I bumped into an old co-worker at the gym. We used to be shift supervisors together back in the day. Our professional paths meandered in different directions over the years but we’ve always kept in touch. It turns out, he was just let go and after expressing my concern, he actually joked, “I’m better off actually. You’d never believe it but the difference between me working and being on unemployment for the next 2 years is like $100 a month. Why should I bother?” He was pretty candid and admitted, “I never thought I’d be ‘that guy‘ taking advantage of the system, but seriously, who the hell’s going to work 40 hours a week for 25 bucks?”
He’s got a point?!
More To It
So, he isn’t what you might stereotype as the “typical” unemployed take-advantage-of-the-system type guy. For one, he’s an engineer with years of operations, lab, analytical, technical and supervisory experience. He’s no schlep. He was also relatively well compensated – probably well into the six figures in some years when accounting for all the overtime he was working.
And you’re also probably wondering about the financial piece. The most unemployment inusrance usually pays is like $2200 a month or something, so how the heck is a guy with his qualifications working for under $30K/year to make it a wash over working (if he was highly compensated)? That’s where it gets interesting – but is probably representative of thousands upon thousands of Americans in the same boat.
See, at his old job, he was pulling in big bucks, especially with the overtime he was working. He then got divorced. They had kids. So, between the child support and the alimony, he was paying out over $3,000/month after tax. That sounds insane, but that’s what the judge ordered – OT or not (since overtime is anything but guaranteed). Fast forward to today. He had been laid off from that high paying job#1, took a job for less money as a contractor back at our company and his ex-wife went to work for a decent salary and benefits. Now that he’s laid off, ironically, he’ll owe no more child-support, his wife will actually be PAYING HIM and when he adds up the old $3,000 he WAS paying, the new money his wife has to pay him and unemployment, it’s about a wash! While his wage income may have just dropped to zero, his net cash inflow remained virtually unchanged! He can basically hang out around the house for the next two years and be in a better position than when he WAS working.
It’s crazy, but even a well-paid white collar worker with a skill set in demand can make out better off “the system” than working. He said when he told his wife, she was like, “There’s no way I’m paying you a dime”, but he said he already talked to the lawyer and that’s the way it’s gonna be. So, he’s golden in his book. I get a sense he takes some satisfaction in the “revenge” factor a bit as well since he was obviously displeased about all the money he had for fork over to her over the years.
I did remind him that come the end of the 2 years, it might be difficult to get back into the workforce because he will have been out of work so long, but he said it didn’t really matter. Compared to his prospects now and working for free, it just didn’t make sense.
What Would You Do In His Shoes?
Is the System Set Up with the Wrong Incentives?
Know Any Able-Bodied Workers Who Choose To Collect Over Work?