Jobs were the top issue in President Obama's State of the Union speech, and they should have been. But does anyone in Washington actually understand how unemployment affects a real person's life?
Congressional Democrats and Republicans have used unemployment as a political football for two years, even allowing unemployment benefits to expire for those who needed them while they argued over the terms of an extension. In the meantime people who receive unemployment were dealing with the reality that they weren't getting out of the system nearly what they put in, and very likely weren't getting enough to keep themselves afloat. I'll use myself as an example to explain:
The first thing you need to know about unemployment benefits is they aren't guaranteed to everyone. You only collect unemployment if you were previously employed full time; part-timers and those who were self-employed or had contract work usually don't qualify. Unemployment benefits are funded by money your former employer pays into a kind of insurance fund which pays off if you lose your gig. But that's the problem. Most people buy enough insurance to cover all their losses from an accident, flood or whatever else you're insuring against. You wouldn't insure a $45,000 car with a policy that'd only give you $20,000 in coverage.
With unemployment, typically the best you'll do is about a third of what had been your weekly pay. Raise your hand if you could pay all your bills with that.
This is how that worked out in my case: Until Dec. 31, my gross income was about $2700 each pay period. Here's what that state of Ohio approved under unemployment claims:
The top number, $470, represents what I'm eligible to receive each week (provided every week I go online and fill out a form that certifies I could work, I looked for work and didn't turn down any work that was offered to me). Do the math and you'll see that the weekly amount is about 14.7 percent of my previous salary. And I've got children. Luckily, I also have savings.
The bottom two numbers are the total unemployment benefit I'm eligible for and how much of that is remaining. That's right: the state is granting me a whopping 12 grand and change in unemployment benefits, of which I've got just about $11,000 left.
Oh, and one last thing: there's a "waiting week", akin to the NFL's bye weeks, where you're approved for benefits but don't get a payment at all. I found that out after calling the state unemployment office and holding for more than a half-hour to ask why I got money for the past two weeks but not the first week of the year.
|(Notice the $470 becomes $423 after taxes. Yes, they take taxes out of unemployment payments.)|
Which brings me back to the State of the Union speech. I don't believe President Obama has done a bad job on the economy and I'm not cynical enough to blame him for all the country's job losses or the fact those jobs haven't returned yet. The Reagan, Bush 41, Clinton and Bush 43 presidencies passed while the economy was being wrecked; it won't be fixed in two years.
Still, I think we need a New Rule here: No politician can give a speech about jobs until they've experienced the unemployment bureaucracy for at least one month.