week from the feds, so long as a person claims at least $1 in state unemployment. Generally speaking, state unemployment insurance pays about 50% of what you used to earn (usually there's an upper statutory limit). So going by the 50% figure, this means that anyone that made less than $62k a year is now better off unemployed. I think on its own, this isn't too bad because it provides a financial incentive to not work in addition to providing compensation for a state-initiated shutdown.

But the problem is that unless you had funds specifically earmarked by the CARES act, corporate entities hit by the pandemic have no backup plan and will be financially hosed. Supposedly this is the intent behind the Payment Protection Plan, where the feds will give you a loan for up to 2.5 months worth of your payroll. This loan will be forgiven completely so long as you devote at least 75% of it towards payroll. This also, on its own, has a good design behind it. The idea is that you want people to remain "employed" even if technically there is no work to do because otherwise the pandemic recovery would be severely hampered by companies having to try and find their previous employees to rehire.

Do you see the problem when you combine it? You suddenly have large swathes of the population earning in some instances significantly more when they are unemployed. You are also directly encouraging business to NOT layoff their employees. On top of that, some menial and common jobs like grocery store clerk have suddenly become riskier and more stressful. If anyone quits voluntarily or gets fired for cause, they no longer qualify for unemployment insurance.

So you have this fucked up situation where workers have a financial incentive to be laid off, businesses have a financial incentive to not lay people off, and the workers who are stuck working are figuratively being punished financially for working.

Once I realized the mechanics of this I couldn't stop thinking about it. I now genuinely feel sick to my stomach when I see those "lucky" enough to remain employed because their colleagues who were let go are at home getting double their previous income. I can't imagine that this was all intentional, but holy fuck it should have been obvious to anyone drafting the bill what a perverse set of incentives they cooked up.