Unemployment insurance (UI) is an essential part of the American social safety net. UI gives laid-off workers time to find or retrain for a new job while ensuring their purchasing power (this is especially important during economic downturns). The federal government first established nation wide coverage with the Social Security Act of 1935. Under this system states play a crucial role, jointly financing and administering the program with the federal government. Generally, benefits last a total of 26 weeks. During recessions extensions are typically issued, although conservatives often attempt to block the legislation.
Cry Wolf Quotes
[The bill] tends to retard the increase of pay rolls, because of the absorption of this amount of money for taxation purposes; it retards the increase of employment also. It is a permanent tax, with no limit, regardless of economic conditions in general or of the individual company. In other words, it may be the last straw, as I said before, that puts this company over the line into bankruptcy.
The fact is that one of the reasons why our business leaders, large and small and in almost every kind of business, are fearful of the future is because of the well-defined campaign of a very few people to foist upon this country a complete scheme of compulsory social insurance. The little group—and it is astonishingly small in numbers, though tremendously vocal—is largely of foreign origin, a substantial part of the advocates of this system coming from Germany and from countries lying further east.
It would result in further and unnecessary intrusion of the Government into the domain of private enterprise, thus aggravating the hardships which have already been caused industry by extensive government regulations, restrictions, and competition.
It [this bill] would increase unemployment by aggravating the very conditions which it is attempting to correct, by crippling the agencies which furnish opportunities for employment, by discouraging efforts to relieve unemployment, and by placing a premium on idleness.
Related Laws and Rules
San Francisco Fed Finds Unemployment Insurance Doesn't Significantly Contribute to Unemployment Levels
Unemployment insurance doesn't encourage people to stay jobless.
Moody’s Analytics Advocates Unemployment Insurance as Stimulus
For every $1 spent on unemployment benefits, GDP increases by $1.61.
Congressional Budget Office Says Unemployment Benefits Have Strongest Stimulative Effect
Unemployment benefits make macroeconomic sense during a recession.
Backgrounders & Briefs
By Elizabeth Tandy Shermer, PhD, February 2010
Unemployment insurance benefits – including their length, eligibility, and expense – are again in the spotlight. The arguments are hardly new.
Center for Economic and Policy Research (CEPR) is a progressive think tank that concentrates on social and economic policy, both domestic and international.
The National Employment Law Project is an organization that promotes economically just public policy in the face of the prevailing trends of the law several decades.