The Unintended Consequences of Generous Unemployment Benefits

The Unintended Consequences of Generous Unemployment Benefits


 The unintended consequences of generous unemployment benefits 


By David Bass



This year has seen some of the most generous unemployment benefit checks since the Great Recession in 2007-2009—and with good reason. As the economic fallout from the COVID-19 pandemic has put 20 million Americans out of work, and over half-a-million right here in Georgia, the need for robust help is pressing. 

Currently, the maximum weekly unemployment benefit available in Georgia is $665, a combination of $365 in state compensation and $300 in federal dollars (due to a recent executive order from President Trump). Earlier this year, the total package was even more generous at $965 due to $600 in federal unemployment checks (a benefit amount that expired on July 31).

This means that an unemployed individual could qualify for the equivalent of a $16.63 per-hour job right now. Not every worker will qualify for this maximum amount because unemployment insurance payments are based on recent earnings over a 52-week period. According to U.S. Department of Labor data, Georgia’s average unemployment is closer to $225 a week, for a combined value of $525 per week when mixed with federal dollars.

What’s more, the federal $300 per-week payments are only guaranteed for three weeks, although it is likely unemployed individuals will receive them for a longer period of time. Also, workers who are receiving less than $100 per week in state unemployment payments are ineligible for the $300 federal payments, meaning that many low-income, part-time, or seasonal workers will likely not qualify.


Do higher unemployment payments have unintended impacts?

These more generous unemployment payments raise an important question: Are there unintended consequences? The answer is clearly yes.

As scholars with the American Enterprise Institute have documented, generous unemployment checks contribute to both delays in workers re-entering the economy and ultimately the economic rebound itself. Workers are not to blame—if your only job options pay less than unemployment compensation, it makes sense to delay joining the workforce again. In many situations, this is the case: One analysis from the University of Chicago concluded that two-thirds of workers eligible for unemployment benefits would receive a benefit amount that exceeds their previous pay.

These unintended impacts are another example of a welfare cliff, the idea that welfare programs often punish efforts to work—due to dramatic drops or “cliffs” in benefits as a recipient’s income increases, even by just cents per hour. For more information on welfare cliffs, visit


Georgia employers are feeling the crunch

If our goal with unemployment insurance is to serve as a bridge for workers during hard times to propel them back into employment, then our current response is not working properly.

Buffalo Rock Pepsi in Columbus, Georgia, shared with the Georgia Center for Opportunity team that it has had a challenging time this year filling positions for warehouse workers and warehouse coordinators. The resulting shortage of workers has put a strain on existing staff.

Ankerpak—a third-party packaging, fulfillment, and storage facility also based in Columbus—is experiencing similar roadblocks. The company has struggled to fill assembly line positions, and it identifies the high value of unemployment benefits as a primary reason. “Due to challenges presented by lack of staffing, we are nearly 20 people short on a regular basis. We are unable to meet our customers’ demands and/or deadlines, putting us at risk of losing business during these trying times,” the Ankerpak team shared with us.


A way forward

We are not advocating against unemployment insurance or proposing cuts, but it’s clear the existing system has unintended negative impacts. Ultimately, the right question to ask is this: What is the purpose of a public service like unemployment insurance? If it is to truly be a safety net, we must address the problem of when a safety net becomes a snare to keep hard-hit populations trapped in cycles of poverty.

Any true solution to this problem must be local and homegrown. This is where Hiring Well, Doing Good (HWDG) comes in. HWDG connects local job seekers with the training and support needed to not just find a job, but a job that leads to a sustainable wage and a meaningful career. Cooperating on a local level, HWDG brings together individuals, companies, nonprofits, and other service providers to solve unemployment and help people achieve a flourishing life.

Ultimately, the goal of unemployment insurance should be as a bridge to return to the workforce. Local initiatives like HWDG are a catalyst for that return reentry into the labor force in a better job with an upward trajectory.



Based on the most recent 2015 data, this report provides an in-depth look at the welfare cliffs across the state of Georgia. A computer model was created to demonstrate how welfare programs, alone or in combination with other programs, create multiple welfare cliffs for recipients that punish work. In addition to covering a dozen programs – more than any previous model – the tool used to produce the following report allows users to see how the welfare cliff affects individuals and families with very specific characteristics, including the age and sex of the parent, number of children, age of children, income, and other variables. Welfare reform conversations often lack a complete understanding of just how means-tested programs actually inflict harm on some of the neediest within our state’s communities.

The Power of Second Chances

The Power of Second Chances

The Power of Second Chances

By David Bass

Imagine stepping from a life of homelessness characterized by desperation and deprivation to a full, rich life in which you can contribute and build a future.

That was Jonathan’s story of transformation. As a graduate of CKS Packaging’s Second Chance Program, Jonathan went from homeless to employed in an entry-level job with a solid upward trajectory, allowing him to support his family,  save money for the future, and continue job training and education.

“What the Second Chance Program did was provide discipline, provide structure, and provide a lifeline,” Jonathan shared.

We love stories like these because they demonstrate so vividly this truth: When people are desperate, they need a sense of control over their lives. Without it, they are more likely to fall back into old bad habits and ways of doing things, such as substance abuse, crime, and homelessness.

A job with an upward trajectory is a key way to restore control and confidence in someone’s life.


Find out our full analysis of this
Second Chance Program.

A second chance

CKS Packaging is an Atlanta-based company that manufactures plastic containers for such clients as Coca-Cola, Chick-fil-A, and Kroger. The company created the Second Chance Program in 2016 to partner with service organizations in the Atlanta area with the sole purpose of recruiting struggling individuals who need a second chance at employment. 

Georgia Center for Opportunity recently published a research report on the impressive results from the Second Chance Program.

According to Lloyd Martin, the VP of manufacturing and leader of the Second Chance Program at CKS Packaging, many service providers in the community deal with surface issues without addressing the root cause of a person’s problem. In contrast, the Second Chance Program recognizes that a job, and the stability it provides, is a vital plank in rebuilding a foundation for a fruitful life.

Another graduate of the program, Greg, shared that Second Chance provided him a job after hundreds of companies had rejected him due to his criminal record. “When so many other people have said no to you, and then someone steps up and gives you a chance and has faith in you, it makes you want to give it 150% every day,” Greg says. He now plans to stay with the company until retirement.

CKS Packaging didn’t just provide a second chance for Greg. It provided a career.

Doing good while making a profit

CKS Packaging and the Second Chance Program show that it’s possible to do good business while doing good for the community. In fact, they go hand in hand.

According to CKS Packaging, the Second Chance Program has allowed the company to fill the gap in labor they were facing with long-term, dependable employees who otherwise may have not gotten a chance to turn their lives around. In the last five years, the company has hired 473 people through the program.

That impact extends beyond a company’s bottom line and individual lives to enrich an entire community.


To learn more about what Georgia Center for Opportunity is doing to help get Georgians back to work check out our Hiring Well, Doing Good initiative.

Gov. Kemp signs bill into law expanding job opportunities for military spouses

Gov. Kemp signs bill into law expanding job opportunities for military spouses

Gov. Kemp signs bill into law expanding job opportunities for military spouses



By David Bass


With our state experiencing a 7.6% unemployment rate in June (the most recent numbers available), it’s clear that every Georgian needs all the help possible to find and maintain stable employment. That’s why the Georgia Center for Opportunity team was excited to see Gov. Brian Kemp sign a new bill into law (HB914) that knocks down a significant barrier to employment for new Georgia residents.


The new law provides a temporary occupational license to spouses of members of the armed services who move to Georgia. Georgia has the 5th largest number of military, civilian direct-hire, reserve, and national guard employees in the U.S. Spouses of these employees will now have a greater opportunity to obtain employment in the career of their choice.


“Particularly in the COVID-19 era, breaking down barriers to employment is more important than ever,” said Buzz Brockway, vice president of public policy at Georgia Center for Opportunity. “Restrictions on occupational licensing can be an enormous one of these barriers. It’s the least we can do for our men and women in uniform to ensure that their spouses have the ability to work in their area of expertise in our state.”


Gov. Kemp signs ‘second chance’ expungement bill into law for ex-offenders

Gov. Kemp signs ‘second chance’ expungement bill into law for ex-offenders

Gov. Kemp signs ‘second chance’ expungement bill into law for ex-offenders



By David Bass


For many Georgians, past criminal conviction can be the most significant hurdle to overcome in getting a job. On this front, there is good news: Gov. Brian Kemp recently signed a bill (SB288) into law that allows formerly incarcerated individuals to petition the court to have certain misdemeanor convictions erased from their record four years after the completion of their sentence. 


The new law excludes certain offenses, including sexual offenses and DUIs. In a crucial move, the law also creates incentives for employers to make “second chance” hires.


This new law allows for an easier transition back into the workforce for a segment of Georgia’s population that has paid its debt to society and stayed on the straight and narrow.


“This new law is monumental because it takes Georgia off the list of only a handful of states where a criminal offense stays on an ex-offender’s record perpetually,” said Buzz Brockway, vice president of policy at Georgia Center for Opportunity. “We know that unemployment is a key way to help ex-offenders not repeat their crimes. Particularly in the COVID-19 era, breaking down any barriers to employment that we can is always a huge win. We applaud Gov. Kemp and the Georgia Legislature for making this law a reality.”


Hiring Well, Doing Good is ramping up in Columbus!

Hiring Well, Doing Good is ramping up in Columbus!

Hiring Well, Doing Good is ramping up in Columbus!

We recently received the alarming news that 40% of low-income households across the U.S. reported a job loss in March due to shutdowns from the COVID-19 pandemic. Closer to home here in Georgia, Columbus faces a rising unemployment rate (12.2% as of April) that is sure to spike to between 14% and 20% when April numbers are released. 

In the middle of this economic disaster, Georgia Center for Opportunity’s Hiring Well, Doing Good (HWDG) program is expanding rapidly in Columbus. We are now open to forming partnerships with businesses and nonprofits in the region!


What HWDG does

HWDG brings together community resources and technology to help un- and under-employed individuals achieve economic independence in three ways:

  • Offering support: Individuals can easily search for local service providers who can help them overcome barriers to employment.
  • Helping people find their strengths: Job seekers can identify their strengths and opportunities for employment through a soft skills assessment, a library of training programs, and a career pathway generator.
  • Linking people directly with job opportunities: Job seekers can then connect with jobs relevant to their skill sets and personal preferences and geographic area.

Help for people like Marshayla

HWDG helps people like Marshayla Walker, who grew up in poverty in the greater Columbus region and struggled for years as an unemployed single mom. Marshayla heard about HWDG and attended training offered by Troy University, where she is currently majoring in psychology with a minor in global business. She said she is grateful for the support, encouragement, and resources HWDG offers and feels that she is now equipped to break into the competitive HR field upon graduation—with a new-found confidence that she can work her way up the career ladder and give her son opportunities she did not have growing up.