Of Peace and Politics

Unemployment: Not Off the Hook Yet

By April Mays on 01/12/2012 @ 03:47 PM

Tags: Domestic, Taxes

April Mays

In 1935 the unemployment insurance program was established and described as a program that "differs from relief in that payments are made as a matter of right not on a needs basis, but only while the worker is involuntarily unemployed." What a wonderful idea! To have a social insurance program in which people are eligible for the compensation based on having been a part of the work force and having paid into the program but are now unemployed. This program was not intended to have stipulations placed on it that were unrelated to job loss however H.R. 3630 would like to place an education requirement, drug testing, and other barriers on the program for the unemployed and states.

One change that the bill proposes is that those receiving compensation either have a high school diploma, the equivalent, or working to obtain this education requirement. There are two prominent concerns with this. One is that over 80% of those that are relying on U.I. are over the age of 45 and have been in the work force for years, not needing a high school education. Although it is hard to imagine in today's world, people once could support themselves without high school diploma. These numbers speak for the many that did just that until their skilled labor jobs were sent overseas. The second concern is that states are not equipped with educational programs to allow people to sign up for their GED even if they wanted to. There are waiting lists, lasting for months, for such programs totaling 160,000 people in 2009 into 2010.

Then there is also a provision for drug testing. This seems to be based on the idea that those unemployed are lazy drug users. Interestingly enough at least 20 states already deny benefits to anyone who had job loss related to drug use. This would be a huge expense to states with a guarantee of almost no results. The drug testing alone would cost states between $25 and $75 dollars per test. Similar drug testing in Florida for TANF and in Indiana both have proven to have been unfounded expenses in comparison with those found using drugs to only have been 2% and 1% respectively.

There is also a requirement to determine the "need" of compensation because of an exaggerated claim that millionaires are receiving benefits. This sets the stage for not allowing those with high income levels to qualify for benefits. Again since this is an insurance program for all workers that become unemployed it is unfair to exclude high income earners since losing a job could have significant impacts on their well-being as well. U.I. is not a viable solution to get richer quick since states cap the maximum amounts of benefits. This ranges from $235 in Mississippi to $625 in Massachusetts per week, not to mention in 2009 only 0.015% millionaires received unemployment benefits. Another aspect that would affect people receiving U.I. is the proposed requirement that beneficiaries would have to do mandatory community service to "work off" their benefits. This would allow employers to have a largely free labor force even though these methods have not been any more successful at returning the unemployed to the work force. As if that is not enough, there is also the authorization to states to reduce unemployment compensation by $5 each week to fund re-employment services that have previously been funded through taxes. Five dollars is a significant amount considering the average benefit is slightly under $300, only a third of the averages workers normal wage.

The House bill is intrusive and overbearing on states and people with no justification. There would be additional requirements on states to more heavily track those unemployed applying for jobs, a requirement states to not have the funds to meet, even though many states already have programs in place that work best for their state's circumstances. Also states would be required to collect over-payments to those unemployed even if the fault was not on the part of the unemployed. Previously, had an error been made by the state in the amount paid to a beneficiary the state would correct the error but not demand repayment. However, by changing the wording of the current law, the state would be required to collect from anyone who had been overpaid, without consideration of the hardship that this may cause the person.

Just like SNAP and other safety nets in place to shield from the blow of a faltering economy, U.I. is doing exactly what it was intended to do, demonstrated by more people using the insurance program. The changes being proposed are not trying to fix a broken system, but instead to hinder a program that could actually use more help not more barriers. With the ratio of people seeking work to available jobs being 4 to 1 it can be expected that this program is needed more so now than in the past. There is no foundation for the claims that those who do not have jobs are drug users or uneducated. If Congress truly wishes to help the unemployed and the unemployment insurance program then it should fund job placement programs, educational and training programs, and work to create more jobs for a struggling economy.


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