UNEMPLOYMENT ENSURENCE.

1. A surprising feature of the recessions of the early 1980s was the equanimity with which the electorate tolerated high unemployment rates. One major reason for this was our system of unemployment insurance.

2. One of the most valuable pieces of legislation to emerge from the trauma of the Great Depression was the Social Security Act of 1935. Among other things, it established an unemployment insurance system which is now administered by each of the 50 states under federal guidelines. Thanks to this system, many – but, as we shall see, not all – American workers need experience to complete loss of income that so many suffered during the 1930s.

3. While the precise amounts vary substantially, the average weekly benefit check to unemployed workers in 1983 was about $122. This amounted to about 44 percent of average earnings. Though a 56 percent drop in earnings still poses serious problems, the importance of tis 44 percent income cushion can scarcely be exaggerated, especially since it is tax free and may be supplemented by funds from other welfare programs. Families covered by unemployment insurance simply do not go hungry when they lose their jobs, and they are only rarely dispossessed from their homes.

4. Who is eligible to receive these benefits? Precise qualifications vary from state to state, but some stipulations apply quite generally.

a). Only experienced workers quality. The amount of experience necessary to establish eligibility varies state by state, but persons just joining the labour force ( for instance, new graduates of high schools or colleges) or reentering after a protracted absence (such as women resuming work after many years of child caring) are never eligible.

b). Job quitters are not eligible. With certain exceptions, people who are unemployed because they quit their last jobs cannot collect benefits. There are many workmen, chiefly unskilled, who shift about from one industry to another.

c). You must be looking for work to qualify. People unwilling or unable to work cannot receive unemployment benefits, and a recipient of benefits cannot reject a “suitable” job. The State tries to provide facilities on the scale, now needed, to train the increasing number of redundant workers for new jobs in other industries.

d). Benefits end after six months of unemployment. This time limit usually is extended by Congress when there is a recession, but there is always some limit.

Because of all these limitations, less than half the roughly 10.5 million persons who were unemployed during 1983 actually received benefits.

5. The importance of unemployment insurance to the unemployed is obvious. But there are also significant benefits to citizens who never become unemployed. During recession years many billions of dollars are paid out in unemployment benefits, and since recipients probably spend most of their benefits, unemployment insurance limits the severity of recessions by providing additional purchasing power when and where it is most needed.

6. The unemployment insurance system is one of several “cushions” that have been built into American economy since 1933 to prevent the possibility of another Great Depression. By giving money to those who become unemployed, the system helps prop up aggregate demand during recessions. The USA consider unemployment to be one of the worst misfortunes that can befall the person or family and has many harmful influences on industry and society at large. The state should step in to help. It is unjust that workers should suffer for conditions they cannot in any way control.

7. While the U.S. economy is now probably “depression proof”, this should not be a cause for too much rejoicing, for the recessions of 1980 and 1981 – 1982 amply demonstrated that we are very far from “recession proof”.

8. So, the evils of unemployment are admittedly great, but they are due to conditions and circumstances which cannot be ended or mended quickly by any State action. Only by patience and the slow rebuilding of international trade can we look for relief.

Date: 2016-04-22; view: 664