I read a thought provoking article in CNN Money this morning about how some states are limiting the unemployment benefits they pay to seasonal workers. Federal law already prohibits professional athletes from collecting unemployment benefits between seasons, and teachers from collecting unemployment benefits during the summer. After that, the federal law leaves most eligibility rules up to the states.
Until recently most states allowed seasonal employees to collect unemployment benefits during the months when they were unemployed. For example, school bus drivers, cafeteria workers, janitors, and many other school employees know they will be unemployed during the summer months. This extends into the arts as well; many actors, stagehands, musicians, and similar entertainment professions are routinely out of work between seasons. Other examples of seasonal workers include construction, hospitality and toursits industries, etc.
Now some states are citing insolvent unemployment insurance funds as a reason for cutting eligibility for these benefits. Unemployment rates ahve simply been too high for too long, and many states have run out of money to pay out on unemployment insurance.
There are currently 15 states that limit unemployment benefits to seasonal workers, and several more states have legislation in work to limit benefits, or have commissioned studies to determine the impact this would have.
Is it Fair to Cut Unemployment for Seasonal Workers?
Before we answer this question, it will be helpful to take a look at what unemployment insurance is, what it is designed to do, and who pays for it. Then we can better answer the question. Let’s start at the source:
Contrary to popular belief, individuals don’t pay unemployment insurance taxes. Employers and the federal government pay into the unemployment system, and the states handle the distributions (which is why they often have a little more say on who is eligible).
Unemployment benefits are more or less a safety net – they exist to help people through tough times when they lose their job. Workers are usually eligible to receive unemployment benefits when they lose their job through no fault of their own (there are some rules regarding eligibility, such as those listed for teachers, professional athletes, and some other cases).
These benefits aren’t designed to replace full-time income (most benefits are capped at a few hundred dollars per week, depending on your income going into unemployment). Instead, they are designed to help people get by until they can find another source of income. There is also a time limit – usually 26 weeks, depending on the state (some states have extensions depending on how high their unemployment rate is).
To continue receiving unemployment insurance benefits, recipients must be able to prove they are actively seeking employment. This is usually done by sending in a list of jobs they have applied to, or places where they have submitted their resume.
So now to answer the question – is cutting benefits to seasonal employees fair?
I understand both sides of the fence on this debate. I received unemployment benefits when I left the military. It wasn’t fun, and I didn’t like the idea that I needed it. But in the end, I realized that is what it was for, and it was helpful as it took me six months to land a job. But I also see where states are coming from. Unemployment benefits are a finite resource, and with a sputtering economy, states need to decide how best to use their limited funds. In this case, I can see why they would choose to prohibit seasonal workers from receiving benefits.
The other factor at play is that many of these workers aren’t unemployed in the traditional sense – they are simply on hiatus. Many of these workers have jobs they will be coming back to; they simply aren’t working at the time. Many of them don’t have any incentive to find work while they are receiving unemployment benefits because they know they will collect it for a few months, then they will go back to their previous job. That doesn’t fit within either the spirit of the law, or the law itself, as people who are receiving unemployment benefits must actively seek employment.
This makes it easy for many people to use unemployment insurance benefits as an income supplement subsidized by taxpayers. And I don’t agre with that.
But I don’t think workers who truly need help should be shut off completely. For example, states such as Massachusetts, Colorado and Pennsylvania don’t allow seasonal workers to collect unemployment benefits unless they are laid off during their normal working season – for example, a school bus driver laid off during the school year, or a white water raft guide laid of during the summer rafting season. There are other benefits out there, such as food stamps, welfare, WIC, etc.
In the end, I see both sides of the argument, but no clear cut or easy solutions.
What are your thoughts on giving unemployment benefits to seasonal workers?
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