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Friday, August 13, 2010

Insurance is Not Welfare

Those who want to dismantle social insurance programs use the word "welfare" frequently as a way to make people think that the programs take from the worthy and reward the unworthy. For this reason, when thinking about social insurance programs, it's important to keep the distinction between insurance and welfare in mind -- they are not the same (see, for example, Fire Insurance is not Welfare and Neither is Social Security, something I wrote during the last round of the Social Security wars, or this which makes the same point; also, I should probably note somewhere that even if a tax to fund these programs is paid by the employer, the incidence still falls partly -- mostly for unemployment compensation according to the work I'm aware of -- on wages):

Unemployed Man Reacts To Gingrich’s Accusation That ‘Welfare’ Is Making Him Lazy: I Paid Into It For 35 Years, Think Progress: Time and time again, conservatives have claimed that extending unemployment benefits for the unemployed is breeding laziness and lack of productivity. Newt Gingrich was the latest to adopt this meme. Writing in an e-mail to supporters, Gingrich cited a Wall Street Journal story where unemployed 52-year-old mechanic Michael Hatchell explained that he couldn’t afford to take jobs that wouldn’t pay enough to take care of his family. Gingrich claimed “welfare” was keeping Hatchell from working.

Last night, Hatchell and his wife Sarah appeared on MSNBC’s Countdown With Keith Olbermann to explain his family’s circumstances in his own words. ... He ... took offense at Gingrich’s use of the word “welfare” to slur his taking of unemployment insurance, pointing out that he worked for 35 years, paying into unemployment insurance, and that he was simply taking money out of a fund that he worked hard to pay into:

OLBERMANN: You’re a 52 years old now former law enforcement officer, used to have your own business as a mechanic, you were unemployed for 59 weeks [...] and Mr. Gingrich suggests you got used to being unproductive. If that’s not true why did you turn down so many job offers?

HATCHELL: Keith, it’s really hard for someone like Mr. Gingrich to understand the fact that when you have a mortgage, you have a family to support, car payments, insurance everything else [...] if you’re going out to look for a job, jobs that were going to pay half of what I was making, when they were offering me these jobs and [...] this is going to be a situation where we’re going to start you out at the entry level wage, I’ve got 32 years of experience, in the automotive business, it’s kinda hard for me to do that. Even at 40 hours at 7.75 an hour [...] With a mortgage and everything else, yes I was drawing unemployment 475 dollars a week, I paid into since I was a young man, 35 years I actually paid into it. It’s unemployment insurance, not welfare that Mr. Gingrich has spoken about. Until such time I can get a gainful job that will let me keep my house, keep my family fed, not necessarily anything expensive, I wasn’t going to take any other job.

OLBERMANN: He seemed to leave out the idea that it is insurance and you did pay into it. Pay now and don’t get it later! If you had taken those lower paying jobs your family would be considerably worse now than it actually is.

HATCHELL: Yes sir, with the mortgage payments, if you don’t pay your mortgage, you’ll be out on the street [...] When I did find a situation where I did have it better off, I took it.

OLBERMANN: Sarah, let me ask you something. Can you weigh in on how you reacted when we brought Gingrich’s remarks to your attention today?

SARAH HATCHELL: I was appalled, frankly that he would consider welfare into unemployment insurance.

...Unfortunately, Gingrich isn’t the only one picking on Hatchell for doing what’s best for his family. Last night, Fox host Glenn Beck lamented Hatchell’s choice to take the unemployment insurance he has paid into for 35 years: “He chose to take the government handout. People are choosing to be dependent on the government — over picking themselves up and taking less and resetting and starting all over again.”

Update It is important to remember that even though Gingrich complains about "welfare," when he was Speaker of the House he directed more federal money to his district than any other suburban district outside of Arlington, Virginia, and the Kennedy Space Center.

    Posted by on Friday, August 13, 2010 at 11:52 AM in Economics, Politics, Social Insurance | Permalink  Comments (98)


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