Resources / Ripples & Wipeouts

Who’s on unemployment?  I don’t know.  No, I don’t know is on third.  Huh?

That’s a twist on the classic line from the famous Abbott and Costello routine, “Who’s on First.” Confusion ensues when players on a fictitious baseball team have names such as Who, What, I Don’t Know and Why.  (Click here for complete script.) So when Bud Abbott asked, “Who’s on first?” Lou Costello replied, “I don’t know,” because that was the name of the third baseman.  Why am I reminiscing about old vaudeville acts?  The confusion of this comedy routine reminds me of the roundabout world of unemployment insurance.  If someone asked today, “Who’s on unemployment?’ the foil might reply, “Men and women, white and blue collar, the wealthy and those less so,” and on and on.  The point is, today’s jobs are far more varied than in years past, as are work arrangements. 

The idea of unemployment insurance
When unemployment insurance was created more than 70 years ago, the typical unemployed worker was male, head of household, likely a laborer and unemployed due to lack of work.  Back then, when there was no work, there was really no work, as in no jobs.  Today, unemployed people are also known as independent contractors, freelancers, and consultants.  The “new economy” has reshaped work and created a new society of workers.  Web sites such as oDesk allow people to bid for jobs that can be done virtually; workers and employers never meet.

Unemployment benefits were designed as temporary stipends to sustain a family until work became available for its breadwinner, usually the father. UI will never fully replace wages, especially in today’s marketplace.  These days, UI should stand for Underemployment Insurance. 

The reality of UI now
Consider that in order to collect UI benefits today a recipient must be ready, willing and able to take a new job.  The following is directly from the glossary of terms on the UI website of the Department of Labor:

Engaged in any activity:
You are ineligible for unemployment insurance on any day in which you perform any services in employment or self-employment regardless of whether you are paid for these services.

The underlined part is the real kicker for me – “regardless of whether you are paid.” So if you volunteered your time to a local soup kitchen or donated your expertise in bookkeeping to a nonprofit organization or are doing anything other than sitting home waiting for the phone to ring you cannot claim UI benefits for that day.  Even the notion of sitting home by the phone is outdated.  You could take a call from a potential employer on your cell phone whether you’re on the beach, volunteering at your kid’s school or doing odd jobs to tide you over until work comes along.

Another oxymoronic requirement is that if you make just a dollar more in wages than the UI eligibility limit, you cannot claim UI benefits for that week.  So rather than helping you get back to your normal level of income – and productivity – the Department of Labor would rather you both work less and earn less.  Like so many social supports, UI is has not evolved with the times, but it must.

Prospects for reform
The argument for welfare reform was that the mechanics of the system encouraged people to avoid work and responsibility.  That seems to us a valid reason to consider a reform of the UI system too.  Why not reward people for being creative about finding work and ways to be productive, even when those ways are not traditional?  As it is, the current system actually pays people to stay un- or underemployed. 

Certainly, there are people who will try to exploit the loopholes of any system, but that shouldn’t mean that the rest of us have to pay the price.  As the old line goes, “If America can put a man on the moon, we ought to be able to figure out a sensible system of unemployment compensation.”

Otherwise, instead of asking, “who’s on first,” we’ll be saying, “hope and change struck out.”

-- Joan Grangenois-Thomas