The American Dilemma and How We Can Fix It



Only those who are sadistic in nature could possibly take pleasure in the suffering of others. When I was a child, I did know one little boy who enjoyed pulling the wings off flies. But he subsequently went to reform school and I don’t think I’ve encountered anyone else with his mindset since then.

Of course, the newspapers are filled with accounts of people who commit atrocities against animals, children, and other adults. Sometimes we call these activities crimes – other times we call them wars. Once we called it 9/11. That many of us are violent, unfeeling and uncaring is unfortunately quite clear.

Much of the protest movement is focused on the “evildoers” who are business leaders. I spoke with one of the participants in a local “occupy rally” which occurred several months ago. This individual cited the business community’s opposition to yet another extension of Unemployment Benefits as an example of the pervasiveness of greed and lack of feeling on the part of business leaders.

As she put it, “I paid into this. I can’t get a job. Why shouldn’t I be able to collect?”

Although I’m sure she didn’t believe me, I explained to her that, contrary to her opinion, one shared by many – she never paid a cent into Unemployment Insurance. It is a contribution borne solely by her employer. Many in the work force believe that their FICA contribution is used to pay unemployment benefits. It isn’t.

Each employer makes two separate contributions to the Unemployment Fund – one to the state in which the worker lives (UIC) and one to the Federal Government (FUTA). If payments to the state are made in a timely manner, then the company receives a credit on their Federal return – but there is still always an additional contribution due.

The rate paid to each state is determined by the employer’s “experience rating” within that state. This is a ratio of the amount of claims (those workers who were on the employer’s payroll and are receiving benefits) versus the total amount of payroll that the company reported for all its covered workers. The higher the amount of the claims, the higher the rate of contribution that a company is required to pay.

When I was an employer, I always fought fraudulent unemployment claims when a former employee filed – and I always allowed those who had a legitimate claim to move forward so that employee could collect the benefit. Although fighting a claim was a laborious process – usually requiring my attendance at a hearing – I did so for two reasons.

The first was that I didn’t believe people who had exhibited bad behavior when they were in my employment should be rewarded for that by “the system.” The second was that if people received benefits who weren’t entitled to them, there would be less available in the fund for those who were legitimately due those benefits.

During many years in business I attended over one hundred such hearings and only lost two of them. Despite the fact that the Unemployment Insurance Department seemed more disposed to side with the terminated employee, I was able to provide sufficient documentation to win these disputes.

There was one event, early on in my business career which caused me to formulate my approach to Unemployment Insurance. It was a bus ride.

When I first started out, it was too expensive for me to park downtown so I took the bus to work. It was only about a twenty minute ride and I rather enjoyed not having to compete with traffic. In addition, the bus left me off about a mile from the office so it provided me with a little exercise.

One evening as I was returning home, I boarded the Jeffrey Express as usual. I found a window seat behind two young ladies and the bus began on its route down State Street before turning on to Lake Shore Drive.

The young woman in the aisle seat asked her friend if she could read the street number on one of the businesses we were passing. Her friend told her the number and the first young woman wrote it down on a form she was completing. Her companion in the window seat asked her what she was doing.

“I’m filling out my Unemployment Form. They make you do this every two weeks or you don’t get any more checks. So I write down these businesses and their address and say that I interviewed there but they didn’t have any work. When I get home I look their number up in the phone book and then call to find out who the manager is so I can write down their name on the form. Unemployment never checks this out.”

There may be some few people reading this who think that the Unemployment Insurance Department’s requirement that this woman fill out a form was an invasion of her privacy. They probably think that we should just hand over the money – no questions asked. For the rest of the 99% of us, I believe it fair to say that we would consider her actions as fraudulent.

There is a legitimate debate which has been raised regarding unemployment compensation and its continuing extensions. Are we actually helping those who are unemployed in finding work by continuing these benefits? Or are we providing a dis-incentive by continuing them – thus deferring their motivation in seeking new jobs?

To be honest, I don’t know the answer to that question. But I do know that until we get serious job creation programs out of either the Congress or White House and not the fluff and nonsense that has been proposed, that question will be one that is ongoing.

There is one thing that I do know. I would like to see “The Unemployment Bus” retired from service.

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