The Irony

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?

This entry was posted in job search, recession, unemployment and tagged , , . Bookmark the permalink.

10 Responses to The Irony

  1. bitchphd says:

    I like this piece. The thing that always worries me about talking honestly about these kinds of disincentives is that it’s too easy for people to assume that disincentives “let people take advantage of the system”–as if it would be better to have “deserving” people end up on the street than to risk “undeserving” people “getting away” with something. (Let alone the gaping black hole of assuming that there is such a thing as “undeserving people” or that one can somehow magically decide who is and isn’t “deserving”).

    Putting that aside, though, it’s really a problem that so many programs–precisely *because* we want to make sure that the “undeserving” can’t “take advantage”–have rules that basically mean that people can’t do things that would marginally improve their situations. Like the rule that used to exist (and I think still does) that single parents collecting AFDC can’t have a live-in partner. God forbid that single moms might have another adult around who could contribute a few bucks and maybe watch the kids once in a while so mom can buy groceries or see a doctor or have a job interview. Much better to have a rule that forces people to lie and/or live alone so that they can keep getting the check that helps them buy shoes for their kids, lest someone “take advantage” by having a tiny bit of freaking help.

    Sorry about the rant. I could go on, but my own kid is hassling me to help him with yet another project….

  2. Karen says:

    Actually, according to economists, extending unemployment benefits beyond the normal 26 weeks doesn’t encourage people to stay on unemployment into perpetuity (here in North Carolina unemployment benefits have been extended out to 99 weeks since we have the 9th highest unemployment rate in the country). Here is a link to an economics professor who is at the University of Oregon that speaks to that:

    http://economistsview.typepad.com/

  3. Lee Redd says:

    This shows the personal side of a messed up system. Obviously, folks who don’t want to work shouldn’t be rewarded, but true incentives should be in place. By the way, Anonymous and Brandon, I can understand why you might make some of your comments. There are folks out there who are trying to milk the system, who don’t want to work. THAT IS NOT THE CASE HERE AT ALL! I know this lady and she is not anything like you think. This was the “perfect storm” situation; she was in the position many of us are: challenging and fulfulling, good-paying job, retirement savings, “benefits”, a plan for the future, nice house which she could easily afford, raising four children well. She is not at all trying to live off the government; she is doing her best to make her way, take care of her children, be a productive member of society. Sometimes, life just isn’t fair!

  4. Brandon says:

    If there were no repeated extensions of unemployment benefits, the “real” disincentive you talked about would not exist. I wonder who is paying for these extensions. I know that employers pay into an “unemployment insurance” fund to pay for parts of unemployment, but I can’t imagine that the “extras” that have been added are properly funded.

    Despite what you think, you do not deserve unemployment perpetually until you find another job in your oh so special career field. The idea is not for that but rather as a stop-gap measure for a time you are looking for a new job. If you can’t find one in your field in 26 weeks, you should look elsewhere.

    Pay you to take classes? There are tons of other programs for that! (Pell grants for example)

    Get on real welfare if you want to live off the government perpetually.

    • I’m not turning down work. And applying for jobs beneath one’s skill level doesn’t always work either. Just today I heard back from a company I interviewed with for a lower level job. They said they liked me, that I had more experience than most of their staff but that they felt at the salary they were offering they had to hire a less experienced person. Their senior staff felt it wouldn’t be right to pay someone with 25+ years experience and a MA the lower wage.

  5. sam says:

    Good article.
    I’ve been in the same bind (on a smaller scale then you) and it was horrible/stressful/frustrating.

    While I do grumble about taxes, I have no problem paying taxes for unemployment so my neighbor can get by until they land a new job – I think part of the problem is the media shows the people who have no ambition to work but to only get “free money” …never mind that unemployment is something where you have to pay in to get anything out of it.
    And in the case of many single parents, you have to land a job that pays enough that it covers childcare & the bills- childcare is one pf the reasons I don’t work more hours then I do and one of the reasons I back pedaled my career for the 9-5 job I’m in now.
    What a world we live in!

  6. Gappy says:

    The British benefits system (although perhaps a little more generous than the American one) is still full of disincentives to work aswell. A lot of mothers – especially those with large families – are simply better off not working and staying on benefits. Who can judge them for doing so?!

    Our income support is being slowly scrapped in favour of putting single mothers on a ‘job seekers allowance’ which is much less money. But there are hardly any part time jobs which fit around school hours, and the cost of child care is phenomenal. All the reforms will do is catapult yet more families into poverty. They won’t help people find work. I despair to be honest.

  7. Anonymous says:

    On the other hand, if you had a job, you might have some self-respect and set a good example for your children

    • Sheila says:

      Please find another blog to insult. Obviously signing yourself ” Anonymous” means you haven’t enough self respect yourself to use your “Good” name. What part about searching for a job with benefits that will cover kids and daycare did you miss!?

  8. Sheila says:

    Thank you for the information. I wasn’t aware of the “Penalty” for working. This is not helping anything. Boy , I can see how you get frustrated with the whole “System.”

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