If only someone could have seen this coming… oh, wait! They did.
But let’s back up a bit and dig into the story.
Jamie Black-Lewis is a spa owner in Washington state who has had to close down her two spas and halt payment for her 35 employees as well as herself due to the coronavirus lockdown.
She applied for a loan through the federal Payment Protection Program and was relieved that she could make payroll while the lockdown progresses.
Black-Lewis saw the $177,000 and $43,800 loans, one for each of the spas she owns in Washington state, as a lifeline she could use for payroll and other business expenses.
She’d halted pay for the 35 employees — including herself — at Oasis Medspa & Salon, in Woodinville, and Amai Day Spa, in Bothell, in mid-March, when nonessential businesses in Washington closed due to the coronavirus pandemic.
Under the CARES Act, the loans are backed by the federal government and implemented through banks. These loans are forgivable under certain circumstances including that the bulk of the funding goes toward payroll, salaries remain intact, and the number of employees does not decrease. Businesses have until June 30 to rehire laid-off or furloughed employees to qualify for loan forgiveness.
Black-Lewis was thrilled that she could keep her businesses going and pay her employees and not go into more personal debt to do it. It was a real win… or so she thought.
When she convened a virtual meeting to tell her employees the good news, she said she was met with “a firestorm of hatred about the situation.”
Why were her employees so upset?
The unintended consequence of the $2.2 trillion coronavirus relief was a flat $600/week bonus to unemployment benefits across the country.
Washington state is very generous with its unemployment benefits and for low-wage workers it is financially advantageous to take the unemployment.
The CNBC article compares three states and discusses the “breakeven” point where a worker would make more from working rather than collecting the unemployment benefits. In Mississippi, it’s fairly low–a full-time employee making less than $21/hr ($43,680/yr) would make more on unemployment. In California, it’s around $26/hr or about $54,000/yr. Washington state has very generous unemployment benefits, so the “breakeven” jumps all the way up to $30/hr or $62,000/yr.
Black-Lewis employs massage therapists, hair stylists, and aestheticians, and their salary ranges from minimum wage ($13.50 an hour in Washington) up to about $60 per hour. Many of her employees work between 24 and 32 hours a week.
She simply cannot compete with the unemployment “raise” from the coronavirus recovery package.
The anger came from employees who’d determined they’d make more money by collecting unemployment benefits than their normal paychecks.
“It’s a windfall they see coming,” Black-Lewis said of unemployment. “In their mind, I took it away.”
“I couldn’t believe it,” she added. “On what planet am I competing with unemployment?”
Black-Lewis is surely not the only entrepreneur to struggle with such dynamics.
Here’s the big reveal on who saw this coming a mile away…
Senators Lindsey Graham(R-SC), Ben Sasse(R-NE), Rick Scott(R-FL), and Tim Scott(R-SC) were all mocked by the left for saying that the coronavirus emergency package was too generous and would incentivize people to take the unemployment “raise” rather than keep their jobs.
It looks like that handful of GOP senators were correct.
For Black-Lewis, it means that her employees are angry that she was “greedy” wanting to take the loan to keep her business going rather than let them suck off the government teat to line their own pockets.
It wasn’t just those on the lower end of the pay scale who were upset — even ones who would stand to make more money from their regular paychecks sided with lower earners, Black-Lewis said.
“They were pissed I’d take this opportunity away from them to make more for my own selfish greed to pay rent,” she said
She said that not all of her employees were upset, some came around to see that keeping the business open is better in the long-run as the “Federal Free Cash Unemployment Bonus” only extends until the end of July.
“They [may not have] the choice ultimately, but I don’t come out as the nice guy,” Black-Lewis said. “Bad will has been cemented into the business because I took it away from them.”
“There’s a bad taste from it,” she added. “We’ll recover. But it’s just a bummer.”
Imagine what going back to work will be like for Jamie Black-Lewis and her employees that are upset that she cost them money by keeping them employed. It’s going to be pretty tense.
Self-awareness doesn’t seem to be a strong suit of her employees that called her “greedy” while ignoring thier own greed. They seemed to be quite happy to let her businesses die just so that they could collect a bigger paycheck for a few months paid for on the taxpayer’s dime.
Yo, geniuses, you are also taxpayers and you are being greedy.
With all the talk about “we’re all in this together” regarding the ‘Rona, we’re not seeing the same thing when it comes to keeping small businesses open.
Democrats have held up funding small businesses to push their agendas and employees would rather take government benefits.
Let’s be clear, small businesses are an anchor of the U.S. economy and if they go under, it hurts all of us.
It’s already going to be hard for businesses like spas, restaurants, and others that necessitate close proximity to reopen with people growing accustomed to social distancing and everyone turning into a germophobe.
Let’s not kill off businesses when we can resuscitate them.