NFIB member Les Neilly, owner of Neilly Canvas Goods in Pittsburgh, testified before the United States Senate Finance Committee about the challenges his small business is facing as a result of the additional $600 per week pandemic unemployment compensation enacted as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Neilly notes that, “I know I am not alone as countless other small business owners have had similar experiences.”
Neilly’s business manufactures tarps for trucks and awnings. It was considered essential under Pennsylvania Governor Tom Wolf’s shutdown of non-essential businesses; however, not enough orders from their customers meant that Neilly was faced with having to lay off all of his workers.
As business orders began to come back in gradually, Neilly’s employees (who make between $14.00 and $21.25) were called back in over a period of several weeks.
“Some employees were called back but were frustrated because those still on unemployment made more than they did due to the extra 600 dollars a week, and they didn’t have to get up to go to work,” said Les Neilly. “The higher unemployment compensation created resentment and was very disruptive just as we were trying to come back from such economic hardship and keep the business going.”
The additional unemployment benefits intended to help small businesses were hurting Neilly’s. His employees made more off the job than they would while working.
Neilly stressed that, “Congress should not pay people more on unemployment than they make in a 40-hour workweek. I am also concerned that small businesses may be saddled with high unemployment taxes due to the surge in unemployment when we can least afford it.”
NFIB opposes the extension of the additional $600 pandemic unemployment insurance.
Courtney Titus Brooks, NFIB’s Federal Government Relations Manager, also notes that, “Unfortunately, the CARES Act has created a perverse incentive for workers to continue collecting unemployment insurance if they can be paid more not to work. Small business owners should not be put in a position where they have to compete with unemployment insurance to reopen their doors.”
This expanded unemployment benefit is scheduled to expire at the end of July. However, Congress may consider another COVID-19 response package before then.