Sunset Clauses

Here’s another example of their utility. To help out the furloughed and fired during the current Wuhan Virus situation, the Federal government enhanced existing unemployment insurance payouts with an extra $600 per week. The plus-up doesn’t expire until the end of July, more than three months hence.

Many businesses, especially the small and mom-and-pops that are at the heart of our employment environment, are starting to re-open as they figure out ways to operate at least partially or as State-level restrictions start to ease.


Employees say they’ll take the unemployment check for as long as they can make more money by not working. One internal Trump Administration analysis estimates that this work disincentive applies to millions of Americans.

That’s not laziness, as the Wall Street Journal‘s editorial correctly emphasizes. That’s workers making economically sound, rational decisions. Especially at the lower end of the economic scale, taking a functional pay cut to go back to work is…suboptimal.

Such a plussing up of unemployment payouts could have been made marginally acceptable—this particular jobless spike came about due to Government fiat rather than business decisions or economic cycles—had the addenda been accompanied with a hard milestone rather than an arbitrary date. A milestone like, oh say, an employer being ready to hire back and offering to do so, or a more blanket State-level easing of restrictions that would allow ranges of businesses to start re-expanding their operations or re-opening altogether—and so hiring or re-hiring.

It’s possible this oversight can be fixed in the next round of Wuhan Virus situation responses, but I’m not holding my breath.

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