Unemployment insurance is a cruel government ploy

Unemployment insurance is a cruel government ploy

by
Wayne Hoffman
December 6, 2010
Wayne Hoffman
Author Image
December 6, 2010

Some will take this as cold and heartless at Christmastime, but it needs to be said, especially to those folks who have been protesting Congress' refusal to extend unemployment benefits: Unemployment insurance is an unholy alliance between the state and federal governments with disastrous results. The politicians who support unemployment insurance and continued extension of benefits bear some of the responsibility for the unemployment rate that today stands just shy of 10 percent.

I, for one, am glad that another unemployment benefits extension isn't forthcoming.

Don't get me wrong. I certainly have compassion for the people who are unemployed, who worry that their unemployment insurance benefits are about to expire and their job prospects are dim. But I satisfy my need to be compassionate for my fellow Idahoans through my voluntary charitable giving. I do that because of what unemployment insurance has done and continues to do.

The government, through its own brand of coercive altruism, forces businesses to pay high rates of taxation to supposedly protect employees in the event they lose their jobs. Employees, in turn, are paid less than they would be if the businesses they work for didn't have to surrender money to the government for unemployment insurance.

These employees, as a result of the government's promise of help, defer savings, thinking that if they lose their jobs, the state employment agency will step in and help out with unemployment benefits. And, of course, anyone who has ever received an unemployment check is aware that the check is less than satisfying, with benefits that do little to cover a person or family's living expenses.

To fund this diabolical government scheme, Idaho businesses are getting hammered by swelled unemployment insurance tax rates. New businesses pay 3.36 percent, one of the highest rates in the country. In other words, the insurance that is supposed to help people who are out of work is now keeping new businesses from opening and companies from hiring.

The White House is trying to scare people by telling them that because Congress is holding out on yet another unemployment insurance extension, seven million Americans will lose their unemployment benefits. In Idaho, the Obama Administration says it amounts to around 25,600 people who are out of work, and whose benefits are exhausted or soon will be. Said Austan Goolsbee, chairman of the White House's Council of Economic Advisers, "Letting millions more Americans fall into hardship will hurt our economy ... and immediately undermine consumer spending." Goolsbee says the extension of unemployment benefits is "not only the right thing to do, it's the right economic policy."

The fact is, it is unemployment insurance that is hurting the economy, hurting the ability of businesses to hire and return people to work. Many employers know people who turn down jobs because these unemployed individuals perceive they're better off receiving the government check than they are taking a job. How perverse.

In reality, the cold and heartlessness comes not from people like me, but from those who continue to perpetuate and support a losing, mean, Grinchy proposition that is unemployment insurance.

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