Unemployment Benefits are Insurance

The issue of whether to extend unemployment is an emotionally difficult one.

First of all, in the interest of full disclosure. I was on unemployment for five weeks back in 2003. The wait week and the five weeks of taking unemployment were some of the most miserable in my life, as I don’t relish not earning my pay.

I can only imagine how bad it has been to be unemployed for years at a time. I feel for those who are in this position.

However, Unemployment Compensation is really only justified if it’s insurance. You and your employer pay the premiums and then when an event happens that meets  the policy standards , the unemployment insurance policy kicks in for a time that is set in accordance with the rules governing the insurance, you receive payments.

I have a supplemental policy (which I carry for extra disability coverage) and it will pay me $300 a month for 12 months if I’m out of work for three months-No extension.

What the Democrats are seeking to do is  transform the nature of unemployment benefits from insurance to entitlement, and have had a great deal of success in the effort with constant extensions of benefits beyond what people paid for when they were working. If they should succeed, we’ll become like Europe which perpetually has a higher unemployment rate than the U.S. as they are far too generous. As one noted economic wrote:

Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job.

That from a textbook written by New York Times columnist Paul Krugman, though Krugman appears to disagree with what he writes in textbooksf when writing columns. But, I digress. While, it’s difficult for those out of a job, they’ve receive what they were promised and then some. It’s time to stop the forever entitlement and some folks on unemployment agree: (Hat Tip: Hot Air.):

But the rest of the dozen who e-mailed my 96.9 FM morning radio show? In a startling indication of distrust, they spoke of their fellow unemployed workers “gaming the system” —collecting unemployment while working under the table.

Unlike rule-following Greg Vasale, who paid the price for honesty, some admitted turning down low-paying jobs. They suspected others of lying about even trying to find work. “You used to have to go down and prove your were looking,” said one. “Now you just send in a form.”

Said another: “People should have to do some kind of public service or volunteer (to get unemployment) to weed out the lazy ones.”

It’s time to stop the perpetual extensions and to condition future extensions on working for at least some of the money earned.

Read more at Adam’s Blog