sherrillee

Unemployment Insurance: The Ugly Truth and The Ugly Abuse

The Ugly Truth

Lets put the myth to rest. You do not pay anything into unemployment insurance. Your employer is the only one taxed for unemployment insurance. Before you all go whipping out your pay stubs and point to the SUI/SDI Tax line. Let me explain. The amount that is deducted from the SUI/SDI Tax line on your pay stub is only for disability insurance, nothing for unemployment insurance.

Additionally, if you check your EDD website, it clearly states that, UI is paid by the employer and SDI is a deduction from employees wages.

Now on to the next topic.

The Ugly Abuse

Unfortunately, I know a lot of people who have been laid off. Its a bad time economically and there is no way to know if I will be joining their ranks. I have learned enough so far in life to never, say never. And let me preface this to say that I have no problem with the UI program when it is used as it was intended to be used, to bridge the gap until another job is found. What bothers me, is abuse of the unemployment insurance program. If someone is on UI, there is only one thing they should be doing, looking for a job.

So what's the big deal? The big deal is, that is not what a considerable amount of people do with their paid vacation. There's a considerable amount of people out there who are riding it out until the last check comes in, without making any productive use of their time. There are only a handful of times in your life, after you are 18 years old when you do not have to work because someone else (like your parents) is footing your expenses. The least you could do is be intelligent about it and use the time wisely, by looking for a job. The sad truth is, that if the people out there that are abusing the system were stopped, the benefits could be better for those who are using the system appropriately. Or, providing better benefits for those who are unemployed(and looking for a job) with children.

So based on the The Ugly Truth, we know that any individual abusing the system did not pay anything into it, so they are not getting their money back which is often their claim. Second, that maximum amount that your employer pays into the system, per employee, for the entire year, is around $245 to a maximum of $434. So as soon as that average someone collecting unemployment takes their first months worth of UI payments, they have already gotten back at least four years worth of their employers contributions. If that average someone takes just one years worth of payments, they have pretty much used their entire working lifetime of employer contributions.

So how long can we be abused? Pretty long, actually. A regular UI claim is 26 weeks. The first federal extension adds an additional 20 weeks. The second federal extension adds 13 more weeks. Subsequently some states extended those benefits another 20 weeks. That is a total of 79 weeks. So assuming the state legislature does not add even more weeks of coverage (which they are likely to do), it is possible for someone to abuse the system for 1.5 years. A 1.5 year vacation! And you have got to be kidding yourself to think that the idea of taking almost 2 years off of work is not so enticing to people that they aren't abusing the shit out of this program. I guarantee that abuse is widespread.

I know of a few people on this site alone, who are crowing about how they have no intention of looking for work, they plan on enjoying the Holidays on unemployment benefits. I find it immensely ironic that these very same people have denounced on this site, those who are on welfare or in entitlement programs, yet seem to think that their vacation does not qualify as welfare or entitlement.

So how much is this costing us? For example, anyone making anything over $46,700 a year will qualify for the maximum benefit payout of $23,400 per year, or $1,950 per month ($450 per week) to a maximum of $36,000.

In my possibly hypothetical fraudster example, assume someone I may or may not know was laid off recently and is planning on spending the next 79 weeks sitting on their lazy asses taking a vacation, with plans to continue that until their benefits run out. And let us assume that they were making $15 per hour. They would receive about $300 per week or $1,300 per month. After 79 months, that would accumulate to a total of approximately $24,000. They would be saving on gas, clothing, and paying less in taxes. They would probably come pretty close to what they were netting while they were working.

So everyone abusing the UI system gets a free ride for shy of two years. And let us be honest, we know the market for jobs is bad, but a lot of people on UI are not really looking. And, there are a fair number of people out there that are getting cash jobs on Craigslist. And that $245 to $434 employers pay per person per year. That is not going to cover everybody, which means once again, working class tax payers are on the hook for bailing out anyone milking the free ride of unemployment benefits.

My hypothetical example fraudster who is really abusing the system for a free vacation will walk away with $24,000 in money paid for, by the still working U.S. taxpaying sucker. So while they claim that they are against entitlement programs and greedy materialism, they do not see the irony in rejoicing that by collecting unemployment they can now spend more time with their family enjoying the upcoming Holidays on the taxpayers dime instead of having to work everyday like the rest of us.

The problem with welfare programs such as UI (as it is currently administered) is the mentality it indoctrinates into those who choose to abuse it, that they can get something for nothing. The people abusing this welfare system do not understand that their vacation is being subsidized by everyone who is still working, it is not free. I do not know how they reconcile this ethical dilemma in their mind, but it is the growth of a welfare dependent class in society that supports further socialization of the government until eventually, everyone is looking for something for nothing from the government.

And like Margaret Thatcher so eloquently said, "The problem with socialism is that eventually you run out of other peoples money."

The hard workers in this country, those who still retain a shred of work ethic, will one day give up and join the ranks of the welfare state once they are overwhelmed by the demands (taxes) they are burdened with to support the more ethically challenged. Who will pay for the lazy and corrupt who abuse our welfare systems once the workers throw in the towel and concede defeat?

I do not want to hear that the government subsidizes big business to a great extent. Wrong is wrong, whatever the magnitude. $24,000 is real money to me. And when multiplied by hundreds of thousands, the number assumes enough magnitude to get anyones attention.