6 ms·

Is there any data backing up the idea that it actually is a disincentive? 1. Anyone I know that has received benefits for being unemployed desperately wants to

Is there any data backing up the idea that it actually is a disincentive? 1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again. 2. In the UK, unless things have changed, you can work up to 16 hours per week while receiving unemployment benefits and I believe the benefits you receive gradually falls with the amount of work you get paid for. 3. If you suddenly lose your job benefits aren't built so that you can maintain your current life style. You likely have car, insurance, and mortgage payments to make and the benefits you're receiving either just get you by or you have to renegotiate some of that debt. Not a situation you want to be in long-term.

stale2002 10y ago
I mean, if I was offered half of my current salary (which is, admittedly high, as a software engineer) for free under the condition that I don't work, I'd totally take that deal.
- iopq 10y ago
  And you can, if you get fired.
  - cmurf 10y ago
    Uhh I think to get unemployment you have to be laid off (fired through no fault of your own). I'm not sure how you think he's getting paid 1/2 his current salary if he's fired, that sounds like $0.
    - iopq 10y ago
      Not true. If you get fired for not attending your job, you don't get unemployment. If you get fired for performance reasons, you get unemployment. My father got fired for "insubordination" aka his manager not liking him. He still got unemployment.
  - cellis 10y ago
    Unemployment is not quite going to be half of parent salary. More like 1/5 to 1/3 if they're lucky.
    - iopq 10y ago
      It's up to half of your previous salary capped up to a certain amount. I actually don't know if my father got half of what he used to earn, but some people that worked for a long time before getting fired or laid off do get half.
  - pjc50 10y ago
    Unemployment benefit would be less than 1/10 my salary in the UK. And housing benefit won't pay mortgages.
iopq 10y ago
> 1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again. My father makes so much money that when he's unemployed he actually doesn't really look for a job that urgently. This is because his unemployment benefits are enough for him to pay the bills. He'd like to make money to retire... but he does rest for a few months in between jobs.
- k-mcgrady 10y ago
  >> My father makes so much money that when he's unemployed he actually doesn't really look for a job that urgently I doubt this is a typical situation of someone on unemployment benefits.
  - deleted 10y ago
    [deleted]
a_humean 10y ago
Under the present system in the UK it really doesn't make much sense to work <=16 hour at around the lower wages. I know this from personal experience when I was unemployed (graduated uni at the worst possible time during the recession) and was offered a low paying job that was only 16 hours. I had to turn it down because it would mean I would have less money once I factored in travel costs because the benefits got withdrawn at a 1:1 ratio (in some cases it got withdrawn faster than my earned income grew), and I was barely getting by as it was. I was unemployed for another 3 months (6 in total) before I got near full-time hours offered to me. I was miserable for the entirety of my unemployment - there is nothing cushy about it. This bug/feature in the welfare system is actually a major motivation behind the UK government's long beleaguered universal credit system, which is meant to support this kind of part-time work. The idea being that a worker should never ever be penalised by the benefits system for working, but should always earn significantly more in work than out of work and working more hours should always result in a net increase in income. They are trying to do this by unifying almost all benefits (unemployment, disability, housing, child benefits, etc...) under a single administrative umbrella, and then only reduce the net benefit by £0.66 for each £1 earned through work. Its been delayed significantly because it requires a major IT overhaul, and that project has so far been a £1-2 billion black-hole of incompetence by a series of IT consultancies that have all failed to deliver the system needed to merge all these complicated means tested processes together.
bmj 10y ago
1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again. How wide is your social network (by this I mean people you actually know and see)? How diverse is it? My experience, living in the Rust Belt in the US, just north of Appalachia, is that many people are more than happy to live on the dole for as long as possible. I chalk some of this up to laziness, and some of it up to the lack of reasonable work. 3. If you suddenly lose your job benefits aren't built so that you can maintain your current life style. You likely have car, insurance, and mortgage payments to make and the benefits you're receiving either just get you by or you have to renegotiate some of that debt. Not a situation you want to be in long-term. Again, my sense is that your observations are true for some given demographic, but are probably not entirely accurate for people who are truly living at or near the poverty line. Those people may have been working, even steadily, but they probably didn't have a home, and may not have even owned a car. You are right, of course, that if I lost my job (as a software developer), I'd be okay for three to four months without benefits, but it would be hard to maintain a home and a vehicle after that. That likely goes for many on HN. But we generally aren't the demographic best served by unemployment benefits.
ScottBurson 10y ago
> Anyone I know that has received benefits for being unemployed desperately wants to be employed again. All the more reason not to discourage them by having them come out financially worse for doing so.
thenomad 10y ago
In the UK I have known multiple people who were unable to take jobs that would have brought them out of unemployment, because of precisely this trap. Can't recall the specifics but they were not stupid people and I believe they'd done the math correctly.
haar 10y ago
Unfortunately it's quite common due to the layered nature of unemployment benefits in the UK to be far better off on benefits than to go into work. I know several people who work the bare minimum to qualify for all their benefits then proceed to claim them for as long as possible. One example being if you have several children, working can easily reduce your child-tax credits by an amount greater than your employment income. The counter-argument of course is that you shouldn't have children if you can't afford to raise them, but the disincentives are there, and as crazy as it sounds people are incentivised to have a lot of children as a method of escaping work. (Optional sad Futurama parody being: https://en.wikipedia.org/wiki/The_Cyber_House_Rules https://en.wikipedia.org/wiki/The_Cyber_House_Rules) It should never be more beneficial for someone to sit at home than to go out and earn a living.
- chillingeffect 10y ago
  my poor cousin got his disability slashed when he tried to work part time as a cashier just to get off his ass and be part of society. For many (bit not all), working at something is preferable bc it helps them feel responsible and social and to have a purpose. Just because he was half-blind, he didn't want to be stuck on the sidelines.
  - haar 10y ago
    Oh, for sure. I think that is one of the most frustrating things about it. Those who receive e.g. disability benefits but _want_ to contribute are penalised for their efforts whilst simultaneously they can see those who don't contribute and simply play the system.

stale2002 10y ago

I mean, if I was offered half of my current salary (which is, admittedly high, as a software engineer) for free under the condition that I don't work, I'd totally take that deal.

iopq 10y ago
And you can, if you get fired.
- cmurf 10y ago
  Uhh I think to get unemployment you have to be laid off (fired through no fault of your own). I'm not sure how you think he's getting paid 1/2 his current salary if he's fired, that sounds like $0.
  - iopq 10y ago
    Not true. If you get fired for not attending your job, you don't get unemployment. If you get fired for performance reasons, you get unemployment. My father got fired for "insubordination" aka his manager not liking him. He still got unemployment.
- cellis 10y ago
  Unemployment is not quite going to be half of parent salary. More like 1/5 to 1/3 if they're lucky.
  - iopq 10y ago
    It's up to half of your previous salary capped up to a certain amount. I actually don't know if my father got half of what he used to earn, but some people that worked for a long time before getting fired or laid off do get half.
- pjc50 10y ago
  Unemployment benefit would be less than 1/10 my salary in the UK. And housing benefit won't pay mortgages.

iopq 10y ago

> 1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again. My father makes so much money that when he's unemployed he actually doesn't really look for a job that urgently. This is because his unemployment benefits are enough for him to pay the bills. He'd like to make money to retire... but he does rest for a few months in between jobs.

k-mcgrady 10y ago
>> My father makes so much money that when he's unemployed he actually doesn't really look for a job that urgently I doubt this is a typical situation of someone on unemployment benefits.
- deleted 10y ago
  [deleted]

a_humean 10y ago

Under the present system in the UK it really doesn't make much sense to work <=16 hour at around the lower wages. I know this from personal experience when I was unemployed (graduated uni at the worst possible time during the recession) and was offered a low paying job that was only 16 hours. I had to turn it down because it would mean I would have less money once I factored in travel costs because the benefits got withdrawn at a 1:1 ratio (in some cases it got withdrawn faster than my earned income grew), and I was barely getting by as it was. I was unemployed for another 3 months (6 in total) before I got near full-time hours offered to me. I was miserable for the entirety of my unemployment - there is nothing cushy about it. This bug/feature in the welfare system is actually a major motivation behind the UK government's long beleaguered universal credit system, which is meant to support this kind of part-time work. The idea being that a worker should never ever be penalised by the benefits system for working, but should always earn significantly more in work than out of work and working more hours should always result in a net increase in income. They are trying to do this by unifying almost all benefits (unemployment, disability, housing, child benefits, etc...) under a single administrative umbrella, and then only reduce the net benefit by £0.66 for each £1 earned through work. Its been delayed significantly because it requires a major IT overhaul, and that project has so far been a £1-2 billion black-hole of incompetence by a series of IT consultancies that have all failed to deliver the system needed to merge all these complicated means tested processes together.

bmj 10y ago

1. Anyone I know that has received benefits for being unemployed desperately wants to be employed again. How wide is your social network (by this I mean people you actually know and see)? How diverse is it? My experience, living in the Rust Belt in the US, just north of Appalachia, is that many people are more than happy to live on the dole for as long as possible. I chalk some of this up to laziness, and some of it up to the lack of reasonable work. 3. If you suddenly lose your job benefits aren't built so that you can maintain your current life style. You likely have car, insurance, and mortgage payments to make and the benefits you're receiving either just get you by or you have to renegotiate some of that debt. Not a situation you want to be in long-term. Again, my sense is that your observations are true for some given demographic, but are probably not entirely accurate for people who are truly living at or near the poverty line. Those people may have been working, even steadily, but they probably didn't have a home, and may not have even owned a car. You are right, of course, that if I lost my job (as a software developer), I'd be okay for three to four months without benefits, but it would be hard to maintain a home and a vehicle after that. That likely goes for many on HN. But we generally aren't the demographic best served by unemployment benefits.

ScottBurson 10y ago

> Anyone I know that has received benefits for being unemployed desperately wants to be employed again. All the more reason not to discourage them by having them come out financially worse for doing so.

thenomad 10y ago

In the UK I have known multiple people who were unable to take jobs that would have brought them out of unemployment, because of precisely this trap. Can't recall the specifics but they were not stupid people and I believe they'd done the math correctly.

haar 10y ago

Unfortunately it's quite common due to the layered nature of unemployment benefits in the UK to be far better off on benefits than to go into work. I know several people who work the bare minimum to qualify for all their benefits then proceed to claim them for as long as possible. One example being if you have several children, working can easily reduce your child-tax credits by an amount greater than your employment income. The counter-argument of course is that you shouldn't have children if you can't afford to raise them, but the disincentives are there, and as crazy as it sounds people are incentivised to have a lot of children as a method of escaping work. (Optional sad Futurama parody being: https://en.wikipedia.org/wiki/The_Cyber_House_Rules https://en.wikipedia.org/wiki/The_Cyber_House_Rules) It should never be more beneficial for someone to sit at home than to go out and earn a living.

chillingeffect 10y ago
my poor cousin got his disability slashed when he tried to work part time as a cashier just to get off his ass and be part of society. For many (bit not all), working at something is preferable bc it helps them feel responsible and social and to have a purpose. Just because he was half-blind, he didn't want to be stuck on the sidelines.
- haar 10y ago
  Oh, for sure. I think that is one of the most frustrating things about it. Those who receive e.g. disability benefits but _want_ to contribute are penalised for their efforts whilst simultaneously they can see those who don't contribute and simply play the system.