…and leave Unemployment Insurance behind.
Sometimes our elected officials create policies with good intentions, but end up with unintended consequences. The newest stimulus package (which includes supplemental unemployment insurance (UI) through September of this year) may be an example of this. While it was intended to help those individuals currently out of work due to COVID layoffs meet their financial obligations, in many cases it’s caused a disincentive to go back to work.
The new problem created is that many employers are now desperate to hire help as they reopen and expand. This is leading employers to offer higher pay and perks to entice workers back.
When evaluating your return to work, here are some key points to consider:
1. Those who work are giving themselves a considerable advantage over their peers – gaining training, experience, seniority, setting themselves up for promotions/pay raises, and more. Imaging running a race with a substantial head start.
2. UI won’t last forever, and by getting a jump on the job market now, you will face less competition for jobs. This increases your chances of landing work. Keep in mind that when it ends, EVERYONE will be looking for work.
3. Better wages. Many employers are currently increasing their pay to lure people back to work. These wage increases and sign-on bonuses will likely NOT remain in place this fall when more people seek work (supply vs. demand).
4. Future retirement. Since UI is not considered wages when calculating Social Security benefits, this can adversely affect your future benefits. Also, while not working you are sacrificing any 401k retirement contributions and employer matching.
5. Employment gap. Employers may question your work ethic when they see the employment gap, knowing that jobs in certain fields were readily available. Those currently working will likely have an advantage when being considered for future jobs.
COVID-19 has been a challenge for everyone, especially those with their own (or a family members) compromised health, or a parent trying to manage school-aged children. Everyone has to weigh the future consequences of not immediately returning to the workforce on an individual basis. For the vast majority, however, the signs point to rejoining the workforce and leaving unemployment behind.