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Saturday, January 07, 2012

"An Appalling Idea"

If Republicans get their way, collecting unemployment insurance will be much harder for many workers:

An Appalling Idea, Even by Washington Standards, CBPP: For legislation to extend the payroll tax cut through the end of 2012, House Republicans are expected to push for a provision on unemployment insurance (UI) that is appalling even by current Washington standards. Neither President Obama nor Congress should accept any payroll-tax legislation that includes it. Here’s why:
The provision, part of a full-year payroll-tax bill that the House passed in December, would deny UI benefits to any worker who lacks a high school diploma or GED and is not enrolled in classes to get one or the other — regardless of how long the person worked or whether he or she has access to adult education, which itself has been subject to significant budget cuts in the past few years and is heavily oversubscribed.
The proposal would deny UI benefits to hundreds of thousands of workers — many of them middle-aged — who have worked hard, played by the rules, and effectively paid UI taxes for years and who then were laid off due to no fault of their own. ...
Older workers would be hit the hardest. Nearly half (47 percent) of UI recipients with less than a high school education or the equivalent are over age 45... In 2010, half a million workers age 50 or over who received UI lacked a high school diploma. By contrast, less than one-fifth of UI recipients without a high school diploma or the equivalent are under age 30.
For most of these individuals, who may have worked for 30 years or more, returning to high school makes little sense. And adult education, even when it might be useful because the workers are younger, very often isn’t available due in part to federal and state budget cuts.
Virtually every state had waiting lists in local adult education programs in 2009-2010, according to the most recent survey, and the number of people on waiting lists doubled just between 2008 and 2009-2010. Furthermore, the shortage of adult education slots has almost certainly grown significantly since 2009-2010 because of substantial budget cuts in adult education since then. ...
The proposal ... would allow people without a high school diploma or GED to receive benefits only if they enroll in classes for which there often would be no slots available — in part because of budget cuts approved by some of the same policymakers who now embrace this new requirement.
President Obama and lawmakers of both parties face a crucial test. They claim to care about average Americans who are trying to find work in an economy that still struggles to create jobs. If they give in to House Republicans and agree to this provision as part of a final package on the payroll tax cut, their claims will ring thin — and they will deserve the strong criticism that will come their way.

If all that is required is to enroll and benefits end before enough credits are accumulated to graduate, how much effort do you think these students will put into their classes (and if there is a GPA requirement, e.g. you cannot get an F, many will do just enough to meet the requirement, and no more)? Students who have no interest in being in adult education classes, no interest in learning, will crowd out students who want to be there (and being in school doesn't help much with job search). How is that better? If there was excess capacity in the system, they could enroll without displacing someone else. But that's not the situation right now, and if Republicans have their way with budgets, that's unlikely to change (and even if it was the situation, I'd still object to making obtaining a degree a condition for receiving unemployment insurance). I suppose we could get a bunch of private schools offering an easy way to satisfy the requirement in exchange for some of the money the unemployed receive through unemployment insurance (guaranteed to pass or your money back!), but degree mills popping up to collect money from the unemployed -- money they very much need -- is not a very desirable outcome (and if the government pays for the classes, the incentives are even worse).

    Posted by on Saturday, January 7, 2012 at 01:08 AM in Economics, Social Insurance, Unemployment | Permalink  Comments (96)


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