Author Topic: 99 weeks of unemployment benefits  (Read 5025 times)

JavaMouse

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99 weeks of unemployment benefits
« on: January 27, 2011, 12:10:16 PM »
Cranky old man Philip Greenspun is now bitching about the current length of unemployment benefits:
http://blogs.law.harvard.edu/philg/2011/01/26/rethinking-99-weeks-of-unemployment/
I wonder if Greenspun has ever been unemployed?

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The standard 26 weeks of unemployment makes sense to me. People paid for the insurance with wage deductions and it might take 26 weeks to move to a new city or state, work one’s network of friends and relatives, etc. But the subsequent 1.5 years don’t make sense to me given what a human ought to be able to learn in that period of time.

Reading the entire post, I'd almost swear he just wrote it to generate a lot of traffic.  His suggestions comes off as completely stupid, or else satire.  For example:

Quote
for people who live in states with an unemployment rate higher than average... offer a lump sum at the end of 12 weeks to assist the person in moving to a state with a lower-than-average rate

I'm sure that will work for a ton of people! Geez I'm surprised one of his bullet points wasn't to give people a gun so they could shoot themselves if they weren't employed after 26 weeks.

FWIW here's the Hacker News reaction:
http://news.ycombinator.com/item?id=2147843

JavaMouse

TRexx

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Re: 99 weeks of unemployment benefits
« Reply #1 on: January 27, 2011, 12:31:14 PM »

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for people who live in states with an unemployment rate higher than average... offer a lump sum at the end of 12 weeks to assist the person in moving to a state with a lower-than-average rate


IBM actually tried that. Sort of.  But they were offering to help surplus employees relocate to India.

Peter Gibbons

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Re: 99 weeks of unemployment benefits
« Reply #2 on: January 27, 2011, 12:38:35 PM »
JavaMouse,

If (God forbid) you lost your job tomorrow and were offered two options:

1. One year lump sum of UI benefits, that you keep even if you found new work within a month.

2. Up to two years monthly UI payments.

Which one would you take?

Richardk

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Re: 99 weeks of unemployment benefits
« Reply #3 on: January 27, 2011, 12:41:30 PM »
He's totally clueless.

No one plans on being unemployed for 99+ weeks. Plus if you like your job then why would you retrain or move? You would think that someone else would pick you up or that things would improve and you'd be back to work.

That's just as dumb as someone saying that to us. If we KNEW that the jobs were never coming back after the dot com bust, do you think that any of us would be here today?

It wasn't a foreseeable situation that you could plan for. Just like the recession or even the housing bubble. Well, the housing bubble you could see coming. If you didn't read the loan or wonder why your house was being appraised at 150% above market value then what were you thinking?

The job situation is more like having the rug pulled out from under you or a Houdini trick of now you see your job and now you don't.

Peter Gibbons

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Re: 99 weeks of unemployment benefits
« Reply #4 on: January 27, 2011, 12:54:56 PM »
Richard,

I just glanced at the Greenspun's post.

The only thing that caught my attention was the lump sum payment of UI.

He had some conditions about state with high unemployment, 12 weeks and so on ...

I have seen some people floating the idea of lump sum payment of UI benefits.

If I found myself unemployed after 10 years of work - I would rather get the benefits in one shot. After that I will be pounding the pavement like there is no tomorrow looking for work.

The current system will make me relax and take my sweet time looking for that perfect opportunity ...

Peter Gibbons

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Re: 99 weeks of unemployment benefits
« Reply #5 on: January 27, 2011, 02:31:34 PM »
Quote
Should be titled: "Wanker Libertarian Rich Guy Complains About Poor People Getting $100-$400 Per Week In Taxable Income".
I would guess the mortgage interest subsidy the government gives to Phil Greenspun for his house(s) rather significantly exceeds the payments made to anyone receiving unemployment insurance. Which of course is INSURANCE in the first place - the employee pays for it while working, and then receives it, when not working.
MIT receives something close to a billion dollars per year in government funding. Phil Greenspun is eating a lot more of that government cheese than anyone receiving unemployment insurance. But self-awareness is not a common trait among the libertarian programmer mindset.

 ;D ;D ;D

I think any real libertarian will be absolutely against the mortgage interest subsidy ...  And of course Greenspun made enough money to buy house without mortgage ... I am not a fan - I don't follow what he does ...

The real question is if 99 week unemployment insurance is actually good for the people that received it.

I have a friend who was drawing benefits for 99 weeks. Now he is starting to look for job more seriously but that 99 weeks idle time do not look very good on his resume.

I am not jealous that he got those money. In fact if I was in some kind of competition with him - I would like the government to give him another 99 weeks of UI benefits. He will almost for sure stay at home another 2 years.

If they gave him a lump sun of year of benefits - I am sure he would have found a job by now or started a small business.

The Gorn

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99 weeks of beer on the wall
« Reply #6 on: January 27, 2011, 02:40:18 PM »
I straddle the fence on this one.

I think human beings can do marvelous things out of sheer necessity. I also think that most humans aren't that creative, and are shaped by their environment to "chop off" their innate talents so that they can fit into the work force.

For example, I have made harsh personal decisions and redeployed my own talents based upon the market for my services changing in a way that was unacceptable to me. Frankly I think it's pretty sissy and weak to never consider reinventing yourself. But that kind of thinking - to reinvent - is what is sometimes required for survival.

But that reinvention concept is EXACTLY what employers discourage. Be a good little programmer smurf and accept our career ladder. Oh, you deviated from "the program"? We must punish you for subversion. No job for you! Please go off and die poor so you can be an example to our staff.

So, the tools that you need to survive unemployment are precisely the tools that employers seek to destroy in their employees.

Let's take an extreme case. What if there were no unemployment at all?  I think no unemployment would result in an enormous additional demand for low end jobs. Jobs that I can attest from the experience of a family member trying to find work, simply do not exist in abundance in the current economy. I think you'd see far higher homelessness, etc.

I think it's somewhat hypocritical and misleading in terms of statistics to call this subsidy unemployment. Once it goes much over 52 weeks, you're really talking about a form of public assistance, AKA welfare.

I personally think that long term unemployment coverage should be replaced by broader and more numerous incentives to the unemployed to start their own small businesses, as well as direct payroll or payroll tax subsidies to employers who hire the long term unemployed. Instead, our system, being the system of an antagonistic society of a-holes, seeks to punish the unemployed and to provide no particular push to find them work. You're jobless, you must have deserved it.

I don't like the idea of lump sum payments. People would game such a system too much and, frankly, most people would piss the money away. I do like the idea of alternative forms of compensation or buy-down of the risk of new businesses or of taking on the jobless as employees. These formats are also subject to fraud and abuse but in a much more convoluted way that is not as readily convenient.

Oh, by the way, the most talentless pieces of human excrement work for "One Stop" job search and training centers. My wife had to report to one when she was on unemployment. These centers are demeaning, treating the middle class like lifetime unemployed. The One Stop system is a scam and a disgrace and has no value to anyone with an IQ over 75.

Also it really pisses me off that the government cherry picks the reported unemployment rate by only selecting those on unemployment assistance. The true unemployment rate is far, far higher.
« Last Edit: January 27, 2011, 03:01:12 PM by G0ddard B0lt »
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Richardk

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Re: 99 weeks of unemployment benefits
« Reply #7 on: January 27, 2011, 03:03:05 PM »
Peter,

I agree that the lump sum payment idea is interesting. You could hit the pavement, retrain, use it as seed money or relocate. Lots of options.

My point was that unless your company is closing down or clearly moving jobs off shore, you expect to get called back. And if not by your current employer than someone else. No one expects to not find a job.

It takes a long time with lots of denial before you realize that your job is gone forever. By then a lot of your unemployment is gone and your options are becoming limited. Then it hits you that the survival job that you turned down maybe wasn't so bad and that you should have canceled your cell phone, cable TV and any other unnecessary service when you lost your job, to conserve your cash.

When the market was churning with jobs then maybe 26 weeks was enough. Today it's nothing short of a shock to most people.

Years back we had a factory shut down and move to Mexico. Lost about 1,000 jobs from what I recall. There were programs in place to help people retrain or relocate since this was a big deal but you didn't see the impact until years later. First the unemployment ran out, then money for dislocated workers, retaining programs, followed by people dipping into 401K's and retirement funds. Finally once all that was gone, the foreclosures and bankruptcies tripled in the city. Homes were for sale everywhere and the newspaper was filled with sheriff sales next to a few ads to deliver newspapers in the jobs section.

The ones that didn't get out or find a new job after retraining lost everything. This took years to unfold and many were "unemployable" due to their age, like 50+. Tied to the area with a house, kids, grandchildren, aging parents, etc and too old to be working again when a 20-something is available at 1/3 the cost.

For these workers 26 weeks or 26 months would have the same result. So perhaps the problem isn't the length of time you get unemployment but what you do with these "idle" workers.

Richardk

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Re: 99 weeks of beer on the wall
« Reply #8 on: January 27, 2011, 03:09:33 PM »
GB,

Good points. I like the 'start a business' idea.

Also it really pisses me off that the government cherry picks the reported unemployment rate by only selecting those on unemployment assistance. The true unemployment rate is far, far higher.

So what happens once you drop off the end? You're now counted as one of the employed since it's a percentage of unemployed to the whole? The true rate is much higher plus don't forget the under-employed and part time people.

Peter Gibbons

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Re: 99 weeks of unemployment benefits
« Reply #9 on: January 27, 2011, 03:20:48 PM »
Quote
I don't like the idea of lump sum payments. People would game such a system too much and, frankly, most people would piss the money away. I do like the idea of alternative forms of compensation or buy-down of the risk of new businesses or of taking on the jobless as employees. These formats are also subject to fraud and abuse but in a much more convoluted way that is not as readily convenient.

You have valid points. No system is perfect.

Maybe something along the lines of would work:

If you have paid over 5 years into the UI fund - you get 26 weeks lump sum.
If you have paid over 10 years - then you get 52 weeks ...

... or maybe not. Some people will do crazy things to get a large sum of money ...

The current system however is clearly not designed to help ( and push ) people to go back to work.

Peter Gibbons

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Re: 99 weeks of unemployment benefits
« Reply #10 on: January 27, 2011, 03:33:48 PM »
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So perhaps the problem isn't the length of time you get unemployment but what you do with these "idle" workers.

You are right.

However sometimes 6 months is not enough.

On the other hand getting paid 'not to work' for over a year becomes a problem.

I think there is a need for honest discussion about this issue and search for better ideas.

The problem is when any mentioning of the 99 weeks of benefits results in comments like:

"Wanker Libertarian Rich Guy Complains About Poor People Getting $100-$400 Per Week In Taxable Income".

P.S.

Quote
My point was that unless your company is closing down or clearly moving jobs off shore, you expect to get called back. And if not by your current employer than someone else. No one expects to not find a job.

I don't remember company ever calling me back after a layoff. There are however industries that are very cyclical and in fact I have heard that some fishermen would only work 6 months and then collect UI for another six months. ( In the Maritime provinces. ) This din't cause much complains since in this country the richer provinces support the poorer once with equalization payments. Still - this is not how UI is supposed to work.

Richardk

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Re: 99 weeks of unemployment benefits
« Reply #11 on: January 27, 2011, 03:36:32 PM »
I was thinking of it as fund that you pay into. The longer you work and the higher paying your job, the more that goes into it. You can't "game" it since it's "your money". Sort of an easy savings plan for that rainy day.

Regardless, more needs to be done to "re-educate" people that your old job isn't coming back. This isn't your father's unemployment where you could quickly find a new job.

Richardk

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Re: 99 weeks of unemployment benefits
« Reply #12 on: January 27, 2011, 03:42:23 PM »
The problem is when any mentioning of the 99 weeks of benefits results in comments like:

"Wanker Libertarian Rich Guy Complains About Poor People Getting $100-$400 Per Week In Taxable Income".

That's a problem. When I was collecting unemployment, I had people say "Must be nice to be on 'vacation'".

I told them that it wasn't a 'vacation' until I knew when I was going back to work.

JavaMouse

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Re: 99 weeks of unemployment benefits
« Reply #13 on: January 27, 2011, 04:14:45 PM »
JavaMouse,

If (God forbid) you lost your job tomorrow and were offered two options:

1. One year lump sum of UI benefits, that you keep even if you found new work within a month.

2. Up to two years monthly UI payments.

Which one would you take?

I'm not sure where this is going, but I'd probably take the 1 year lump sum, all things being equal.  Past experience has told me I'll get a job in 6 months, so that'd be the winning situation.

Of course circumstances might make me go for the 2 year situation. For example, if unemployment were much higher, like 25% or something.

JavaMouse

JavaMouse

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Re: 99 weeks of unemployment benefits
« Reply #14 on: January 27, 2011, 04:30:46 PM »
After that I will be pounding the pavement like there is no tomorrow looking for work.

The current system will make me relax and take my sweet time looking for that perfect opportunity ...

That's interesting.  I wonder if this is why different people look at unemployment benefits, and the receivers thereof, differently.

I have never taken my sweet time looking for the perfect opportunity when unemployed. I've been largely in a state of panic, looking for work almost non-stop, training, practicing for interviews.  I'd do this for 3 days a week, and then for 2 days I'd try to take off to relax a bit, or to practice with coding projects.

You are not supposed to apply for unemployment benefits if you are not actively looking for a job during each week.  The most relaxed I ever got during unemployment was to take one week of vacation, at which time I did not apply for benefits.

I don't know about your situation, but I received the max unemployment benefits allowed during the times I was unemployed (except for the one time when I was self-employed, in which case I got nothing).

The max benefit was something like $400/week. COBRA was almost $600/month, and rent was $800.  Naturally those were not my only expenses; the unemployment benefit was not covering my cost of living. I was slowly burning up savings when unemployed.  This contributed to my panic - wondering how long this would last, and watching the savings I'd so carefully made go into a black hole.  And I've always had a nice cushion of savings, even the first time I was unemployed.

As Phil G has suggested on more than one occasion, in fact, I did move to get new work. I took a huge risk. I don't have a spouse or children that this would affect. I paid for my own relocation, it cost hundreds dollars, and then paid for rent in a new city while looking for work.  I can imagine this kind of move being disastrous for other people, who might wind up homeless far away from any support system.

Perhaps the benefits being extended should be means-tested.  I've spoken with a few people who had huge savings, and apparently considered unemployment a nice paid vacation.

Personally I've never been able to look at it that way.  Maybe Phil G looks at it that way, which is why he finds it hard to understand the desperation felt by others in this situation.

JavaMouse