4 ms·

I come from a family of 4 that had a combined gross income of about $45k, if that. We never had Government assistance. I saw my Father struggling at times, but

I come from a family of 4 that had a combined gross income of about $45k, if that. We never had Government assistance. I saw my Father struggling at times, but it worked out great. He made it happen. When I left the "comfort" ($26k/yr) of the military, I went from being in what was considered by the Navy as a "Highly advanced electronics technical field" to being unemployed. That was scary. I couldn't find a job. I was eligible for unemployment benefits for up to 24 months!!! I netted $800 every 2 weeks. I quickly got a job as an Office Manager for a business my Father worked for making $17/hr which was a very high wage for the area. A friend of mine boasted at the time about how his Father was now making $23/hr with 20 years in a certain company (for relation purposes). My weekly take home was about $100 more than unemployment. Essentially, at that point I worked my ass off for $100 a week, at what was considered a fairly high wage. There are less than 50 jobs in the area that pay $20 or above, and individuals sitting on their ass are getting paid $17/hr. There is no motivation to get a job. That is a problem that adds to the deficit, and needs to be fixed!

techsupporter 12y ago
Unemployment is not welfare, it is insurance. Your employer, including the military, pays into a pool. People who lose their jobs are entitled to draw from that pool. As you realized, the payments from that pool end after a certain period of time. Finally, benefits and that length of time vary wildly by state. For example, Texas unemployment insurance pays a maximum of $465 per week for a maximum of 52 weeks. The "motivation to get a job" is that benefits will end after a certain time and that time is almost never able to be extended. After unemployment benefits end, you are at the mercy of whatever local social services exist for you. In virtually all cases, as a result of the 1996 Welfare Reform Act, if you are not totally disabled you must be doing something defined as "work," be it looking for work, going to school, or volunteering at an assigned location. That only lasts for so long, provided you are not disabled. At some point, usually between 6 and 9 months, benefits for people who are looking for work and who don't qualify for unemployment end. Then there is what is known as the benefits cliff. Almost all benefit programs have a bright line limit between "qualified" and "not qualified." It is some multiple of the federal poverty line based on household size. If a person or household earns even $1 more than that line, benefits are stopped on that date, even if that is a net loss for the person. A common example: A single parent can receive a $400 child care subsidy provided total household income is less than $19,000 per year. The parent makes $18,500 per year ($9.25/hour) and can pay for rent, food, and transportation out of the rest, but the child care subsidy is a definite need. If the parent works full time and receives a raise of $0.25 per hour, or $500 per year, the child care benefit is immediately forfeit, resulting in a new net expense of $4,300 to the parent. What incentive is there to then take the raise and for the parent to work to improve?
- riffraff 12y ago
  > Unemployment is not welfare, it is insurance. isn't that true of all welfare programs (i.e. healthcare, pension, disability)? (I might be struggling among a cultural gap between US and europe)
  - techsupporter 12y ago
    In the United States, it's not the same. Social welfare programs here are paid out of general budget allocations. This is for things like food stamps, disability payments (one exception, dealt with in a moment), housing assistance, Medicaid, and similar. Unemployment payouts, Social Security ("Old age pension"), Social Security Disability, and Medicare are paid for through dedicated taxes and charges on employers (in the case of unemployment). That's why we usually call them insurance or entitlements. Social Security Disability Insurance, or SSDI, is paid as part of Social Security itself.
    - zo1 12y ago
      "Unemployment payouts, Social Security ("Old age pension"), Social Security Disability, and Medicare are paid for through dedicated taxes and charges on employers (in the case of unemployment). That's why we usually call them insurance or entitlements. Social Security Disability Insurance, or SSDI, is paid as part of Social Security itself." And are you able to choose not to pay into such a scheme? If not, then it might as well be a plain tax that happens to be labelled as separate.
    - TheCoelacanth 12y ago
      I would distinguish insurance vs. welfare by whether you can collect them without having paid into them first. That would make Social Security, SSDI and unemployment insurance programs while food stamps, Medicare and Medicaid are welfare programs. Whether they are paid with a special tax or from the general fund is orthogonal to whether they are insurance or welfare.
  - landryraccoon 12y ago
    In the US, you are only eligible for unemployment if you had a job for a prolonged period before collecting it. Thus people who are permanently not working are not eligible for unemployment. A student, for example, who has just graduated and never held a job CANNOT receive unemployment. It is intended to be a temporary benefit to compensate for losing a job so you can survive until you find your next job. Furthermore, generally your unemployment payments are proportional to the income you received from your job - the more highly paid your job was, the higher the unemployment payment (since the unemployment insurance tax would also have been proportionally higher). Welfare is different. Welfare is considered an entitlement - you do not ever have to work to receive it. Americans justify unemployment insurance as "not being lazy" because the people who receive it had at some point held a job.
AndrewDucker 12y ago
This is one reason I approve of Basic Income - rather than withdrawing all benefits when someone gets a job, the earnings come _on top of_ the basic income, albeit with higher taxes. This effectively gives you a taper rate on the benefits of, say, 40%. Rather than the 100% cliff we currently have.
mrxd 12y ago
> individuals sitting on their ass are getting paid $17/hr. There is no motivation to get a job. The legal maximum is around 60% of your average weekly wage over the last year you worked. Whatever someone is getting in unemployment, they were making 66% more at their last job. That seems like enough motivation. I suspect your numbers are skewed because you didn't subtract federal taxes from your unemployment check or add SS and Medicare to your wages. Once you take that into account, the difference is more like $210.
- soylentcola 12y ago
  Yep. I had to draw unemployment years ago. It sucked. I was young and relatively inexperienced and my employer had to lay off a bunch of us. The area I was living in at the time was very affordable but only because there were very few jobs and the local economy was terrible. While barely enough to cover rent and expenses in the meantime (along with help from a very generous friend who let me couch-surf temporarily) I somehow managed to move out of the area and drag my dying car to a different town where prospects were a bit better. Eventually was able to put myself back into college and work my way into a more productive career in a larger city. If not for unemployment insurance I would have been stuck in that original crap town with no reliable transportation, no real prospects, and no real way out. It sucked living on such a massive pay cut when I needed to be making even more than usual to fund the relocation and continued education but it was the only thing that made it possible. On some level I think that experience is what made me more supportive of similar social programs because even with their inefficiencies and some percentage of people who may abuse them, for most people, they can be the only thing that even gives them a chance at working their way back to productivity.
  - zo1 12y ago
    Would you say that now that you've had that "experience" you're more aware of what can go wrong? i.e. You lose your job and suddenly there is not enough money for basics, etc. Following from that... What would your take-home lesson (and subsequent action) be from that experience if there were no social programs? Assume for the sake of argument that the system of government in place would not allow them to exist at all. Sorry if the tone is a little condescending, it's not intended as such.

techsupporter 12y ago

Unemployment is not welfare, it is insurance. Your employer, including the military, pays into a pool. People who lose their jobs are entitled to draw from that pool. As you realized, the payments from that pool end after a certain period of time. Finally, benefits and that length of time vary wildly by state. For example, Texas unemployment insurance pays a maximum of $465 per week for a maximum of 52 weeks. The "motivation to get a job" is that benefits will end after a certain time and that time is almost never able to be extended. After unemployment benefits end, you are at the mercy of whatever local social services exist for you. In virtually all cases, as a result of the 1996 Welfare Reform Act, if you are not totally disabled you must be doing something defined as "work," be it looking for work, going to school, or volunteering at an assigned location. That only lasts for so long, provided you are not disabled. At some point, usually between 6 and 9 months, benefits for people who are looking for work and who don't qualify for unemployment end. Then there is what is known as the benefits cliff. Almost all benefit programs have a bright line limit between "qualified" and "not qualified." It is some multiple of the federal poverty line based on household size. If a person or household earns even $1 more than that line, benefits are stopped on that date, even if that is a net loss for the person. A common example: A single parent can receive a $400 child care subsidy provided total household income is less than $19,000 per year. The parent makes $18,500 per year ($9.25/hour) and can pay for rent, food, and transportation out of the rest, but the child care subsidy is a definite need. If the parent works full time and receives a raise of $0.25 per hour, or $500 per year, the child care benefit is immediately forfeit, resulting in a new net expense of $4,300 to the parent. What incentive is there to then take the raise and for the parent to work to improve?

riffraff 12y ago
> Unemployment is not welfare, it is insurance. isn't that true of all welfare programs (i.e. healthcare, pension, disability)? (I might be struggling among a cultural gap between US and europe)
- techsupporter 12y ago
  In the United States, it's not the same. Social welfare programs here are paid out of general budget allocations. This is for things like food stamps, disability payments (one exception, dealt with in a moment), housing assistance, Medicaid, and similar. Unemployment payouts, Social Security ("Old age pension"), Social Security Disability, and Medicare are paid for through dedicated taxes and charges on employers (in the case of unemployment). That's why we usually call them insurance or entitlements. Social Security Disability Insurance, or SSDI, is paid as part of Social Security itself.
  - zo1 12y ago
    "Unemployment payouts, Social Security ("Old age pension"), Social Security Disability, and Medicare are paid for through dedicated taxes and charges on employers (in the case of unemployment). That's why we usually call them insurance or entitlements. Social Security Disability Insurance, or SSDI, is paid as part of Social Security itself." And are you able to choose not to pay into such a scheme? If not, then it might as well be a plain tax that happens to be labelled as separate.
  - TheCoelacanth 12y ago
    I would distinguish insurance vs. welfare by whether you can collect them without having paid into them first. That would make Social Security, SSDI and unemployment insurance programs while food stamps, Medicare and Medicaid are welfare programs. Whether they are paid with a special tax or from the general fund is orthogonal to whether they are insurance or welfare.
- landryraccoon 12y ago
  In the US, you are only eligible for unemployment if you had a job for a prolonged period before collecting it. Thus people who are permanently not working are not eligible for unemployment. A student, for example, who has just graduated and never held a job CANNOT receive unemployment. It is intended to be a temporary benefit to compensate for losing a job so you can survive until you find your next job. Furthermore, generally your unemployment payments are proportional to the income you received from your job - the more highly paid your job was, the higher the unemployment payment (since the unemployment insurance tax would also have been proportionally higher). Welfare is different. Welfare is considered an entitlement - you do not ever have to work to receive it. Americans justify unemployment insurance as "not being lazy" because the people who receive it had at some point held a job.

AndrewDucker 12y ago

This is one reason I approve of Basic Income - rather than withdrawing all benefits when someone gets a job, the earnings come _on top of_ the basic income, albeit with higher taxes. This effectively gives you a taper rate on the benefits of, say, 40%. Rather than the 100% cliff we currently have.

mrxd 12y ago

> individuals sitting on their ass are getting paid $17/hr. There is no motivation to get a job. The legal maximum is around 60% of your average weekly wage over the last year you worked. Whatever someone is getting in unemployment, they were making 66% more at their last job. That seems like enough motivation. I suspect your numbers are skewed because you didn't subtract federal taxes from your unemployment check or add SS and Medicare to your wages. Once you take that into account, the difference is more like $210.

soylentcola 12y ago
Yep. I had to draw unemployment years ago. It sucked. I was young and relatively inexperienced and my employer had to lay off a bunch of us. The area I was living in at the time was very affordable but only because there were very few jobs and the local economy was terrible. While barely enough to cover rent and expenses in the meantime (along with help from a very generous friend who let me couch-surf temporarily) I somehow managed to move out of the area and drag my dying car to a different town where prospects were a bit better. Eventually was able to put myself back into college and work my way into a more productive career in a larger city. If not for unemployment insurance I would have been stuck in that original crap town with no reliable transportation, no real prospects, and no real way out. It sucked living on such a massive pay cut when I needed to be making even more than usual to fund the relocation and continued education but it was the only thing that made it possible. On some level I think that experience is what made me more supportive of similar social programs because even with their inefficiencies and some percentage of people who may abuse them, for most people, they can be the only thing that even gives them a chance at working their way back to productivity.
- zo1 12y ago
  Would you say that now that you've had that "experience" you're more aware of what can go wrong? i.e. You lose your job and suddenly there is not enough money for basics, etc. Following from that... What would your take-home lesson (and subsequent action) be from that experience if there were no social programs? Assume for the sake of argument that the system of government in place would not allow them to exist at all. Sorry if the tone is a little condescending, it's not intended as such.