Nobody Should Get "Unemployment" Payouts
We self-employed people don't get a bunch of money handed to us if we lose a client. Nobody should get this money. And it shouldn't be demanded from employers:
Ari Armstrong writes at TOS that government unemployment "insurance" isn't insurance; it's force:
Despite Barack Obama's blather to the contrary, government payments to the unemployed are not "insurance."Real insurance is a financial instrument voluntarily sold and purchased on a free market for the purpose of spreading risks, with the benefits defined by contract. For example, we know that some people's houses will burn down, but we don't know whose; therefore, most of us who own houses purchase home insurance that covers (among other things) destruction by fire.
Although government unemployment welfare has substantially throttled the need for and value of private insurance, some private insurance is still available. For example, people can purchase unemployment insurance to supplement government payments; consumers may purchase credit insurance to cover payments on debts during times of unemployment; and people may purchase private disability insurance to cover unemployment (my wife has this sort of insurance). Some people choose to protect themselves from the costs of unemployment simply by saving money ahead of time. In a market free from government force, insurance companies and other businesses would offer many additional options.
Government payments to the unemployed are not insurance. The so-called customers do not willingly pay for it; rather, government takes the money by force. Most government unemployment funds are confiscated from business owners--a violation of their rights (which makes it harder for business owners to hire people or increase wages).
Private unemployment insurance? Don Boudreaux writes at Cafe Hayek:
Private unemployment insurance was offered long before the New Deal. As Professor Michael Rappaport found, starting around 1910 companies began selling such insurance to railroad workers. Alas, seeking to offer such coverage to other workers, private insurers were consistently blocked by state governments. And when New York's legislature in 1931 finally approved the expansion of private unemployment insurance, the bill was vetoed by none other than Gov. Franklin Roosevelt.
As with medical insurance, I distrust private insurance. Private insurers are not motivated by the goodness of their hearts to help people in their time of need. Like all businesses, they're there for one purpose: to make money. They have offices dedicated to the sole purpose of finding ways to deny you your claim.
I can just see what would happen if unemployment insurance was solely in the hands of private insurers. "What's this? You were counseled eight months ago for arriving to work late? Substantial fault! No benefits for thirteen weeks!"
I have a problem when people are denied coverage for frivolous reasons while the CEO's of these same insurers are multi-gazillionaires.
The government took over medical insurance because that's how the government operates, for good or ill. The complaints were pouring in because of abuses by private insurance, such as dropping loyal customers merely because their claims got to cost too much money (in the objective opinions of the insurers, of course).
So the government stepped in and confiscated. Like a parent with a misbehaving child. You hit your sister with the ball, so we're taking the ball away.
Yes, it's nannyish. It might even be class warfare, to borrow Sean Hannity's, er, I mean Conan's favorite term. But whatever you think of the government's decision to intervene, I really have no problem paying taxes to take care of you if you get sick, Amy. If every newspaper suddenly dropped you and your books do poorly in sales, I'm all for paying taxes to provide you with enough to cover your basic needs until your fortunes reverse themselves.
With all the appalling things our government spends money on, it seems so ridiculous to become outraged over the government taking care its citizenry when it needs the help.
Patrick at January 14, 2014 3:37 AM
Yet I can and do have private disability insurance, even in New York.
MarkD at January 14, 2014 4:03 AM
"What's this? You were counseled eight months ago for arriving to work late? Substantial fault! No benefits for thirteen weeks!"
Guess what, Patrick? that is called being fired for cause. Guess what? you don't get the government provided unemployment benefits if you're fired for cause.
Maybe you shouldn't be so trusting of the government? because if the government can giveth, it can also taketh away.
I R A Darth Aggie at January 14, 2014 6:19 AM
"Private insurers are not motivated by the goodness of their hearts to help people in their time of need."
As opposed to government employees, who are always pure of heart and are never power-mad or just lazy, Just like the wonderful DMV.
"So the government stepped in and confiscated. " Well, at least you admit that that's what it is: confiscation. (1) We're not children, goddamnit. We don't need Mommy stepping to make us play nice. (2) If the government can confiscate any time it wants, what's the motivation to build anything? Why bother if the government is just going to take it away from you?
"If every newspaper suddenly dropped you and your books do poorly in sales, I'm all for paying taxes to provide you with enough to cover your basic needs until your fortunes reverse themselves. "
And when said taxes reach such a high percentage of your gross income that it's more cost effective for you to go on welfare yourself, then what? Who pays for you? What if they decide to go on welfare too? Where was that Scrooge McDuck Money Bin again?
Cousin Dave at January 14, 2014 6:48 AM
"Nobody should get unemployment"
I'd agree if they would agree to stop stealing from my pay to finance such crap.
But, since they already take it without my permission I do WANT the unemployment payouts, etc.
Force me to play your game I will try to play it to MY advantage then.
Charles at January 14, 2014 8:19 AM
Looks like most people have come to expect a payout, but I'm getting pretty tired of the steady media drumbeat to *extend* that payout forever and ever! Every day, some sad sack story is trotted out, nationally and locally...just why does the media think it's their job to advocate for these people?
Inevitably the person's story is full of stupid - people past full retirement age, or enrolled in grad school in their late 50s or entertaining some other pipe dream. Don't the reporters know any honest down-and-outers?
I suspect the media are hurting for easy human interest stories, but I resent the role they play in keeping the sense of entitlement alive year after year.
carol at January 14, 2014 8:55 AM
Ever notice how many people get a job just as their unemployment is about to run out?
Lori at January 14, 2014 9:20 AM
Back in the bad old days, people saved their own money for these types of contingencies.
For similar reasons, they also didn't carry around credit card debt and would have laughed you out of the room at the idea of spending thirty years paying off a house.
As you can see, the illusion of a safety net has CLEARLY improved people's financial sense.
Pirate Jo at January 14, 2014 9:22 AM
"I don't mind
stealing bread
from the mouths of decadence...
"But I can't feed on the powerless
when my cup's already over-filled..."
(earworm, for those who know...)
Flynne at January 14, 2014 10:25 AM
Cousin Dave: As opposed to government employees, who are always pure of heart and are never power-mad or just lazy, Just like the wonderful DMV.
Didn't say they were. On the other hand, they're motivated to keep their jobs and justify their usefulness. If a private insurer avoids paying out, that's more money they get to keep. There is an incentive not to pay you.
Whether the government employee pays out or not, his check stays the same. He has no immediate incentive to avoid paying out nor to drop you from the program should your healthcare prove too expensive.
Private insurers cannot say that.
Cousin Dave: "So the government stepped in and confiscated. " Well, at least you admit that that's what it is: confiscation. (1) We're not children, goddamnit. We don't need Mommy stepping to make us play nice.
Obviously someone has to. Insurance companies blew it. We now know the system doesn't work. The government came in and confiscated the toy because they weren't playing nice.
I R A Darth Aggie: Guess what, Patrick? that is called being fired for cause. Guess what? you don't get the government provided unemployment benefits if you're fired for cause.
Whooooooosh! The point I was making that is that being counseled for something eight months ago, and not since then, is unlikely considered to be a cause for a layoff eight months later.
The point was that if unemployment insurance were entirely private, that's what would happen. They would scrape the bottom of the barrel looking for something, anything, no matter how irrelevant, to construe as justification to blame the employee for his own layoff, even if the employer itself might submit "layoff," rather than "termination." That's how it works with private medical insurance. That's how it would work with private unemployment insurance.
Patrick at January 14, 2014 12:05 PM
"Didn't say they were. On the other hand, they're motivated to keep their jobs and justify their usefulness. If a private insurer avoids paying out, that's more money they get to keep. There is an incentive not to pay you."
Believe me, having been a government employee, they are extremely hard to fire. And their perception of what "their job is" is what their rater thinks their job is, and not what you the customer thinks their job is.
You also dont understand how unemployment insurance works. Private employers pay into it. They don't get to "keep the money" they dont pay out. The states administer it. Each state has their own rules, some extremely liberal, and other states, very difficult, for people to collect.
Most states, even if you are fired for cause, you can collect. You just can't collect if you quit.
The feds have been funding the states to extend benefits for longer than state law allows.
There is nothing wrong with the program as it was originally conceived, but no one thought the feds would be willing to print money to turn it into a form of welfare.
And "disability insurance" wont necessarily help you if you are fired.
Most of those types of private disability insurance pay out if you cannot work, due to an accident or illness. They certainly would not cover you if you "quit" a job, and might not cover you if you were fired for cause. Too easy to scam being fired for cause, like slapping the boss, when,you are tired of going to work.
Isab at January 14, 2014 2:48 PM
"I can just see what would happen if unemployment insurance was solely in the hands of private insurers."
Really? There are no consumer protection laws in this country?
How is that Obamacare costing you? I seem to have missed anything of yours that supports it. The last thing I saw was your protest about the cost calculator.
All will please notice that my idea, for a "medical visa card", completely disposes of "insurance" shenanigans.
YOU SHOULD NOT PAY FOR A SERVICE YOU DID NOT RECEIVE.
Radwaste at January 14, 2014 3:51 PM
Why did they "blow it"?
Because they couldn't make a risk pool across state lines?
They had to not insure for $9 contraceptives in Utah but had to in Georgia?
They had to cover reconstructive breast surgery for a third of the states and offer it as a rider in the rest?
Because in many states the insured couldn't decline coverage whether they needed it or not? (Lesbian/Gay couple declining maternity options.)
Insurance companies not allwoed to tie a deductible to a Health Savings Account?
The health savings accounts not promoted by the governments, if not actively discouraged?
Somehow you are laying blame at the foot of the health insurance companies.
Do you also lay blame for your car insurance rates at the foot of the car insurance companies? But somehow Progressive, GEICO, Allstate, etc. can issue you a policy in all 50 states that is coming from the same company.
Same with home insurance. Same with life insurance.
So stop whining and deal with facts.
Jim P. at January 14, 2014 6:04 PM
"On the other hand, they're motivated to keep their jobs and justify their usefulness. "
Really now. We're talking about civil service. I've worked around civil service a lot in my career. They cannot be fired for job performance, no matter what. They have extremely powerful unions, so powerful that they can compel the government to break contracts with third parties if something about the contract pisses the union off.
Civil service employees have no motivation, other than their own sense or morality, to "make themselves useful". Civil service employees don't have to do a damn thing on any given day if they don't feel like it. I've known good, dedicated and hard-working government employees. I've also known slugs who, when they arrive in the morning, get someone's copy of the newspaper, photocopy the crossword puzzle, and then spend the day working it. If you need anything from them, they're busy and they might get to it tomorrow, maybe. No promises. That guy, and the contracting officer who stays late to finish a work breakdown structure for an RFP -- they get paid the same.
Further, a lot of people get into government work because they are attracted to power. Once they have power, their job is to use it as they see fit. That DMV employee who is jerking you around? They do it because they can. They have power; you don't, and they are going to demonstrate to you who the boss is.
But the absolute worst are the do-gooders. They know what's best for you, and you are going to do what they want you to do no matter what. They tolerate no back-talk from the subjects. They can engage in the absolute worst of tyrannies and go to sleep at night with a clear conscience. Because they know in their hearts that they belong to a superior class of human being. And government is chock-full of them.
Cousin Dave at January 15, 2014 7:56 AM
But the absolute worst are the do-gooders. They know what's best for you, and you are going to do what they want you to do no matter what. They tolerate no back-talk from the subjects. They can engage in the absolute worst of tyrannies and go to sleep at night with a clear conscience. Because they know in their hearts that they belong to a superior class of human being. And government is chock-full of them.
Posted by: Cousin Dave at January 15, 2014 7:56 AM
Oh God yes! Cousin Dave, and to top it off, most of them are dumber than a freakin doorbell.
Isab at January 15, 2014 2:17 PM
Actually a doorbell makes some sense. How about dumber than someone selling ice cubes at the Harbin Internatoinal Ice and Snow Festival?
Jim P. at January 15, 2014 9:59 PM
Cousin Dave: Really now. We're talking about civil service. I've worked around civil service a lot in my career. They cannot be fired for job performance, no matter what. They have extremely powerful unions, so powerful that they can compel the government to break contracts with third parties if something about the contract pisses the union off.
Even if true, it's still a damned sight better than someone who is just plain motivated by greed and a burning not to pay you.
I certainly hope that neither your nor anyone you love ever has an affliction so costly that your insurance company just decides to drop you. Cause CEO just can't be a gazillionaire if he keeps worrying about people with costly medical procedures. Because insurance companies can do that, they would do that without even a twinge of regret, and they do.
And what could you do it about? Not a goddamned thing.
Patrick at January 16, 2014 12:50 PM
Actually you can if you are paying personally. It's called breach of contract and contract law is subject to courts.
But why are you so insistent that the government is better at doing things? I really would like you to name the things that are done better by a government agency than by a private organization.
Jim P. at January 16, 2014 8:27 PM
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