The news show that I watched on Fox yesterday had a brief discussion regarding unemployment, one of the panelists said that there are jobs out there, the problem is that the people don’t want those jobs and that got me to thinking.
The Department of Labor lists the Federal minimum wage at $7.25, if you multiply the hourly wage by 40 (the average number of hours in a work week) you get a weekly salary of $290.00. While the Federal minimum wage is $7.25, each state can mandate what their minimum wage is. Again using the Department of Labor website I found that 14 states have a minimum wage higher than the federal government; 5 states are lower than the federal minimum wage, 26 have the same minimum wage as the feds and 5 states have no minimum wage. I did not include Puerto Rico, Guam, the Virgin Islands or American Samoa.
Since I live in CT, I decided to use CT as my example; in CT the state minimum wage is $8.25 which means a 40 hour a week job would gross $330.00, the maximum unemployment benefit available in CT is $555 per week. So my question here is why would someone give up $555 per week for a $330.00 a week job that would probably net them roughly $250.00 per week? Nevermind factoring the gas you would use to get to and from work, wear and tear on your car etc.
Now Florida is a bit different, their minimum wage is $7.25 but the maximum unemployment benefit they can receive weekly is $275.00; still when you do the math and take out your deductions for income tax, FICA etc…you are looking at a net of about $200.00. So again, why would someone give up an unemployment benefit to take a job that they might not necessarily like for less money.
See the flaw in the plan? States need to find a way to make it less expensive for the business owners so they can make a profit but still pay higher wages and once higher wages are being offered people will be willing to give up their unemployment.