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I'm using the word "progressive" in the sense of "progressive taxation"  The analogy is with the full range of income tax, where for the negative tax segment those with greater need obtain greater government benefit (more payments) and those with less need (higher income) obtain less government benefit (higher taxes)

Welfare, direct payments to families based on need, is designed to be progressive, while unemployment compensation was never designed as such.  Like Social Security, it is modeled after insurance, where those who contribute most, correlated with earning the most, obtain the most benefits. It may be no accident that the term Unemployment Insurance is being replaced by Compensation

I don't want to overstate my point, since based on net worth, or overall income, the proceeds from unemployment insurance are more important to the poor than to the rich.  But, in absolute terms, those who are richer, those who earned more when they worked, get more taxpayers money when they receive unemployment insurance.

This is an important point to raise at this time because the Obama Tax Compromise being debated uses funding for extended unemployment insurance, a regressive expenditure, to balance lower taxes for the rich, by definition, also regressive.  

When the President talks about this, and when Bernie Sanders spoke today, the assumption was that extended unemployment compensation would bail out those in most desperate straits.  Sometimes it will, but sometimes it will not. What makes this a difficult subject is that the theory of U.S. unemployment benefits is that it would be insurance paid for by employee and employer without taxpayer funding. With the extension, it becomes a hybrid, part entitlement and part insurance.  But the amount of payment is still based on the insurance model, even though the funding for the extension is now from the taxpayer.

Each of our fifty states has it's own rules, procedures and regulations, but the principles are the same, the more you contributed, the higher your earnings, the more you receive. Unemployment Insurance Compensation is quite complex, as each state has it's own unique rules, payments and standards with the maximum weekly rate of payment varies widely, from $900 down to $250. So at the very highest levels someone who had been making over six figures annually, and who has considerable assets or a high income spouse will still receive up to $50,000 a year.

We treat Unemployment as if it were a welfare program, and in other countries there are elements of this, as described in this article. There are countries that consider a spouses income, or number of children in determining benefits, but not in the U.S.  

If there is to be a trade-off for providing government benefit to the wealthiest 2%, at the very least it should be in the form of a program that exclusively helps the poorest.  There is such a program.  It's called welfare.  It must be a program with means testing, so that a person who loses his/her job is not given aid if there are other sources of income or wealth.

I no longer personally blame the president for this compromise, as he attempted to have a tax bill passed based on his campaign promise, but did not have the support of Democratic Senators.

But subtext matters. Even beyond my fiscal argument, he explicitly said that when faced with a threat, he will not allow harm to come to the hostage, in this case our country.  The principle of "not negotiating with terrorist" is not negated when, as he said, "it looks like the hostages will be hurt."  In fact, that's exactly when the principle means something.  

Unemployment compensation is not a social safety net, even if it is framed this way by our President.  The benefits are too little for many and too much for some.  "Welfare" is too hot a term to be advocated, so we are pretending that unemployment compensation will solve the same problem.  This is an illusion.  

This Tax Compromise proposal leaves those who need help the most out in the cold, while helping the most wealthy and increasing the deficit. It could be that given public perceptions and political realities this is the best that we can do.  If so, it's pretty sad.

Originally posted to ARODB on Fri Dec 10, 2010 at 07:04 PM PST.

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Comment Preferences

  •  What we need is a bill... (7+ / 0-)

    ...that will generate jobs, like infrastructure work. This sack `o' crap won't do shit for that!

    And from what I've seen, it's starting to work as a wedge issue.

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Fri Dec 10, 2010 at 07:08:16 PM PST

  •  Would You Support A Guaranteed (1+ / 0-)
    Recommended by:
    Situational Lefty

    "Basic Income" for all Americans? As Martin Luther King did?

    •  It's not whether I would support it.... (2+ / 0-)
      Recommended by:
      doinaheckuvanutjob, pkbarbiedoll

      Bill Clinton signed the bill ending welfare, which was a type of guaranteed wage.  

      We are far from having anything like this passed in this country.  This is why Dems have to pretend that it's only an extension of having a job, but spin it as though it's a safety net.

       

      •  Actually when he ended... (5+ / 0-)

        "Welfare as we know it" it wasn't anything like a guaranteed wage for people without children. There's never been a true "dole" in the U.S. as far as I know, for fully able bodied people without children.

        Forward to Yesterday -- Reactionary aesthetics and liberal politics (in that order)

        by LABobsterofAnaheim on Fri Dec 10, 2010 at 08:26:28 PM PST

        [ Parent ]

        •  Some states had General Assistance (1+ / 0-)
          Recommended by:
          arodb

          It was only a few. I think New York was one. But I think "welfare reform" ended that.

          Also ... those who were eligible for old-time welfare weren't necessarily getting the equivalent of a living wage. Memory fades, but I believe the figure cited during the Clinton-era discussion was $168 per month for 1 child in Alabama. Even less for the 2nd child.

          Just because you're not a drummer doesn't mean that you don't have to keep time. -- T. Monk

          by susanala on Fri Dec 10, 2010 at 08:54:41 PM PST

          [ Parent ]

        •  In 1922 Nebraska had "mothers pensions" (0+ / 0-)

          which were conditioned on a lack of close relatives able to help out.

      •  There was a rec list diary here the other day (1+ / 0-)
        Recommended by:
        arodb

        by an ex pat living in the UK who pointed out that the UK and Germany give unemployment benefits to anyone unemployed for the full period of their unemployment, there isn't an end to it until the worker finds a job. We don't do that here.

        The Europeans understand that a good social welfare safety net prevents the kind of desperation and unrest that lead to the Mussolini, Hitler, and Franco regimes.

        The Great Recession is a happy happy joy joy time to drop your obsolete skills and train for new ones.

        by doinaheckuvanutjob on Fri Dec 10, 2010 at 09:15:56 PM PST

        [ Parent ]

        •  It's not exactly unemployment benefits... (2+ / 0-)
          Recommended by:
          doinaheckuvanutjob, arodb

          ...for the long-term unemployed in those countries. It starts out that way and then changes into something closer to "general assistance." But nobody "runs out" of government assistance after being unemployed for a long time.

          Don't tell me what you believe. Tell me what you do and I'll tell you what you believe.

          by Meteor Blades on Fri Dec 10, 2010 at 10:36:47 PM PST

          [ Parent ]

  •  Alternatively (2+ / 0-)
    Recommended by:
    SingleVoter, denise b

    If there is to be a trade-off for providing government benefit to the wealthiest 2%, at the very least it should be in the form of a program that exclusively helps the poorest.

    That all depends on the purpose of the trade-off.

    If the purpose is to keep the tattered remains of the middle class from becoming poor, then you would want something that provides enough to, for example, tide people over wherever they already are, financially. If you're making a middle class income, you probably have house payments in a middle class community, car payments, and other obligations you cannot meet without aid that at least nominally reflects the income you have lost.

    Shop Liberally this holiday season at Kos Katalog

    by radical simplicity on Fri Dec 10, 2010 at 07:13:25 PM PST

    •  How long is "tiding over".... (1+ / 0-)
      Recommended by:
      doinaheckuvanutjob

      we may be on the cusp of a long term structural unemployment, or underemployment.  Do we endow those who happened to have had a good job with this income, or a fraction thereof for how long.

      These are serious issues, and I am only raising the issue, that unemployment compensation is not in reality, as it's being sold.  

      I can't say that I have the answer to the larger problem.

  •  I'm not sure about your figures. (6+ / 0-)

    I drew the top level for Washington state, and that was $489.00 per week, no matter what your salary was. That isn't even half of $50K per year. Since I was laid off so long ago that I was only eligible for 26 weeks of benefits, I maxed out at just over $10K.

    What mythical place pays anyone $50K per year on UI?

    Or did the WA state Workforce Commission lie to me about what other people were making?

    "The difference between the right word and the almost-right word is like the difference between lightning and the lightning bug." -- Mark Twain

    by Brooke In Seattle on Fri Dec 10, 2010 at 07:23:21 PM PST

  •  One thing that might be done (0+ / 0-)

    is to allow unemployed people to borrow from their Social Security account at say 5% simple interest a year.

    We might also change the basic system to be based upon a 3%/3% employer/employee tax that always pays out upon unemployment even when an employee is discharged for cause.

    Those percentages might be doubled for construction workers.

    The fund would pay out until what has been paid in on behalf of the employee has been paid out.

    After 7% years of employment, an amount equal to 42% of a person's annual earnings would have been paid into the fund.

    Only about 30% of laid-off workers ever get unemployment benefits since employers claim firing for cause or drive a person to quit.

    My fault-free 3%/3% system would be more reliable and would make borrowing for things like cars and houses easier.

    If somebody has been working for 20 years, then about 120% of a person's annual earnings would be available. This could be claimed say at 65 to relieve a gap while waiting to get Social Security at say 67.

    My 3%/3% basic system would also help people who have to retire because of a disability.

  •  The basic 26 weeks is now generally (0+ / 0-)

    employer contribution related.

  •  Unemployment comp can be hard on small (3+ / 0-)
    Recommended by:
    Meteor Blades, Irons33, arodb

    businesses, expensive.

    I think it should be a government benefit, until one finds another job. I'd support a value added tax to fund universal health care, better unemployment benefits and other needed social welfare measures, like most western democracies have to support their social welfare benefits.

    The Great Recession is a happy happy joy joy time to drop your obsolete skills and train for new ones.

    by doinaheckuvanutjob on Fri Dec 10, 2010 at 09:19:10 PM PST

    •  Yep. Unfortunately, adopting a more... (3+ / 0-)

      ...European approach is highly unlikely. European nations have quite a varied approach to helping the unemployed, so saying "European approach" is kind of cheating. But what they don't have are people like our 99ers who would like to work and get nothing from the government when they can't find  job.

      Don't tell me what you believe. Tell me what you do and I'll tell you what you believe.

      by Meteor Blades on Fri Dec 10, 2010 at 10:34:11 PM PST

      [ Parent ]

  •  Hmmm... (5+ / 0-)

    Well I think I agree with your overall tone but in my 62 years I've never considered Unemployment as anything but insurance.  It certainly isn't welfare in the derogatory sense that that term has come to be used (ala welfare queen, welfare Cadillac.

    Unemployment compensation is not a social safety net, even if it is framed this way by our President.

    Guess we have to disagree about this part though.  It's exactly the same sort of social safety net as social security. It is an insurance program that is administered by the government and paid for by your employer.  It serves two functions.  The micro-economic function is exactly a safety net to help tide you over while you are out of work and either looking for work or in some cases being trained for a new job.  (Being trained while on unemployment makes total sense in our changing economy but it wasn't always the case. The only time I was on unemployment in the mid 70s you couldn't go to school and draw unemployment.)  The macro-economic reason at least in theory is to do exactly what we are seeing now, keep consumer dollars flowing which help keep recessions from turning into depressions.  Unemployment insurance puts inertia into the economic system preventing or at least delaying deflation of the currency.  

    While not everyone draws the same amount which is also true for Social Security I think you will find that the maximum limits are quite low in all states.  If not, I sure would like to see some proof that a high income person can receive high unemployment compensation.  

    Until this current budget crisis WA State has had General Assistance Unemployable which comes close to welfare.  You had to be unemployed and disabled and since the state had higher requirements than Social Security Disability there was the presumption that you could prove your claim and the state would then be reimbursed by the Feds. The cash payment was the same as SSI but the Medicaid program was actually better than Medicare.  Unfortunately this is no longer the case.   While we may or may not have won anything through the new federal health care program we have lost much at our state level.  At the moment the state of health care for the poor and indigent is much poorer in WA State than the pre-Obama election.  (Not a comment about the president, just a statement of fact.)

    So as usual progressives allow the regressive to define the agenda.  Unemployment is insurance which you can draw if you become unemployed through no fault of your own.  It is a safety net both for the individual and for the economy which is why the federal government steps in during recessions.  Federal intervention doesn't turn it into a welfare program.  You can't just quit your job and go on "employment welfare".  The term I've always heard used was you had to be laid-off and the word fired was used to mean you left because of something you did although the two seem to have gotten intermixed.  You have to be actively looking for work or in training and yes there are ways to game the system.  There are ways to game any system.  BP Oil paid $0 US taxes in 2009 for instance and I'm sure there were a few welfare Cadillacs out there at one time or another.    

    What do conservatives conserve?--Carl Sagan

    by YellerDog on Fri Dec 10, 2010 at 09:37:52 PM PST

    •  Response... (0+ / 0-)

      your write:

      ......I sure would like to see some proof that a high income person can receive high unemployment compensation.  
      -------------------
      It's in the links I provided.  The burden, given this reference, is to refute the statement.  But you won't be able to since my statement is accurate.

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