Congress has known about it for a while.
But it's just now hitting the presses.
Apparently, in 2009, about 2,400 people in households worth more than $1 million collected unemployment, at a cost of approximately $21 million dollars. Tom Coburn, a Republican senator from Oklahoma, has sponsored legislation to make these people ineligible for unemployment, but it's stalled in Congress.
Some websites are spinning the news as "2,400 millionaires," although it can't be proven that each one of those people are individually worth at least $1 million. For example, they may be married to somebody worth that amount of money. Suffice it to say that there are many people who collect unemployment who likely are already in a far more favorable economic position than the majority of unemployed Americans of lesser means.
You Know Times are Bad When Folks Get Greedy Over Unemployment
Indeed, dwelling on the 2,400 "millionaires" obscures the greater economic potency of still-comfortable claimants of unemployment benefits who live in households earning $100,000 to $500,000. These "almost-millionaires" are costing unemployment programs nearly $8 billion a year, according to the Wall Street Journal. If unemployment is supposed to help tide a family over until gainful employment can be re-established, does a family with someone still earning $100,000 a year need those relatively paltry unemployment funds as much as a family with somebody earning $50,000, or even less?
Remember that unemployment insurance is something that is paid for by a person's employer, through taxes on their payroll from the state in which the employee is working, and payroll taxes from the federal government. Generally speaking, the United States Department of Labor administers the rules for unemployment programs, while individual states administer the payments. This means that unemployment insurance isn't something for which the employee personally pays out of their salary. Instead, it's another real cost, along with salary and any other benefits, that each employee represents for their employer.
Unemployment is intended to help maintain a certain semblance of stability in the event workers need to be terminated through no fault of their own. It gives employers additional flexibility when it comes to their need to adjust staffing levels downward, yet the financial benefits to the unemployed aren't good enough to encourage long-term joblessness. Unemployment checks are a fraction of a person's former take-home pay, they're taxable as income, and there are rules by which recipients must abide while they receive the benefit.
So for the right-wingers whose knee-jerk reaction to anything unemployment-related is to eliminate such a wasteful and apparently easily-abused entitlement program: don't get your knickers in a twist. Nobody's getting rich off of their unemployment benefits. Not even the people living in million-dollar-earning households.
After all, they're just getting what they're entitled. At least, that's what some people say. Their employers paid into the system for them, the same way they pay in for lowly clerks, so what's the fuss? They're entitled. It's not like any family, regardless of income, should be automatically expected to suffer through a loss of income after having established a certain lifestyle based on that income. Rich people have bills to pay, same as poor people. Only rich peoples' bills are generally considerably higher.
Is Altruism Too Expensive for the Unemployed Rich?
It would be nice if people who really didn't need unemployment benefits simply refused to claim them, even if they had every legal right to them. With unemployment being what it is, there's not a lot of slush in the fund into which employers continue to pay, since the number of employees for which they're paying continues to dwindle. Uncle Sam can step in and make up the difference if it has to, but it will just turn around and bill the states, which in turn will hike the rates they expect employers to pay. Which may force even more employers to think extra hard about how many employees they can afford. Which could lead to more layoffs, or at least forcing companies to freeze their hiring of new employees.
Like many things in government and business, unemployment taxes can be a vicious cycle.
The best solution to this problem - and yes, having people who should be able to afford to forgo unemployment benefits selfishly taking them anyway is a problem - is to plug the holes in our economic and political systems that are causing employers to hemorrhage jobs in the first place.
Until that happens, however, perhaps it would help to see some of the reality being exposed by the comparatively wealthy among us who still want more.
Some right-wingers prefer to assume that high-income people - and yes, salaries greater than $100,000 is legitimate high-income territory - naturally seek society's best interests by using money in ways that, while benefiting them personally, eventually raise all boats. Unemployment, however, doesn't represent enough money to be a significant boost to the economy. At least, not in comparison with the job or two that might be eliminated or deferred when an employer has to pay more in unemployment premiums and holds off on hiring.
Selfishness such as people in families earning more than $100,000 filing for unemployment insurance just because they can won't contribute much to our collective society. If you're expecting people at the lower end of the economic ladder to make sacrifices for the good of our country, what makes you think the example you're setting serves as any enticement for altruism? If you're out for all you can get, why do you blame people poorer than you for trying to get all they can?
"To whom much is given, much is required."
In the long run, couldn't the rich benefit from taking the high road when it comes to how they treat their own entitlements?