Spa Workers Making More On Unemployment Upset To Receive Small Business Loan

Spa Workers Making More On Unemployment Upset To Receive Small Business Loan

One small business owner in Washington state thought her employees would be thrilled at the news her company became one of the lucky few to receive federal assistance from the Paycheck Protection Program (PPP).

Jamie Black-Lewis, who operates two spas in the state received two loans for her shuttered businesses, totalling $177,000 and $43,800, according to CNBC, while thousands of other closed enterprises were out of luck as funds for the federal relief program exhausted by the end of last week.

Black-Lewis will now be able to keep her 35 employees on payroll at Oasis Medspa & Salon in Woodville and Amai Day Spa in Bothell after being forced by the state to layoff staff and forgo a paycheck herself.

Much to Black-Lewis’ surprise however, her employees were not so pleased.

“It was a firestorm of hatred about the situation” Black-Lewis told CNBC.

To have the low-interest loans forgiven under the PPP established in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, much of the money must go to paying employees to keep staff on payroll and maintaining the same number workers. Businesses that receive aid under the program have until June 30 to bring back those who have been laid off or furloughed.

Black-Lewis had intended to adhere to those conditions to avoid sinking into further debt that could jeopardize her business. Her employees however, had discovered they could rake in more money on unemployment rather remaining on payroll after Congress beefed up benefits with an added $600 a week on top of whatever states provided in the CARES Act.

“I couldn’t believe it. On what planet am I competing with unemployment?” Black-Lewis told CNBC.

The $2.2 trillion stimulus package passed in March also extended the duration of benefits for those out of work. Lawmakers rushed through the legislation however despite the consequences to get relief to people faster and included direct payments of $1,200 to all individuals who earned less than $75,000, regardless of employment on top of the increased unemployment benefits.

That has led to many low-wage workers bringing in more money on unemployment than they would working their regular jobs, such as those working at Black-Lewis’ spas.

“They were pissed I’d take this opportunity away from them to make more for my own selfish greed to pay rent,” Black-Lewis said to CNBC,

New unemployment data released from the Department of Labor Thursday morning shows more than 26 million Americans have filed new jobless claims within the last five weeks. More people have now filed for unemployment than the entire populations of Mississippi, Kansas, New Mexico, Nebraska, Idaho, West Virginia, Hawaii, New Hampshire, Maine, Montana, Rhode Island, Delaware, South Dakota, North Dakota, Alaska, Washington D.C., Vermont, and Wyoming combined.

Congress is expected to replenish the PPP with $310 billion in fresh funds on Thursday after congressional Democrats blocked funding to sustain the program for two weeks.

Tristan Justice is a staff writer at The Federalist focusing on the 2020 presidential campaigns. Follow him on Twitter at @JusticeTristan or contact him at [email protected]
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