Employers are consistently citing challenges with filling positions where unemployment benefits are greater than the pay rates employers are offering. Economists have estimated as many as two thirds of people collecting unemployment earn more than they did at their old jobs.*
Joe Rindfuss of WNY Jobs recently wrote:
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.**
However, these challenges have brought about opportunity for job seekers. Because of the lopsided supply and demand for workers, employers are starting to offer better wages and perks to entice workers back. Local manufacturers are offering sign on bonuses in the thousands to secure production employees, while others are advertising unprecedented starting pay rates. By our estimates however, this too shall pass. As supply and demand for workers levels out the likelihood of seeing higher than normal wages and sign-on bonuses will decrease. If you’re still contemplating leaving UI benefits behind to reenter the workforce….as the saying goes, ‘strike while the iron is hot’.
Some other key points to consider according to WNY Jobs:
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.
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.
While there are a number of X factors each individual has to consider to return to work ( medical status, lack of childcare etc.), if you’re a jobseeker holding out to the last minute….don’t. Now is the perfect time to get ahead of the pack.