is unemployment insurance the new welfare?
If you listen to the US Congress, unemployment insurance is becoming the new welfare.
Orrin Hatch today dropped an amendment that would require states to test applicants for cash assistance (TANF) and unemployment insurance for illegal drugs before they could be approved for benefits. We’re used to dealing with this sort of stupidity in the TANF program, but I have to admit that I was surprised to see this applied to unemployment insurance as well. At least Hatch is honest enough to admit that testing all these people would cost far more than the value of any benefits it might save — when this comes up at the state level, legislators are constantly surprised to learn that it doesn’t save money.
This proposal isn’t likely to go anywhere, but meanwhile the Senate is dropping the COBRA subsidy for health insurance for the unemployed as well as the $25 a week additional federal benefits from the UI extension bill. And almost no one is talking about continuing benefits for the “99-ers” those who have exhausted 99 weeks of unemployment insurance.
My theory is that people are terrified by the notion that you could do nothing wrong, be a good worker, lose your job, search hard for another one, and still be unemployed after two years. They don’t want to believe that they live in a country where it could happen, and they don’t want to believe that it could happen to them, or to their friends or family. And we’ve got this really weird dynamic of unemployment right now, where unemployment is really high but no longer climbing, nearly half of the unemployed have been out of work for more than 27 weeks, but at this point if you’ve got a job, your odds of being laid off are pretty low.
So people are convincing themselves that the long-term unemployed must have done something wrong. They must not really be looking, or they’re too picky, or they’re not willing to move to where the jobs are, or something. And so it’s ok to cut them off, because they deserve it.
Update: Nancy Folbre just said almost the exact same thing in the New York Times today, except she’s an economist, so she used bigger words.