I think the effects of price stickiness (on goods and labor) aren’t being adequately considered in these discussions. Yes, these restaurants could raise their wages to compete with unemployment, and many have. They’ll also need to raise their prices, which they have leeway to do, because everyone is facing the same costs.

The problem occurs in a few months when the bonus unemployment runs out. Then there will be millions more people looking for work. At that point, expanding employers will be able to hire at lower wages again. They’ll also be able to offer goods at lower prices. Employers who stepped up to pay higher wages won’t be able to compete. They’ll need to cut prices and cut wages or lay people off. That will be painful, which makes holding out until wages lower more attractive.

Employers can get around this by offering signing bonuses instead of higher wages, but they need to be large to compete with unemployment checks, and it may not make sense to do that for a few months of work.

These conditions may present a unique opportunity for policymakers to increase employment by raising the minimum wage.