Confessions of a Laid-off Lawyer

Just Your Average Joe Blogging Away His Debt—In One Year or Less

Benefits They Call Them

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Total Black: $136.66
Total Red: $227,685.50

Unemployment benefits are a funny thing.  Until a few moments ago, I thought we paid for unemployment through payroll taxes.  We don’t.  According to the New York State Department of Labor, “Unemployment insurance is temporary income for eligible workers who become unemployed through no fault of their own and who are ready, willing, and able to work.  You must have sufficient work and wages in covered employment.  In New York State, the money for unemployment insurance benefits comes from taxes paid by employers.  No deductions are ever made from a worker’s paycheck for unemployment insurance.”  Here I thought unemployment benefits were like social security disability benefits, and just as Binder & Binder reminded me, I needn’t feel ashamed to claim them because I’ve earned them.  Alas, it’s not true.

It does feel good to be employed again.  I found myself laughing and joking with people today.  Pretty nice.  What’s not so nice though is the ten days or so that I’ll have to go without money before I get paid again.  See, in New York, for every day you work, 25% of your unemployment benefits are cut.  No matter the length of hours you work or how much you’re paid.  So, if I worked two hours helping a friend move apartments, and he paid me thirty dollars, I’d be obligated to report it—and I’d lose 25% of my weekly unemployment benefits, or approximately one-hundred dollars.  I’d earn thirty and lose one-hundred.  Great system, right?  Pretty lousy incentive to get people out there looking for work.

For months now I’ve toyed with getting a part-time job.  According to the United States Department of Labor, minimum wage in New York is $7.25.  Despite diligent searching, I’ve not been able to determine whether minimum wage is higher in New York City.  I’d assume so.  But then again, I would have assumed that about unemployment benefits.  It’s not.  No consideration is given to cost of living in New York City being vastly different from cost of living in Rochester or Syracuse.  Instead, how much you’re eligible to earn is set by your prior year’s annual income.  So, whether you live in Oswego, New York or Woodstock, New York, or New York, New York—the maximum amount you can receive per week is $405 (including a weekly $25 addition from the federal stimulus package).  Thus, my weekly unemployment benefits—before federal taxes, of course—is $405.  Let’s say I took a part-time job at Starbucks.  I’d have to work fourteen hours at $7.25 an hour to earn roughly the same amount I’d lose in unemployment benefits ($101.50 = 14hrs x $7.25).  That’s before taxes as well.  Ludicrous.  Why?  Who would do that?

I worked in a local supermarket throughout most of high school.  I remember the looks and glances and the whispers when people with food stamps would come though the check-out line.  I even recall hearing about one lady who customers and other cashiers claimed kept having children in order to get more welfare money.  Even back then I had difficulty believing such bald assertions.  Now, sadly, I’m not so sure.  The system is broken.  A system that penalizes me for getting out there and trying to—as conservatives like to say—pick myself up by my bootstraps is asinine.  Why not give people a set period of time to collect unemployment.  They use it as they see fit.  Once it’s depleted, you have to work again to refill your unemployment account.  Such a financial cushion could soften the blow of unemployment.  And, as they make their way back into the working world, that cushion would fade.  Instead, if you work at all, it’s ripped out from under you.  How is that not like a penalty?

This Wednesday I won’t get paid weekly unemployment benefits because I worked two days last week (Thursday and Friday) and those two days earned me more than $405 for the week.  Instead, I’ll be waiting for the new company’s payroll to process.  Quite often that takes a while.  I wonder what the legislature thinks families in similar situations are supposed to do in the meantime?  Eat cake?


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