Saturday, January 9, 2010

Is Extending Unemployment a Good Idea?

In most states, you can now collect unemployment checks for 79 weeks. I have mixed feelings about that.

Arguments in favor of having extended unemployment payments to 79 weeks.

A role of government is to supplement private charity in helping to compensate for inequalities, especially those not a person's fault. A person doesn't qualify for unemployment checks if he's fired, only if he's laid off because the company is downsizing, has changing needs, is offshoring, etc.

And even if the person was laid off because, in fact, he isn't the brightest or most skilled or most driven, some of that is not his fault: partly a function of genetic predispositions, upbringing, the socioeconomic status of his family, etc.

In a society in which many business owners and executives live wealthy lifestyles, wealth often created by offshoring jobs and making remaining American workers work longer and harder, thereby allowing downsizing, isn't it fair that a laid-off worker get unemployment checks while she is looking for another job? And in this job market, that can indeed take as long as 79 weeks.

Besides, the laid-off workers contributed part of the money that pays for unemployment insurance. When they become unemployed, shouldn't they be allowed to collect?

Arguments against extending unemployment payments.

Unemployment insurance, paid for by employers and employees (you and I), encourage laziness. A number of my career counseling clients admit they deliberately tried to get laid off so they don't have to work but could instead collect unemployment checks for 79 weeks. One client said he got himself laid off by working just fast enough to avoid being fired but slow enough to be put at the head of the line when the company was deciding whom to lay off. Another client got herself laid off by threatening to file a racial discrimination suit, which, when the employer balked, said she'd agree to forgo-- if the employer agreed to lay her off. Another client was laid off legitimately and had started to look for work when his 26 weeks of eligibility for employment checks was drawing near, but when the government extended payments to 79 weeks, he stopped looking. A relative of mine told me that unemployment check recipients are required to, every two weeks, submit five names of companies they contacted in looking for work. This guy simply copied company names from the phone book without having contacted anyone.

Extending unemployment benefits ironically results in job cuts because the extension forces employers to pay more per employee. That, combined with the many other employer burdens (for example, Family and Marriage Leave Act, Medicare, disability, FICA, other retirement plans, and soon, government-mandated health care payments) pressures employers to offshore, automate, and downright eliminate ever more jobs, and requiring existing employers to work yet harder. Extending unemployment benefits is supposed to help the average worker. Net, it may hurt them.

What do you think?


Tech Writer said...

Do unemployment payments laws vary from state-to-state? My job as a company's only tech writer was eliminated on Sept. 17, 2005. This was in a small, Midwestern state. I did not receive my first check until the latter part of November. I was told this is done on purpose to "encourage" recipients to find a job. In addition, the amount was not enough to live on. I received a total of two unemployment checks before moving to another state for a contract position that lasted two months. If unemployment had kicked in sooner and paid more, I would have been able to take my time to find suitable employment.

Marty Nemko said...

Yes, it varies a bit across states.

Anonymous said...

I support a basic social safety net. What happens if a guy with two kids is suddenly laid off from his job? It happened to my friend, a Republican conservative, who was more than glad to take unemployment so he could feed his family. He was unemployed for maybe 6 months until he found that he qualified for some free retraining for displaced workers (his job had been outsourced to India). He took that too, and now has a higher paying job in a similar field.

I think 79 weeks is not extreme. The U.S. is pretty stingy with social benefits compared to most Western nations. What are people supposed to do, go live on the street? I'm sure some lazy people abuse the system, but that doesn't mean that most, through no fault of their own, might need unemployment just to survive when their job suddenly disappears.

Maureen said...

Did you fire those clients as soon as you found out how evil/lazy they were? To help them seems unethical and hypocritical.

Marty Nemko said...

Honestly, I didn't. Candidly, because I really didn't think about it. I should have and will be more conscious of this in the future. Thanks, Maureen.

Iiona said...

I think it is a good idea, I know of 1 person who is being screwed by his union. He is in the construction buisness, he was told on several occasions that they had a job for him that would last about 2 months if not longer. So he goes, finds suitable childcare ($200-$400/week for 2 chldren). Works for 2 days and then is laid off again. Why because they really only needed a few good men to tear something and that was it, but they don't tell the guy that. So he has just paid for childcare for the week (which is nonrefundable and has to be paid before services are rendered) by time he gets his paycheck he has just worked for nothing. Another case, a guy sustains a back injury at work by falling off a ladder. Workers comp refuses to pay after a while and tells the guy you are fine to go back to work (so he tries) he is also in the construction buisness (where you can't be on medication while working a very dangerous combination) he makes a go of it and it doesn't work. It is now almost 2 years later and he is still fighting workers comp and has a family to take care of with 1child that is sickly. By his PCP he is unable to go back to the type of work he did before the accident but everyone is dragging their feet so he qualifies for UE benefits. That is how he helps pay for rent and food and other household expenses. It sucks for both of those families because the wives make about 1/2 of what their husbands made when they were working, now their income has to become the a main source. If it wasn't for the wives jobs no one in those families would have health insurance. It's a scary situation and unfortunately a lot of homes are like this now. Not every case is as such but there are a lot of people out there that are stuck, no one is hiring and everyone is looking... so UE helps in every little way possible


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