There's a big problem with the present unemployment system that I've heard very few people talk about - and that's the built-in, inherent disincentive for people to work... At least if your definition of "work" means, "do whatever you can because it's the "right thing to do" versus collecting any form of unemployment". I ran into this myself - let me explain:
The way UI works is that you're paid an amount based on what your income was prior to becoming unemployed. It's not a percentage per se, but it's more like tiers or brackets - if you earn from $X to $Y annually, you receive a certain amount. If you earned from $Y to $Z, you receive this other amount, etc. If you work or earn any money whatsoever during the period of your claim, that amount is deducted from the amount you receive. This is the problem, and before someone simply says "then people are inherently lazy" in thoughtless, Pavlovian manner I'll explain the conundrum that's created:
Let's say you had a job making oh, $110K to $130k a year and lost it (just hypothetically...
). Your UI payment would be (IIRC) something like $450 a week or $1,800 monthly as a "top tier" earner. Most people with so-called "good" jobs fall into this category (I think it's anything over about $50k a year puts you in this category). While this might sound like enough to do okay, also consider that's about $22K a year which is not exactly raking it in by anyone's standards. On top of this, you still must pay federal and state tax on it as income, so realistically you'll see around $18K-$20K a year. Probably enough to eat but after groceries, utilities (electricity, gas, water, trash, whatever else in your area), housing costs (huge percentage, depending on area), etc. it goes pretty fast. In my case personally, the amount paid my rent, electric, gas and phone but that's it. There was nothing left after that. My wife's paycheck (fortunately she still had one) paid the groceries, the costs of gasoline, any job-search-related travel I needed to do, etc.
So what's an industrious person to do? Well, when it happened to me, I said, "ahh whatever - I'll just go get a part time job waiting tables or tending bar or pouring coffees at the local Starbucks until I can find something commensurate with my abilities in my own field again". But here's the rub - doing any of those things (or even a combination of them) doesn't even give you Dollar #1 towards giving you any extra income until you earn past $450 a week, which is pretty tough to do working at a grocery store or a McDonalds or a Target (based on a 40-hour week, it would require you to make $11.25 an hour, which is far more than most of these places pay).
Also consider the intangible costs of doing this. While you might get the satisfaction of "earning your keep" or "trying to do the right thing", the reality is it takes a big toll on you. Working 40 hours a week (or more) at a McJob that has no future and isn't really in your line of expertise/training is a big drain on your time and your energy. It very quickly ends up getting looked at as a wasted expenditure of resources since the return on investment is so low. I had a hell of a time justifying spending that many hours to gain literally NOTHING in terms of extra money in my pocket when I could use those hours far more effectively looking for work in my own field, updating my resumes and qualifications statements and portfolios, networking with other professionals in my field, obtaining additional training and credentials in my field, etc. It's very, very difficult (I'd say it's actually not possible in many cases) to do any of those things with a 40-hour-a-week anchor around your neck that nets you exactly $0. It's time away from pursuits that actually bolster your standing within your own profession or field, to say nothing of time away from family. Is it really worth it just to give yourself some kind of bragging rights (i.e. "hey, look at me and how great I am - I made my situation harder on myself but I collected less from the UI system than that guy")?
At the end of the day, nobody cares. Frankly (as I see it) this is the entire point of having a UI system - so people CAN get good jobs in their fields again, not just take some crap job flipping burgers. That's why it is set up the way it is. It allows a good, skilled, trained person to not have to chuck that all just to chase a crappy paycheck, which ultimately benefits neither the person nor our society as a whole long-term.
There's another problem with this too - permanent resume damage. Again, even though you might be motivated and really want to "do the right thing" and be able to feel a sense of earning rather than taking, it can very likely hurt you rather than help you long-term. Five years down the road assuming things are more normal by then, how do you think a prospective employer might look at the following two (entirely hypothetical of course) resumes:
Sample #1:
- Two years as project manager
- Four years as senior project manager
- Three years as company VP
- Two years working as p/t sales associate at Wal-Mart
Sample #2:
- Two years as project manager
- Four years as senior project manager
- Three years as company VP
- Two years unemployed/self-employed (insert language about professional growth efforts, additional training, certifications and credentials obtained, etc. here)
Sure, an employer MIGHT look at Resume #1 and say, "that guy wants to work, whatever it takes and I can respect that" but the reality is most HR types would probably look at Resume #2 as the "better" candidate, committed to his/her profession and trend towards that person. Sorry, but that's how it works now. Most hiring decisions (except for very small businesses) are made by HR wonks with the full complement of convoluted logic that goes along with it. Unfortunately that's reality and you need to respond to it. So based on that, it's better to stay "in your field" even if you're not doing anything that pays than it is to just take a McJob.
Of course once UI runs out after 99 weeks, the rules of the game change - now there IS an incentive to go take even a "crap" job because it puts money in your pocket. However the long-term damage to your career progression is still there and someone down the road is bound to ask you on an interview (assuming you even get to that point, more likely your resume would be round-filed way before then), "why did you work at a position clearly below your abilities for so long rather than enhancing your qualifications in the area you're being considered for?"
Tough one to answer.
So as I see it, it's "best" to try to self-employ yourself/consult, take additional training, pound pavement, network and polish up resumes, etc. during your "off" time than it is to go get some crap job somewhere that won't even put Dollar #1 into your pocket for killing yourself 40 hours (or more) a week. Perverse? Perhaps, but that's our system. Having been through it, I actually don't find it perverse as long as it's not abused. It can be an enabler and allow people to get back on their feet and help prevent a short-term setback from morphing into a permanent one.
At the end of the day, people pay far more in taxes and contribute far more to society from positions of wealth than poverty - and if this means that society needs to "help them along" for a period of time until they can get back to being in a position of wealth, that's a good investment. A few tens of thousands in UI payments is more than offset by the tax contributions of a six-figure salary earner in very short order, to say nothing of the taxes that person pays through purchases, capital gains, etc.
Tell me again why people eligible for UI should be working at Starbucks again?