Unemployment Insurance

Driving in to work this morning I was listening to a talk show host speak about the current unemployment insurance payments made by the federal government to those who have lost their jobs. The key details I honed in on were 99 weeks (the length of time a person can draw unemployment) and that most people who find jobs while drawing unemployment do so just before it runs out.

I need to be careful here or risk being called a cruel, cold-hearted conservative. I do support the unemployment program as a safety net for those who unexpectedly lose their jobs. I also believe that 99 weeks is an overly large safety net. While I understand that very few people would retain their accustomed lifestyle while drawing unemployment, I also believe that a 99 week period does not convey the proper sense of urgency needed by a job hunter drawing their support from fellow citizens.

The fact that most people who find jobs while on unemployment do so near the end of their benefit indicates that desperation may set in when the end nears. People begin to accept any job instead of holding out for "the" job. In this context, desperation is a good thing. I would suggest the program be modified to inject even more desperation.

What if the 99 week limit were to remain the same, but during the first 25 weeks, the pay out would be 125% of the current amount. The second 25 weeks would be at current levels. The next 25% at 75% of current levels and the final 24 weeks at 50%. I believe this plan would accomplish 2 goals. First, the overall cost of unemployment payouts should drop, even if a person draws the entire 99 weeks of unemployment.

But the most significant benefit would be if the periodic drops in unemployment pay would be enough to encourage many unemployed people to take a lesser job earlier in the process. This would return significant savings to the program.

Whether you agree with this approach is probably driven by how you see the unemployment insurance program. Is it a safety net or an entitlement?