Even though our nation’s debt may serve as the impetus for change, as detailed in Unemployment Assistance Part I, federal unemployment insurance constituted only 4.2% of total federal expenditures ($156 billion), and 11.3% of welfare expenditures in 2012. Thus, my proposed changes to the unemployment system are primarily motivated by decreasing waste, fraud, abuse, and inefficiencies, not solving our national debt crisis.
Prior to reading my proposed changes, I request you review my previous unemployment assistance posts:
Part I: Overview
Part II: Roles and Goals - Please especially read this post as it details what I see as the functions of a federally funded unemployment system
Part III: Current System
Part IV: Pros and Cons
Tldr:
- Costs of unemployment system have ballooned in recent years. Between 2000 and 2010, a 1017% increase in dollars spent and a 698% in percent of GDP was realized.
- Current system is very complex. I had to go to law manuals to get information...
Proposed Changes -
To preface, these changes are only for a national unemployment system and do not reflect my beliefs on how other groups (friends/family, private charities, local governments) should administer unemployment assistance. Today I will cover general rationale and aim for changes. My next post will go into the nuts and bolts, and dollars and cents of how to implement stated changes.
1) Increased participation of individual, friends/family, private charities, and state/local governments
States already have the authority to offer additional unemployment assistance. The federal government simply needs to step out of the way. I find it interesting no states offer longer benefits than mandated or subsidized by the federal government.
2) Benefit repayment
As covered in Food Assistance Part I and Part 2, I believe implementing a repayment plan largely retains the benefits of public unemployment assistance in providing sufficient and timely aid, while minimizing the risk of waste, fraud, abuse, and inefficiency.
3) Reduce maximum duration
Consistent with functioning as quinary safety net, recipients would be eligible to receive benefits for 12 weeks. Again, private charities and local governments would be encouraged to extend benefits longer as they deem appropriate.
4) Increase eligibility
All individuals with documented loss of taxable income are eligible for benefits. While less common today, part-time workers may be disqualified from collecting unemployment benefits. Please see State of Minnesota's Guidelines for working while collecting unemployment benefits.
5) Maximum lifetime limit
Individuals would be eligible for 12 paid weeks of unemployment. Individuals would accumulate additional eligibility (up to 12 weeks) as they repaid the benefits they previously received. Mathematically this gets complicated and these specifics will be covered in my next blog post.
6) Increase flexibility
Recipients would be able to choose (up to maximum limit) amount and duration of benefits. Rather than our current system where there is little incentive to take reduced benefits, with the addition of a repayment plan, individuals would have an incentive to only take those benefits they need.
Change recap
- Increase individual, friend/family, private charity, and local government involvement
- Implement repayment plan
- Decrease duration of benefits
- Increase eligible participants
- Enact maximum lifetime limit
- Increase payment flexibility
Tldr: I support a federally funded unemployment system, however, I believe it should be the quinary (5th) safety net behind:
- Individual
- Friends/family
- Private charities
- Local governments
- National government
Advantages and disadvantages of proposed changes
- Greater flexibility and creativity by moving away from the one size fits all structure
- More citizens would be eligible for benefits (part time workers)
- Decreased risk of waste, fraud, and abuse
- Disincentives in place to reduce unnecessary utilization
- Less dependence on national government
- I see this as an advantage although some would argue it is a disadvantage
- May increase confusion with a number of states, cities, and private charities each creating and administering their own system
- Things may get worse before they get better
- Infrastructure may not be in place for private charities and local governments to pick up slack at this time
I do not believe there is a panacea for our nation’s unemployment system. Each individual case is simply too complex and varied to have a cookie cutter system. I do believe the closest we can get is giving individuals and communities the greatest freedom to design and implement a system they see most fitting. Hence my rational for proposing changes removing the federal government as the primary provider of unemployment assistance and empowering others.
Admittedly, unemployment assistance is a very complex and difficult subject. In my next post I hope to further eliminate confusion with my proposed changes by getting into specific dollars and cents what my proposed national unemployment assistance system would look like. Meanwhile, keep your stick on the ice.
Admittedly, unemployment assistance is a very complex and difficult subject. In my next post I hope to further eliminate confusion with my proposed changes by getting into specific dollars and cents what my proposed national unemployment assistance system would look like. Meanwhile, keep your stick on the ice.Next Post Topic: Unemployment Assistance Part VI: Change Specifics
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