Last week, the Department of Labor released the latest unemployment figures. The good news is that the unemployment rate fell by 0.4% to 8.6% in November. The bad news is that still puts the number of unemployed persons at 13.3 million.
On the one hand, I feel for those folks who want to work and can’t find suitable employment. Many of my friends have been laid off from their jobs or, fresh out of school, couldn’t find jobs at all in this economy (the legal sector was hit particularly hard). It stinks.
On the other hand, as an employer, I am continually amazed at how many folks act like they simply don’t want to work: sloppy resumes, missed interviews, and unreasonable demands. As someone who has worked my entire adult life, I was always blown away by those who filled out an application and bluntly advised as they handed it over that they didn’t want the job but were required to submit a certain number of applications in order to keep their benefits.
I agree that there needs to be a balance between helping people get back on their feet and giving them an incentive to do so. That’s the very tightrope that Congress walks when making the decision to extend jobless benefits.
It’s particularly a difficult decision when you see stories like this one about the former School District of Philadelphia Superintendent Arlene Ackerman who recently filed for benefits. While at her job, Ackerman earned about $350,000 plus benefits. Her salary made her the highest-paid government official in Philadelphia during her tenure, making more than the mayor.
But as the news about the state of Philly public schools grew increasingly bad – and public perception of Ackerman’s handling of the district turned negative – Mayor Nutter moved to remove Ackerman from her position. Eventually, Ackerman was offered a buyout to leave. The buyout (the terms of which remain somewhat private) reportedly reached nearly $1 million ($905,000 in buyout and $83,000 in unused benefits).
Now, Ackerman stands to add an additional $573 per week to her bank account. That’s the Pennsylvania state maximum amount allowed for unemployment benefits; Ackerman applied for those benefits last month.
But wouldn’t the School District block her application for benefits? They can’t. The School Reform Commission for the City, agreed, as part of Ackerman’s separation package to not block her from receiving benefits. It’s particularly tough for local taxpayers to stomach since the School District of Philadelphia is self-insured for unemployment benefits purposes. That means that the funds paid to Ackerman are coming out of the pockets of taxpayers.
For her part, Ackerman claims she’s entitled to the benefits, saying:
I am not taking something I haven’t earned.
That’s true, according to Gary D. Marchalk at the Law Offices of Gary D. Marchalk, LLC in Tamaqua, PA, who represents both employers and claimants. Marchalk says that benefits aren’t based on a claimant’s economic circumstances. In other words, according to Marchalk, even if you could prove that Ackerman or any other wealthy claimant “does not “need” unemployment compensation, the law is such that she would appear to be entitled to it.”
Harold Goldner, an employment lawyer with the Blue Bell, PA, law firm of Kraut Harris, P.C., agrees. Goldner further noted that currently “[t]here is no offset for severance payments under PA UC law.” That is slated to change though for now, it’s the rule.
But is it fair?
Of course, Ackerman isn’t the only millionaire on the unemployment list. In 2008, 3,000 taxpayers who reported income of more than $1 million also reported the receipt of unemployment benefits. Even more shocking? Seventeen of those taxpayers reported other income of more than $10 million for the same tax year. Again, the law is what it is. But should it be?
These kinds of questions are bound to come up again as Congress negotiates the payroll tax cuts extension. I know, those things don’t appear to be related. But the payroll tax cuts extension is such a big deal that Congress is trying to attach anything and everything to it. With respect to unemployment benefits, Democrats in the House are trying to tack on a jobless benefits re-authorization to prevent benefits from ending for some in 2012. There is resistance to the plan because of sheer numbers. CNN reports that, to date, Americans have collected $434 billion in unemployment benefits over the past four years. Of that, taxpayers have ponied up $184.7 billion directly; taxes levied on employers cover the rest.
That’s a lot of money. Who deserves it?
