From CAREing to FAIRing: A Permanent Wage Increase for Millions

A small portion of people in America are gaining more from unemployment than they would otherwise, which not only triggers strong reactions from those opposed to continued Federal Pandemic Unemployment Compensation (FPUC), but also presents a complex economics problem. Just over one out of three people are bringing in less from Unemployment Insurance (UI) than they did in weekly earnings from their last job.

The issue:

Workers are at risk for losing their increased benefits if they turn down what’s called 'suitable' work. The definition of 'suitable' varies by state, but generally requires a job to have wages comparable to the individual's last job and prevailing wages in the industry.

The solution in two parts:

1. Alter the current guidelines so that individuals lose UI only if they turn down offers with wages comparable to their current unemployment benefits.

2. Provide employers with a federal subsidy that covers the full difference between an unemployed worker’s former wage and their new one. This is what's meant by a "Fair Wage Guarantee."

The guarantee would operate by turning the recently increased UI benefits, which expire July 25, into a permanent wage increase for millions of people in America which theoretically allows employers to take on new workers at increased wages without directly incurring the additional cost.

The business credit and UI increase would begin to phase out once the overall unemployment rate returned to "normal" levels.

(Source, and further reading on a proposal to bring wages in line with expanded UI benefits: New York Times)