Unemployment Assistance Part II: Roles and Goals

What would life look like if no public unemployment assistance existed? The United States in particular and the world in general is still suffering from “The Great Recession”. Without the availability of public unemployment insurance, how would life be different?

Before determining the roles and goals of unemployment assistance I believe it would be wise to address the question: Should public unemployment assistance exist?

While difficult to locate and often conflicting, there does exist a limited body of evidence based research addressing the beneficial and detrimental effects of public unemployment assistance. In summary, most agree the benefits are humanitarian and not economical.

• The Regional Economist
• CATO Institute
• Unemployment Insurance in a Free Society - Conerly
• Optimal Unemployment Insurance - Hopenhayn; Nicolini

In synthesizing my own feelings with the available literature,  I would give the following answer in response to if a public unemployment system should exist:

Short Answer: Yes, in combination with a repayment plan and a maximum lifetime limit. (Long answer with details forthcoming in future posts.)

When you know who you are. you'll know what to do.

- Mark Driscoll

Prior to constructing an unemployment assistance program, I believe it first needs to acquire an identity and given roles and goals. Flowing from a general identity, specific policies may be designed to accomplish the stated roles and goals.

According to the Federal Unemployment Insurance website, the role of Unemployment Insurance is to:

"In addition to helping workers and their families, the Unemployment Insurance programs play a key role in helping businesses, communities, and the nation's economy. It was created in 1935 in response to the Great Depression, when millions of people lost jobs. They couldn't buy goods and services, which contributed to more layoffs."

"Now, as then, the program helps cushion the impact of economic downturns and brings economic stability to communities, states, and the nation by providing temporary income support for laid off workers."

Additional Information

Providing leadership, direction and assistance to state workforce agencies in the implementation and administration of state unemployment insurance (UI) programs, Federal unemployment compensation programs, and other wage-loss, worker dislocation and adjustment assistance compensation programs.

Managing strategically in order to ensure high performance, greater public accountability, service quality, and customer satisfaction.

Working collaboratively with partners and stakeholders in business, labor, and state governments by:

Providing oversight, guidance, and technical assistance for the federal-state unemployment compensation system and providing budget and legislative support to state workforce agencies to administer their UI programs and assist individuals to return quickly to suitable work.

Similar in nature, the State of Minnesota Unemployment Insurance Office stated purpose:

"The Minnesota Unemployment Insurance (UI) Program provides a temporary partial wage replacement to those Minnesota workers who become unemployed through no fault of their own. It is an economic stabilizer/stimulator in times of economic downturn and helps maintain an available skilled workforce for employers."

Mission Statement: "Enhance workforce development and economic strength of Minnesota by providing unemployment insurance for individuals and employers."

My vision - 

"Provide sufficient and timely aid allowing for individuals to transition to new employment and if needed, standard of living after other available resources have been exhausted."

Goals –
While the purpose of various unemployment assistance programs provides a birds eye view, goals further focus the intended purpose of the program. In respect of your time, I have limited the content of federal and the State of Minnesota's goals by providing links to them immediately below.

State of Minnesota Unemployment Insurance Website

Federal Sites -
Home Page
About Unemployment Insurance
FactSheet
Administration Breakdown - Interesting flow sheet representing the hierarchy of federal unemployment insurance. Take note, the bottom half is composed of teams. All paid positions...


My Goals -

• Goal #1: Empower state and local governments
• State and local governments will be encouraged to go above and beyond the national unemployment assistance program.
• One size does not fit all and each community should be encouraged to tailor a system to fit their constituents needs.
• Goal #2: Funds reach recipient in < 2 weeks
• Most people will have their last paycheck cover them for ~2 weeks.
• Goal #3: Sufficient/Generous payments
• Maximize recipient's ability to find reemployment, not stress over ends meet.
• Goal #4: Flexible benefits
• Recipients may choose how much and how long to receive benefits.
• Goal #5: Time from initial request for assistance to completion of initial request averages < 1 hour.
• Simplify eligibility and verification requirements.
• Goal #6: Encourage personal responsibility
• Functions as quinary safety net (more on this later).
• Goal #7: Efficient delivery of benefits
• Reduce administration costs.
• Reduce waste, fraud, and abuse.
• Goal #8: Eliminate additional employer burdens
• Not popular, but I would be considered pro-business
• I do not agree with the government dictating who and why businesses hire and fire. Applying penalties to cutting workers is the government meddling in the affairs of private individuals attempting to manage their own business.

5 things unemployment system is and 5 things it is not -

Is not:

• Designed to make all people happy
• Designed to cover worst-case scenarios
• Primary safety net of unemployed individuals (or secondary, or tertiary, or quartenary)
• A penalty or burden to businesses
• Free ride

Is:

• Designed to make some people happy
• Quinary safety net designed to provide timely and sufficient assistance to those in need
• Compliment to state/local government unemployment systems
• Temporary
• Exchange of freedom for security

Hopefully you were able to acquire a perspective on the roles and goals I desire a public unemployment system to fulfill. I encourage you to read the articles listed above, of which are written by individuals with much less naivety, more education, and more experience than me (Why I need this blog). My next post will present details of our federal and the State of Minnesota's unemployment assistance programs.

Next Post Topic: Unemployment Assistance Part III: Current System