Thoughts about Unemployment Insurance

Periods of unemployment are devastating to anyone, putting their lives and futures at risk. It is one thing for a young person without family and committed financial responsibilities and someone who’s older and making mortgage payments, etc. The one age group that is most devastated by unemployment are those 50 years and older.

In the most recent recession, this group has been particularly hard hit. Older workers have a much more difficult time getting new positions because of their age. There is a direct correlation between the age of the worker and their perceived employability. In short, the older the worker the opportunities become fewer. Of the fifty and older group, those seeking employment over the age of 55 find it is nearly impossible. Coupled with an “employer’s job market” and an over abundance of available workers, it is no wonder that older workers average about a year to find new work and are the group that represents long term chronic unemployment of longer than a year, eventually dropping out of the employment market altogether.

Without union contract protection and seniority protection, it’s of a benefit for employers to cut free the older workers. They, on average, cost the employer the most in wages and because of health issues related to aging, push up the overall costs of health benefits plans. At one time, older workers’ experience and loyalty were highly valued, but in today’s world, the worker has been largely redefined as only a resource and a replaceable part in the employer’s machine of profit generation. Unless you have moved up to the position as a senior executive, the older worker is largely S.O.L.

Of everything that I have been reading lately, the consideration of a worker’s age at the time of unemployment is not part of the conversation, and I think it should be. It may be fine to limit unemployment benefits to some ‘magic’ number for younger workers, but it is clear that the length of unemployment benefits should not be going down, but up for the older worker. I would suggest that unemployment benefits should be age bracketed. The older you are, the longer the benefit period.

This might have a direct impact on employers who are so willing to cut the older productive worker free. If the employer was on the hook for a longer period, which would directly influence the size of their UI Fund contribution. If the employer was on the hook for at least 52 to 104 weeks, they might reconsider letting the older worker go. Also, if the employer had to continue contributions to the older worker’s health plan beyond the layoff or termination, then that too might prove as a deterrent to older worker terminations.

I am of the age group where most of my friends and former colleagues are approaching retirement. To lose one’s position when over the age of 55, it is not just unfortunate, but a clear catastrophe. After unemployment benefits are exhausted and work still hasn’t been found; the affected person begins going through their savings followed by their accumulated retirement principle. If they are without health insurance, then that just speeds up the depletion of their resources. They finally get to the point where they have lost cars and the only real asset they have left is the equity in their home. They are faced with the choice of either selling their home, attempt to pull some of the equity out with a reverse mortgage, or risk losing their home altogether through bankruptcy and/or possible foreclosure. One of the main differences between younger and older workers is that if a younger worker loses employment and has to use their available assets, they have time to recover the loss; whereas, the older worker does not.   

I think it is time, while legislation is considering to reform unemployment compensation, that we finally address the tragedy of the unemployed older worker. I strongly suggest that at age fifty a worker can receive up to 52 weeks and from age 55 and older they receive up to 104 weeks and after that is exhausted they receive a 50% benefit until they reach age 62 and apply for early social security. I would also allow unemployed workers 55 and older, to receive Badger Care and the terminating employer pays the premium until the worker reaches age 65 and qualifies for Medicare.

One more comment, while I’m on the subject. I have heard many say go out and take any job you can find when your unemployment runs out. I agree in principle with the notion, but for the older worker it may not be possible. As we age we all lose some of our physical capabilities. Physically demanding labor may not be an option or one in which the worker is expected to be on their feet for long periods of time. The physical capabilities of the worker should also be taken into account when deciding unemployment benefits and their duration.

Even if you are far from the age of 50, 55 or 60; just remember, if you live long enough, this will become your problem too.