Jobs, jobs, jobs. With over 8 million jobs lost in the last couple of years, jobs are a big topic in the news, in bars, at the playground, on the senate floor, and at campaign podiums. Job seekers, job training, creating jobs and WTF to do about all the people who have lost jobs. In the latter category comes the sometimes heated discussion about unemployment benefits. As an article in the Christian Science Monitor, entitled Senate jobs bill: the perils of extended unemployment benefits, says:
The Depression-era program was originally intended as a temporary bridge to help the jobless until a recovery put them back to work – though nearly two-thirds of unemployed workers do not qualify. During a more normal downturn in the economy, states help people who have been laid off with jobless benefits lasting 26 weeks. But now, in some of the hardest-hit states, the long-term unemployed have been able to collect benefits for as long as 99 weeks – almost two years.
Some would argue that the long-term availability of unemployment insurance has turned it into something like welfare in the days before reform: open to abuse and not helpful in encouraging people to actually look for work. “Continuing to pay people unemployment compensation is a disincentive for them to seek new work,” said Republican Sen. John Kyl, of Arizona.
As someone collecting unemployment benefits I’d like to address some of the real disincentives to look for work or rather disincentives to take work, any work, or to enroll in courses to retool for a new career!
As another news article recounts, taking a part-time or temporary job while searching for a new full-time job can be deadly. Deadly, that is, to your unemployment benefits. Some job seekers have been taking on jobs they wouldn’t have contemplated a few years ago, just to make a little money, to put food on the table, or stay in their home, only to discover later that by doing so they have re-set the calculation of their unemployment benefits so that they are no longer eligible for any benefits at all once that job ends and they are unable to land another.
“What is going on for these workers is that because their most recent wages are much lower than the wages they earned in their prior fulltime job, they are facing substantial cuts in their weekly unemployment benefits,” says George Wentworth, a consultant at the National Employment Law Project (NELP) in New York.
In fact, so substantial that in one case the woman’s unemployment benefits went from $483 a week to nothing after she took a brief part-time job.
I’ve been counseled to take a job, any job, just to, well, to look good to employers. But will taking a job as someone who hands out samples at Cost-co really make me look good to employers in my field (environmental permitting)? Would I even put it on my resume? Umm, no, I wouldn’t. Would it help me to support my family? Not really. The pay would be minimal and after various taxes would probably be less than my unemployment benefit (which, based on my last quarter’s earnings is at the top of the scale – which is still paltry when you are supporting a family of 5). Plus I’d be paying for after school care or babysitting on top of that.
And if I take a job handing out samples at Cost-co, or accept the small amount that Salon.com has offered to pay me for article I wrote, I could be up the creek without a paddle if I haven’t landed that full-time job in my field within a year of being laid off. Because if I don’t have a new, good, job within that time, my unemployment benefits will be recalculated, based on my earnings in the last quarter and if that’s the Salon.com payment my benefits will zip, zero, nada. And I won’t be able to support my family on that! So while I was thrilled to secure my first ever paid writing job I won’t be invoicing Salon or filling in the w-9 to report the meager income to the IRS and the unemployment people. Salon can donate the money to a charity.
Another hindrance built into the system is the fact that you lose your unemployment benefits if you opt to take classes or retrain for a new career. The reasoning is – if you are in school you aren’t available to work and you have to be available to work to collect benefits. But without the unemployment check how are you going to pay tuition (and rent and food and gas…)? If they want you to get back in the workforce why don’t they pay you to take classes? Or let you take part-time jobs without penalizing you when those jobs end and you are once again unemployed?
Maybe the recession is over, maybe the recovery has started. But locally unemployment is still over 11% and there are 5 times as many job seekers as jobs. Obviously in order to get people off the unemployed rolls and back to work, you need JOBS, a lot more jobs, but in the meantime instead of stalling on approving unemployment benefit extensions and griping about how the unemployed are viewing those benefits as entitlements, why not remove the real disincentives to go back to work?