When unemployment benefits hurt small businesses

This story was originally covered by PRI’s The Takeaway. For more, listen to the audio above.

The most well-meaning economic policies can sometimes do economic harm. There are almost 400,000 unemployed people in the state of Michigan, and yet Anthony Fraccia, of Altruis Benefit Consulting, says he’s having trouble hiring. And he’s blaming part of the trouble on unemployment benefits.

Fraccia told PRI’s The Takeaway that he was looking for someone to start work part-time, and then eventually transition into full-time work. The job was in customer service, so he screened applicants over the phone. The job was supposed to pay $10 to $12 per hour.

According to Fraccia, one applicant asked, “Is that going to be cash under the table?” Fraccia told the person no. She then responded, “I could make almost that much money staying home on unemployment… So it doesn’t really justify me taking the job.”

“I was appalled by it,” Fraccia told The Takeaway. He then decided to take a step back from the process and wait on hiring anyone new.

When pundits wonder openly about why businesses aren’t hiring, Fraccia says, “it is a bit disheartening.” He told The Takeaway:

When the system is set up to encourage people to not look for jobs or not take work, if they’re financially benefited to stay on unemployment, because we’re the ones taking care of that.

“The Takeaway” is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what’s ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH. More at thetakeaway.org