Unemployment benefits safety net is fraying

[Pale Blue Dot]

Source: MSNBC

WASHINGTON - The government safety net designed to protect laid-off workers from financial catastrophe is falling short, leaving nearly half the 11.6 million jobless Americans without unemployment benefits.

The shortcomings are fueling the recession as an increasing number of workers fall through the cracks and curtail spending. The trend highlights what economists say is a growing need for a 21st century makeover of a program started in the depths of the Great Depression.

Among the key problem areas:
* There are many more part-time workers now than in 1935, but the program only covers those looking for full-time work.
* Many eligible jobless Americans are shut out because states use an outdated system for calculating their income, making it more difficult to meet requirements.
* Unemployment spells increasingly last longer than the usual 26-week jobless benefits program.

Jobless benefits are essentially mini-financial stimulus packages for struggling American families. Helping laid-off breadwinners continue to purchase goods and services until they find new jobs ultimately bolsters the economy and makes further layoffs less likely.

Read more: http://www.msnbc.msn.com/id/29084715/

[bemildred]

1. Unemployment benefits have never been worth much.

But we have so many unemployed now (thanks to outsourcing and Bushenomics) that it has become hard to ignore.

[Lint Head]

2. But, but, the Grammys are on.

:sarcasm:

[truedelphi]

3. Some people are saying that the Federal government will be out of money by mid-summer

So what then? If unemployment net has shredded, if the disability checks are frozen, if the tax refunds are mere IOU's, etc-- What then?

And Social Security? Will that be gone too?

[bemildred]

4. The federal government will never run out of money, just look at Zimbabwe. nt

[closeupready]

7. The Federal government will NEVER run out of money, since it is they who print it.

What COULD happen is we could see a return of inflation, because as they start printing more money, more money chasing a relatively static amount of goods means inflation. This would mean your existing money deposits reduce in value.

[truedelphi]

11. Well, that is pretty much the same thing, isn't it?

But I hear you.

[ejpoeta]

12. then people will start to understand what is going on

and there will be rioting in the streets. the government won't let that happen. as long as some of the people can live in their pretend world where they are on the other side of the rich/poor divide (my famly), and they think that they are ok, then everything is fine and we keep going just as the government wants us to. but when the crack is revealed, and the ones who are believe that they are the ones being screwed by poor people realize that they are part of that category, then all hell will break lose.

[dickthegrouch]

5. Calif unemployment benefits suck

When I got laid off a few years ago, after earning close to a six figure salary, California only gave me about 400/week in unemployment. Going from $2000/wk to 400/wk was a VERY nasty shock.
I had just taken on a much larger mortgage and had to dig really deeply into my savings to survive.

On edit: Of course the bastards taxed me on the premature withdrawal of savings too, so I lost in every way imaginable.


All of which goes to say that the safety net has been practically non-existent for many years.

[DollyM]

8. why can't they waive the penalties for early withdrawal during these times?

We have cashed in our IRA's and the last of our retirement money just to survive with no unemployment left and the state of Wisconsin wanting us to pay back $3000.00 in unemployment that they say my husband should not have got!! I shudder to think what we will have to pay in taxes this year with all the unemployment we will have to pay taxes on as well as the cashed in retirement money. If they want to do something to help the unemployed immediately, why not waive the penalties on early withdrawal of retirement benefits and stop taxing unemployment. Unemployment compensation is so pitiful anyway, who can afford to have extra taxes taken out like they want you to do. It's ridiculous!

[llmart]

15. Seems to me.....

that I remember a time when your unemployment was not taxed. When did that start? I'm guessing the Reagan years. Anybody know?

[grace0418]

6. Considering the MOST you can get in Illinois is $321 a week, it's not

much of a safety net anyway. In Chicago that barely covers rent, never mind utilities, food, transportation, and insurance. If I were single, I would be freaking out a lot more than I currently am. Right now I'm just socking all my unemployment into savings to help take the edge off when my severance runs out. Hopefully it will cover what my husband's salary doesn't, but many others aren't so lucky as I am. This is getting out of hand.

[stillcool]

9. Oh No!! They're curtailing spending!!!

who cares if they have a house, health-care, or make a decent wage...Quick give them a tax-cut via a rebate check and make them run out and shop till they drop!

[rpannier]

10. Just finished it

Was gonna post it, but you beat me to it

I'm glad it was posted up here

Thanks for doing so

[radfringe]

13. few thoughts regarding unemployment:

few thoughts regarding unemployment:

1. If the repubs are serious about "cutting taxes", how about eliminating Reagan's tax on unemployment?

2. Currently, unemployment is funded through employers only. People collecting unemployment typically receive approx 60% of their former pay. Looking to the future - what if employees also paid into the fund? 1% of gross? and that would translate to a higher unemployment check 75% of former gross pay (which would approximately be equal to net take-home pay)

3. the other problem with being unemployed is HEALTHCARE - yeah, there's "cobra" - however the cobra payments are usually unaffordable for people collecting unemployment. Let them sign up for medicaide until we get a universal healthcare program going...

[DallasNE]

14. Another Example Of Republican Obstructionism

We have known about the current weakness in this system for a long time. For just as long Republicans have obstructed attempts to modernize this program.

The odds are that it won't get fixed now either.