Filed under: Personal Finance, News
Despite the government's claim that the recession technically ended in the Summer of 2009, anyone with half a brain can read most leading economic indicators and tell you we're hardly out the woods yet. Among those harrowing figures is the weekly new claims for jobless benefits, which was down to about 445,000 claims last week. That's trending in the right direction, but it still means roughly a half a million people filed for unemployment for the first time. No matter how you spin that, it's not a good thing.
While many pundits claim that unemployment is a safety net that steals from the productive rich to give to the comparatively non-productive poor, rich people are also eligible for employment benefits. And you might be surprised at just how many of them take advantage of this entitlement:
After the economy slipped into recession in 2008, millions of Americans received unemployment benefits to make ends meet -- including almost 3,000 millionaires.According to U.S. Internal Revenue Service data, 2,840 households reporting at least $1 million in income on their tax returns that year also collected a total of $18.6 million in jobless aid. They included 806 taxpayers with incomes over $2 million and 17 with incomes in excess of $10 million. In all, multimillionaires reported receiving $5.2 million in jobless benefits.
Those numbers are a minuscule fraction of the 9.5 million taxpayers who reported receiving $43.7 billion from jobless benefits in 2008, up from 7.6 million recipients reporting $29.4 billion in benefits in 2007. Still, economists said they are surprised so many people with seven-figure incomes claimed benefits.
The first 26 weeks of unemployment benefits are paid by states. Nationally, benefits average about $300 per week. Because unemployment benefits are insurance, funded with taxes paid by employers, the program isn't need-based like welfare. A millionaire who loses his or her job is entitled to benefits the same as a laid-off factory or restaurant worker.
In addition to the millionaires, 8,011 households reporting income between $500,000 and $1 million in 2008 claimed jobless benefits totaling $52.8 million, the IRS data show.
Considering how many talking heads and politicians demonize those collecting unemployment as moochers who are less motivated to find a new job because they get a measly $300/week, I'm absolutely shocked at how little attention this story's gotten. Actually, I'm not. Common sense says don't bite the hand that feeds your campaign coffers.
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Anyway, I suppose this does raise an interesting question. If you made enough money during the course of the year to be considered a millionaire, what good is a lousy $1,200 a month in unemployment benefits really going to do you? Maybe it'll make a yacht payment or two, perhaps help you with the country club membership. Maybe these folks need to learn to slash expenses and live within their means like the rest of us, and leave that money on the table for others who need it.
Question: Is it fair for millionaires to get unemployment benefits?
Jay Anderson is a freelance writer from Washington, DC, whose work has been featured in the Washington Post and on NPR. When he's not busy talking smack here, he runs the award-winning blog AverageBro.com. Follow him via Twitter @AverageBro.