Do generous unemployment benefits prolong the length of unemployment?

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The latest news is that unemployment benefits will be extended from 59 weeks to 79 weeks in California with the help of the new Federal stimulus money.  The maximum benefit has risen to $475 a week and it means that some of the unemployed Californians  could collect over $2000 a month for more than one and half years. This makes me wonder if people will now stay unemployed longer because they have more benefits for a longer period of time.  After all, more "free" money would make a person less motivated to find a job, right?

Here is some anecdotal evidence that more unemployment benefits actually makes people less inclined to work.  There are a couple of my friends who actually want to be laid off just so they can collect the unemployment.  They all qualify for the maximum benefit and they do not particularly like their jobs.  They actually do not mind getting a "vacation" while living on unemployment because they are young and single and their expenses are low due to shared living conditions with their parents or friends.  There are a couple others who are already unemployed who think it is awesome because they do not really have to do much to collect the money.  At least one of them plans to use the break to prepare for graduate school, and that seems fairly productive.  If you think about it, $475 a week is nearly $12 an hour if you consider each week as 40 work hours.  $12 an hour is much better than minimum wage, and they do not have to put in much effort to get this money.
 

Then I did a bit of research and it seems that I am not the first person to question the effects of generous long term unemployment benefits.  There has been many studies done on the amount of unemployment insurance in relation to how long people stayed unemployed, and most of them do find that more unemployment benefits do steer  people to stay out of work for a longer duration.    This is not really surprising because if the unemployment benefits cover someone's expenses then they would not be in a hurry to find another job.

I talked about this to another friend for a bit and he said that in a way unemployment benefits is efficient in that it allows skilled workers to take their time to find a job that suits them, and not just settle for a minimum wage job out of desperation.  This is actually the same argument by an economist named Raj Chetty.    Basically, he argues that there is nothing to celebrate when people have to work at unsuitable jobs.  I believe there is definitely merit to this argument because if you are an unemployed engineer you would probably be very unhappy to be working at a fast food joint  out of desperation.  Also, the engineer would be taking the job of someone whose skillsets are more suited for fast food, and that would make the other person unemployed.

The bottom line is that I believe that unemployment benefits  is definitely useful in our economy because it keeps many people in their homes and away from crime in times of need, but there needs to be a reasonable cut off to how much benefits are given.  I personally think 79 weeks of benefits is just a bit too long, and sometimes people just have to put the "perfect job" on hold for a bit in order to survive. However, activities like preparing for graduate school or starting ones own company during unemployment may turn out to quite productive.  What do you think?  Is 79 weeks of benefits way too long?  Do you think more unemployment benefits will be a boost or detriment to this economy?  Have you felt less motivated to find a job when you receive extremely generous unemployment benefits?
 

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Guest's picture
Guest

There should be some sort of reward for turning in the losers. Like the friend of a friend that collects unemployment, and has an off the books job, whose now debating where she wants to go on vacation.

Personally, that and the war is why I figured out how to stop paying my taxes.

Guest's picture
Guest

I agree with the poster #93. I `m sorry you and your family have been affected so greatly by the economy. I too have lost almost everything because of the downsizing of the company I worked for. I worked for the airline for 20 yrs and after 9/11 they reduced flights, hours, benefits, everything. They layed off thousands of people. So I got into the mortgage title business,but after the mortgage meltdown, I lost that job as well. I have applied for numerous positions, but am I supposed to take a job paying 10.00 an hour? That won`t pay my bills and puts me in no better position than I am now. Like a poster had mentioned earlier, most companies wouldn`t hire me anyway for an entry level 10.00 an hour job because of my background and experience. They know they are not paying enough money for someone over the age of 20 and not living with their parents to survive on. They know you are only taking the job as a stop gap till something better comes along. So, people like me get stuck between a rock and a hard place. Too much experience and work history to get an entry level position and not enough jobs in the mid to higher end positions. Thank God I have friends who are helping me. It`s quite a humbling experience to say the least. I have never been unemployed since I was 12 yrs old and I`m close to 50 now.

Guest's picture
Guest

$475 per week for 79 weeks means homelessness in the California Bay Area, if you are working alone. No body would pass up a job that they really want, even if they're receiving unemployment. If your paycheck is being deducted while you are working, it should be fair for you to collect as long as you can. It not like the economy is going to get better anytime soon, so pay attention. I rather see people collecting unemployment than committing crime, not like everyone would do just that, but there's a high chance.

Guest's picture
FriendinFresno

I have more than a couple of acquintances in California who laugh at me when I ask how their job search is going. One in particular is degreed, capable of making 30-40k if she looked for a real job (yes, they exist where we live). She had a series of interviews with the IRS. She decided not to take the job because it paid only 10 dollars an hour and she was making more than that on unemployment. She is praying for the extension so she can sit on her butt more. She's not even looking! I wish she was the only one I knew, but I know many people who aren't interested in finding a job until the benefits have expired. Do I believe in assistance? Yes. However, there MUST be better controls in place if they are going to provide this benefit for any duration of time, say over 3 months. I'll admit, it upsets me that I work my butt off (I own my own business but pay myself a salary) while she sits home and does nothing.

Guest's picture
FriendinFresno

I personally take offense to paying into your unemployment fund if you insist on carrying COBRA AND retaining your savings. As one poster stated, we are entitled to the pursuit of happiness but not everyone will reach it. This is so true. Life deals EVERYONE all kinds of blows. We are a country of whiners who feel they are 'entitled' to everyone. No, you aren't entitled to wait to find a job that you want. You go get a job that comes as close to paying your bills. You downsize. You tap into your savings. AFTER you have exhausted those avenues, THEN you should file for UI.

Guest's picture
jb

I personally take offense so someone who hasn't experienced losing their job in this current economy judging those who have.

It's easy to tell who still has their job and who has lost theirs by the opinions.

You think it's wrong to take COBRA and try to retain your savings and collect unemployment compensation? You think it's a good idea to spend down any savings and then when you're broke and can no longer pay for health benefits for your family, then to apply for unemployment? Isn't having some kind of cushion of savings preferable, in case, for example, you have to travel to try to find a job in a different area, or if you have some large medical expense?

I should add that none of us pay into unemployment; it is paid by the employers.

I should also add that those low paying jobs that the unemployed people ought to accept don't really exist anymore. For instance I know of a schoolteacher who lost his job and has applied to be a bartender, a night club bouncer, you name it. Nothing.

If I tried to get the Wal-Mart job I'm fairly sure I would be passed over in favor of one of the multitude of laid off retail workers who already have experience in that field.

I think it's a crock that many people are just waiting to find a job; basically THERE ARE NO JOBS. You can keep looking but it's like doing the same thing over and over and expecting a different result. No one is hiring.

Remember when the L.A. Dodgers were hiring for ball park staff and 10,000 applicants showed up for 500 positions; everyone from homeless people to unemployed lawyers.

BTW my savings went away in 2007 when I was first laid off; I found a job and how I'm unemployed again. Now I have no savings, I have no health insurance, I am glad I have 79 weeks to find a job, maybe by the end of this year (hopefully sooner) things will start to turn around.

My suggestion to those of you who are fortunate to be working is to quit your whining; it looks different from this side.

Guest's picture
Guest

I totally agree with the above post, # 98. For those of you judging others, think about what would happen if you lost your job. If you have a job, be thankful. Your future of whether or not you have a job depends on others. You are dependent on your employer to run the business succesfully. If your employer fails, so do you. If you happen to work in an industry that is so far immune to the economy, then be grateful. Most people in the unemployment lines are where they are through no fault of their own. We were out there working and making a living just like you, but we either worked in an industry that was the first to be hit or we worked for companies that the big shots were not being frugal, either way, it was out of our hands, just like your job. Remember, you work FOR SOMEONE ELSE. Your future is in their hands. You could be a one decision away from being where we are. It`s up to your employer.

Guest's picture
Guest

I am VERY grateful that we have the UI benefit to help my husband and I get through a very difficult time. He just lost his job and without the benefit we WILL be faced with losing our home and everything else we have worked so hard to build. Not a position I want to be in at age 55. We are ALL at the mercy of the big decision makers in the companies we work for and are just a decision away from poverty. Try walking in the shoes of Americans that have fell victim at no fault of their own and then talk smack about UI.

Guest's picture
Guest

Very few people in California are receiving $475 per week.
That is for the very top wage earners who lose their jobs.
I made $30,000 a year and when I lost my job my benefits were 256 per week! I have two kids and rent at 1500....explain to me how this is "vacation" money?! I can not get by period!

Guest's picture
Guest

The ironic part is that a lot people are still employed because of government bailouts. Anyone employed in the banking,auto,financial industry,not to mention those that indirectly benefit from those institutions,still have jobs because they were bailed out by us (the people). Even people on UI have to pay taxes on that money. That is what`s so frustrating for me. MY tax money goes to bailout other people so they can keep their jobs,but nobody gave my company a bailout. Then to listen to people who were bailed out criticize the people who now have to take UI benefits is a joke.Maybe we wouldn`t have to take UI benefits if we got bailed out like you.

Guest's picture
J.

Xin wrote:
Social Security is a system that is based on the credits you have already accumulated. I believe you can get social security disability benefits as long as you have several years of work based on your age and you qualify for the retirement/death benefits if you have 10 years or 40 credits of work. It doesn't matter if you are unemployed now as long as you already qualify for the benefits based on your entire work history over your lifetime.

Social Security is more than one program, and different programs have different requirements. To qualify for disability, you need to have a certain number of credits in the previous 10 years. For example, I currently do not qualify for disability insurance with SSA because I was a graduate student for 6 of the last 10 years. Even though I had income during that time, it was FICA-exempt, so I have no SSA credits from those years. So there are incentives to keep working at a job without large gaps in employment.

Guest's picture
L. Kimberly

I'm surprised that nobody has mentioned the billions of dollars the government gave to bail out AIG. To begin with, it's ludicrous that a company who developed a new money making scheme by insuring mortgages has been given billions of dollars; all because they're too big to fail.... but it is partially this logic that is the argument for extending unemployment benefits as well. The difference is that AIG created it's own massive mess. Unemployment recipients did not.

Between Wall Street, all of Bush's debacles that contributed to this clusterf*%^k, and this global economic crisis that's hitting most countries in the world, are people who are so-called "abusing" their unemployment payments really the culpable ones?

Regardless of how people are using their unemployment benefits, in reality that money goes back into the local economy and supports businesses, who in turn pay taxes and are able to keep employees. If unemployment benefits were not extended, I can't imagine the mei lei that will ensue. Hopefully the extension of benefits will enable people to better position themselves, in whatever way, to eventually figure out how to depend on themselves.

People argue that giving money to homeless people is wrong as they perceive these individuals may use it to buy drugs. I never saw it that way. It is the individual's own choice how they choose to spend their money, and what they do with it is none of my business. In small towns in Italy, in a bygone era, the community would collectively support the "village idiot".

I think what the author is questioning is the ethical questions of using unemployment benefits to further oneself by education or starting a business. In a few states, there is a fund similar to unemployment benefits
called self-employment assistance that allows you to do just that. Interesting that most participating states are on the east coast....

I would argue that an individual who uses it to educate themselves or starts a business should be commended. Hopefully they succeed and are able to contribute greater tax dollars and jobs in the future.

Guest's picture
Guest

I get the maximum amount for unemployment (which comes out to around $1850 a month after taxes) and I have to say it is a lot less than what I'm used to. After rent and utilities ($900/month), cobra premiums ($150/month), car payment gas and insurance ($400), and food and other necessities ($400/month) there is nothing left. And on a bad week when I need extra money to fill a prescription or buy contact lenses I'm eating ramen noodles to survive. And it is scary because if I were to have some sort of emergency or crisis then I would not have the means to financially take care of it. I really do appreciate that I have the money from unemployment so I can go without breaking my lease and pay my bills on time. But what needs to be understood is that unemployment pays a lot less than what I'm used to so I'm definitely looking for work ASAP and not lounging around. And I've worked since I was 16 years old (I'm 31 now) without ever having to use it before, so I feel that I do deserve to benefit from it now that I do need it. It is unfortunate that some people who may not have rent or bills abuse the benefit but it wouldn't be fair to deny people like me the benefit. And I'm lucky that I am single and I don't have kids to feed because even though I get the maximum amount it's a struggle to take care of just myself with that amount.

Guest's picture
Guest

Taking a job that pays lower than what unemployment pays makes no sense when unemployment isn't even enough. Do the math! If unemployment benefits can barely make you scrap by then a job paying less than unemployment will get you evicted and probably file bankruptcy. We'll sink into more economic despair if more and more people are forced to break their lease or foreclose on their home and file bankruptcy.

Guest's picture
Guest

I'm in Illinois, 31 year old male and married. I was laid off a few months ago after working for close to five years at the same job. With overtime I my yearly salary was close to 60k. I'm collecting 365 plus 144 for my son plus 25 from stimulous per week electing to pay taxes later. My wife is employed and I get medical insurance through her company which also covers our son. For my situation, getting laid off was the best thing. To be honest I haven't been looking for a new position because to me the unemployment check over 1k every 2 weeks plus the time I spend with my 3 year old son is invaluable. We are definitly not scrambling and we even save money each paycheck. I know everybody situation is different, but I wanted to let you know mine.

Guest's picture
Dan

It is sad to read a blog like this. I don't think we love to collect unemployment benefit. I wish I get a job and stop collecting unemployment. It is with guilt and shame I get this and I have not even told my friends this thing out of shame. And there are people who make fun of people who are simply struggling due to this bad economy.

I am an MBA and I was making 80K a year. I now just get around 2k per month that is hardly good enough to put me under the roof. The notion that I am not looking for a job since I am collecting $475 a week is so wrong and flawed. I am even applying to jobs that just pays $40-$50K per year. That is 50% down to what I was making. The notion that I should be looking for a dishwasher job is so disgusting. Would I not be replacing those people who would just qualify for those jobs should I seek those jobs too??

Shame on this kind of writing!!

Guest's picture
Guest

How dare you people make comments of how long (you)comments makers, believe that a poverty stricken nation recieve Help! We are a people who have worked all of ours lives ,and our lively hood was taken from us not by mistake but by GREED! not due to the peons but the upper executives we are a people that awoke every morning, and was in the 2 to 3 hour l.a traffic coming home to get a few hours of rest before we had to rise again for another day. We are a people that made the best life we could to get our children through college and grad school to become well versed citizens that will give back to the communities. in order to bring our nation out of a selfish .greedy world. A world that is totally in a spinning cycle of being lost. We are grateful in the hopes that we would could have the opportunity to have 59/79 weeks to be retrained in a new job field. So we can stand as american again ,and not feel like we are a third world country.

Guest's picture
Betsy R.

Unemployment regulations are generally the same throughout the US: you have to be looking for work (maybe as minimal as ONE RESUME per week--not much of a search), accept certain work at a lesser pay if offered, and usually can't go to school unless the Workforce Commission pays it. It may be possible in some states to go to college if you sign a waiver that says you will quit school if you get work. You can read your state's policy on the net.

Usually, your state employment or workforce commission won't do squat to help you get a job, so most of the regulations are a joke.

I have a college degree. I could not get public money for school, join the military and get their perks, or get any other initial breaks. But I paid for everyone else's breaks.

It's always been difficult for me to find a job, but I worked for many years. I'm on SS disability. But the two times I got unemployment compensation, I felt entitled to it.

My UIB benefits were a tiny drop in the bucket compared to what the NASA staff who just squandered my tax dollars on bombing the moon get in perks.

It is true that Europe has a better safety net than the US.

Someone complained that food stamps would only give a family of 5 who received $275 weekly unemployment partial food benefits.

I worked in food stamps many years. You are supposed to spend part of your UIB money, paycheck, Social Security, or whatever for food! Full food stamp benefits go to people who have ZERO countable income.

Some government money is "worth" more than other government money. Unemployment compensation helps you out better than food stamp assistance in terms of the dollars you get.

There was a time when I used cash advances againt a credit card to cover COBRA expenses, around 1989-1990, when my premium was only $147.74 month. Eventually, I could not pay the credit card balance, so I'm a credit deadbeat too.

If you lose your job, you don't have to pay for costly COBRA. The emergency rooms can't turn you away. Try and find public or charity clinics for ongoing medical needs. You can get costly meds thru drug company programs. Maybe you can pay a doctor $150 month in lieu of COBRA and get some $4 drugs. I have a wealthy cousin who doesn't have insurance and she pays her doctor herself; he works with her to prescribe drugs she can afford.

For those of you in California, I do understand that the undocumented aliens overload the public health care system and that it's hard for the taxpayer to get anything. Keep trying.

For some reason, any kind of social service spending in US gets blasted, yet it's just a tiny drop in the bucket. Look at the pie slice on an income tax 1040 booklet and you'll see where the money goes. Most of it goes to Social Security. So-called welfare programs are minimal.

Guest's picture
Guest

The writer here fails to discuss one important issue. People simply outnumber job opportunities today. Alsh they fail to mention, undocumented workers holding many jobs illegally. This is no longer simply a field worker type job. So as many of us collect this life line of survival, society roday needs to educate itself as you may be one pink slip away form losing your livelihood.

Guest's picture
Guest

I am 35, lived in CA for 5 years, worked for Wamu, started off with 50k and was laid off at 100k, left and went back to Germany after that without ever collecting a dime of unemployment. Big paycut to 60k in my new job here, but at least I get six weeks of vacation. I was surprised in CA how many Americans live paycheck to paycheck. Why is it necessary to have the biggest apartment/house, car etc. you can afford. I had roommates, paid cash for my car, and saved more than 50% of my income. And btw I have been doing the same even during university (at 500 Euros a month sponsored by my sponsor company),and in my first crappy jobs out of school earning 20k, that meant a crappy apartment and old car, low cost entertainment such as mountain biking and parties at home with friends instead of going gout. I do not have a cent of debt, always paid my credit card in full by direct debit every month. Having less than 2 years of full living expenses saved up is financial suicide in the long run in my opinion, especially if you have kids (I am currently 7 months pregnant). Getting unemployed is terrible and traumatic, but it is exacerbated by having lived at or close to your means, or even above, for years - instead of well below, and not having saved much. A lot of people will have to get used to a permanently lower standard of living as a result of this "Greater Depression". Downsize now, do not wait until your unemployment runs out or savings are exhausted. If you then end up getting another well paid job, all the better. You will sleep very soundly with lots of cash to spare at the end of the month.

Guest's picture
Guest

I think that it all depends on the person.  My husband just got layed off last week....he just applied for unemployment and we both can't wait till he gets employed once again.  He is not just sitting back being a burden on the economy.

Guest's picture
Guest

I think unemployment is messed up! I have a 4.0 BSc degree from McGill, top U in Canada, a 4-year 4.0 Masters degree, worked through both of them, but havent found a high paying job so far. But I choose to work a lot and start a business. I make only 1200 a month... and last year I lost 6000 with my business. Can you imagine how thrifty I have to be? I do not get medicare because I'm right above the limit. It sickens me to read about people making 2000 doing nothing. And some even want you to feel bad for them because they have a mortgage on a nice house and have kids. Well for one, they chose to have kids. I chose not to, in part because I cant afford them right now and wouldnt want them to lack anything. As far as the house goes, I live in a decrepit apartment, and have dreamt of a house my whole life. But I haven't taken the leap because I don't expect people to come rescue me when I can't pay for it. I'm waiting til I can actually have almost enough in the bank to pay it off. Sick of people who choose security and hard work paying for those who choose luxury and risk.

Guest's picture
Guest

forgot to mention - i never had the luxury of getting benefits at any of my jobs. that's the reality for many of us out there. i worked for places that would never fire someone so they dont have to pay for unemployement. They know the job is miserable enough that you quit when you burn out. Now I'm trying to contribute to the economy by starting a business - you'd think i get a break! when i read about the sense of entitlement people have, for most laid off workers who post to think they somehow deserve continuing pay when they are not contributing anymore, it is pretty discouraging.

And it IS fair for those of us who werent laid off and have crappy jobs to comment on those who lost their jobs. They obviously made a lot more money than is necessary to get by, they had the choice of saving it or of blowing their revenue (which i still doubt is THAT much more "hard-earned" than any other minimum wage physical laborer). They made the choice, and experienced the benefits -  vacations, fancy restaurants and food and cars and houses. Now they experience the downside - the responsibility. A little help, yes. A big salary for nothing, no.

Guest's picture
Black Sandee

I haven't read all of the comments and not sure if anyone pointed out that the unemployment benefits are keeping the economy going, instead of things collapsing like a domino. With my unemployment benefit of $475 a week, I am putting food on the table, paying partially for daycare, electricity, rent, pet food, health insurance etc - while I seek another job. If I did not have that, my landlord will be out of tenants, all my utilities will be cancelled, kid pulled out of daycare--domino effect on everyone who is impacted with MY job loss. The world is no longer you vs. me. We are all connected.

Guest's picture
Christopher M

I find it fairly typical of the world when I read articles like this that pertain to people that recieve unemployment. The writer in this case seems to believe strongly but, posed it as a question, that people recieving unemployment benefits are some how enjoying this situation! People that are on these benefits are very happy and are trying I am sure desperately to get a full time job with benefits!

I find it pretty disgusting that this right wing approach that everyone receiving help of some kind is out to make money at the expense of people of the US. This is proposterous! Once a person has recieved their benefits completely they can not apply for benefits until they have worked for a year!

Why would any individual who has worked for usually a number of years want to go on insurance for a very long time? Do you think this feels good and is part of that person's ethics in working? No it isn't!

Well Xin Lu wow what a synical and typical hate oriented editorial! You dont mind having a job and working probablly with benefits and then suggest that people who have worked for up to 25 years and now find themselves unemployed and through no fault of their own! Do you really think Xin Lu that a person that was used to making $50,000 a year and may have as many as 4 children wants to make 1/5 of that or less?

Why can't you write an editorial about the politcal system that made unemployment in this country extremely necessary?? Do you know how overwelming and also, embarrassing it is to get a check from the government because of extenuating curcumstances such as age discrimination, being laid off because your company wants to make extreme profits by relocating to China, Mexico, or other overseas locations?

Why doesn't AOL employ me to write editorials that aren't slanted and "conservative only based"??

Xin Lu why dont you comment on those real situations and not trying to be part of the status Quo in conservatism starting with a political party that starts with the letter "R"??

No I am sure it is easy to Point the finger at a workforce that is out of their mind with grief~ By the way, usually people that believe as you do that unemployed people would be thrilled to accept money that they can "bearly" live on and in many ways "can not" live on are ones that would be thrilled themselves to live "off the system" in which you are suggesting!

In closing, why don't you investigate ways that people can become employed suggest companies that are highering, working outside of the country for employment, or maybe getting government loans to start a new viable business?
No I am sure that is too "difficult" and as usual you and the status Quo "Conservative party takes the easy way out and labels( or as you like to strongly suggest without coming out and saying it) the long term hard working citizen as a "lazy, free loader".
Thank you for that label and kick in the head as usual it only makes things worse
Xin Lu!!

Guest's picture
Guest

While my heart goes out to the people who are unemployed, and actively seeking employment\, However THERE ARE LOTS OF PEOPLE OUT THERE WHO SET OUT TO TAKE ADVANTAGE OF THE SYSTEM. A previous poster mentioned knowing a "friend of a friend" who is milking the system. Also, Guest #12 said: "To be honest I haven't been looking for a new position because to me the unemployment check over 1k every 2 weeks plus the time I spend with my 3 year old son is invaluable." According to him for his situation getting laid off was the best thing that could happen. For all the people who are doing that for whatever reason, as previous posters called you, you are LOOSERS.

Why should he be allowed to stay at home with his 3 year old COLLECTING UNEMPLOYMENT? There should be safeguards in place to ensure that people are not abusing it like:

1) Ask them to provide proof of rental payments (this will ensure that they have a motivation to get back to work - i.e. that they are not squatting with Mom & Dad who support them while they abuse the system.

2) Ask them to provide proof of insurance - If they didn't elect cobra, and are now covered by their spouses, (and are squatting with Mom & Dad), then they are very likely to be abusing the system.

3) Hire some of the unemployed to conduct random checks to ensure compliance with the "actively seeking employment" requirement. This will help lessen unemployment, and also by weeding out the person's who are not actively seeking employment will lower the unemployment numbers.

Identifying the LOOSERS from the persons who really need unemployment will free up benefits for those who really need it. Why should someone stay home to take care of their kid, when the other parents go to work or are desperately looking for one?

Xin Lu, thank you for a well written article and starting the discussion. An excellent follow up would be an article with well tought out solutions to identify the abusers of the system.

Guest's picture
Guest

I'm guessing that $2000 a month in California doesn't go very far considering the higher cost of living in California than in many other parts of the country. If it were Kentucky, for example, I'd agree with you wholeheartedly. You could live not just fairly, but pretty darn well on $2000 a month - at least, right now. That might not be true a couple of years from now. At any rate, $2000 a month does sound extravagant, but again, I'm sure the cost of living in California is much higher, so maybe it's not so much, after all.

Guest's picture
Guest

The entire premise is moronic. Firstly, the 450 weekly payment (in my state at least) is the maximum and requires 11,500 in quarterly income to qualify for. You have a serious blind spot if you think anyone would prefer doing nothing and receiving 12/hour which equals half the salary they have built their lifestyle around, to the dignity of working everyday (being unemployed doesn't make you feel very good about yourself) earning twice that. Anyone who's income was low enough to view 12/hr as "generous" would not qualify for that level of benefits. A minimum wage earner would only qualify for HALF of that, a "generous" 13,000/year in benefits. They're starving. Get your facts straight.

Guest's picture
Chris Baker

i Know many people who would rather just chill and collect

Guest's picture
Angry and Frustrated Employer

As a home care agency owner in California, unemployment benefits may be the final blow to our already struggling business. It used to be understood that when you are working for the our clients, the job is not permanent. The average age of our clients is 85...our workers lose their clients to death, higher levels of care and dissatisfaction with the worker. It is really not in our control how long each case will last. It used to be much harder for them to collect unemployment as it is clearly understood that the nature of our business is temporary. NOW they can work for us for one case, the client passes away, we offer a new case and they can flat out refuse the case and they STILL get unemployment. We have spent much time and money appealing cases but have just given up because the EDD in California is hell-bent to grant unemployment to anyone who asks for it. In 2010 our rates went from 3.2 to 6.4 percent of payroll AND in 2012 instead of paying that on the first $7,000 of each person's pay they will increase it to the first $15,000. The company has to pay that, so here is the net effect:
1. The current caregivers that continue to work for the company will not be receiving raises, AGAIN.
2. The company will cut into its net profits again for the 4th year in a row.
3. There will be the real possibility that the company cannot continue to operate and all of the workers will be unemployed.
Small business owners are hanging on by a thread...our take home is only 15% if we are extremely frugal and cut expenses at every turn. These workers either don't realize that by fraudulently collecting benefits they are creating a bigger problem, or maybe it is that they just don't care.
The worst part of it is that many of these workers, in home care at least are able to collect unemployment AND work under the table with as little effort as putting an ad on Craigslist...I have seen former workers on there and it makes my blood boil...not only am I paying their unemployment but they are taking potential clients right out of our hands.
I have spent 8 years building this company and the unemployment benefit may be the end of it.

Guest's picture
Angry and Frustrated Employer

I would also like to add that at least in California Unemployment Insurance is paid for SOLELY by the EMPLOYER!!!! This is not an entitlement benefit. If the employer ends up going out of business the burden then transfers to the employers left in the state that are continuing to pay unemployment. NOTHING ever is taken out of the employee's pocket.

Guest's picture
Vince

Very interesting article - My company exclusively represents Claimants at Unemployment Hearings and Appeals. I hear both sides - those who complain that they cannot find work and those who clearly want to not work and collect UC Benefits.

One thing that most people miss is that Unemployment is an insurance policy - just like your car insurance. You pay your premiums which are taken as a deduction from your paycheck - the employer also pay a portion of those premiums

It is not welfare, not even close

Keep up the articles please!

Vince
UCHelpCenter.com

Guest's picture
Guest

No I don't your calculating on a family who do not work. I have just been made redundant I have a house a partner who works I am entitled to £67 a week will not eve cover the groceries!