Thursday, March 11, 2010

Unemployment Insurance: Social Program?

"...Millions of Americans have been forced to rely on unemployment payments for extended periods as the nation struggles through its longest period of high joblessness in a generation, and critics are taking aim, saying that the Depression-era program created as a temporary bridge for laid-off workers is turning into an expensive entitlement.

About 11.4 million out-of-work people now collect unemployment compensation, at a cost of $10 billion a month. Half of them have been receiving payments for more than six months, the usual insurance limit. But under multiple extensions enacted by the federal government in response to the downturn, workers can collect the payments for as long as 99 weeks in states with the highest unemployment rates -- the longest period since the program's inception..." (source)

Maybe I am unclear on how UI actually works, but is this actually an entitlement or is it draining money now because it's run by the government and is mismanaged?

Reagan once said that "Unemployment insurance is a pre-paid vacation for freeloaders," but I wonder if he knew the maximum you can get is $500. You could make $3000 a week at your job, get laid off and only get $500 in UI...who would willingly choose that?

Take The Man, he's been working full time for 23 years. That means an employer has been paying into the program based on his wages for 2 decades and he'd never filed for if he needs it, it should be paid for and then some after investing 23 years worth of revenue made on him...right? Or is that nullified by the amount of people that abuse the system? Or do I misunderstand how it works?

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