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America’s Unemployment Insurance Programs Need to Be Reimagined

unemployment insurance claims office
Photo by Bytemarks

From the Atlantic, Bourree Lam writes about the issues with the current unemployment insurance programs including the exclusion of self-employed workers from the programs.  She writes:

“In the U.S., unemployment-insurance programs provide benefits to a large number of people. Kugler writes that the current program collects $5.1 billion in federal taxes and nearly $50 billion in state taxes from employers. Currently about 90 percent of jobs are covered, with the big exception of self-employed workers amongst other professions.

A persistent difficulty in devising unemployment-benefits programs is that these programs try to balance two potentially contradictory goals: giving income to the jobless, while trying to set up incentives for them to return to work. Kugler says that current U.S. programs set these goals up in conflict with one another. “Paradoxically, unemployment insurance systems sometimes include requirements that discourage individuals from engaging in the kinds of activities that could help them eventually obtain productive employment,” she writes.

The current programs have specific rules about who is eligible to receive benefits. In addition to working in a field that provides benefits in the first place, in order to receive them, a worker must be actively searching for work, and must accept work when it’s offered. The last requirement plays out differently in various states: In Texas, for example, those receiving benefits must accept a job that pays just 75 percent of previous wage. In Iowa, this drops down to 65 percent after 18 weeks of unemployment.

These strict requirements might be why, as of the end of 2014, only 23 percent of unemployed workers in the U.S. were receiving unemployment benefits…”

Read the full story at America’s Unemployment Insurance Programs Need to Be Reimagined

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