This is a post I’ve been looking forward to writing for 7 weeks, and had started to give up hope I’d ever be able to publish: today I found out my unemployment insurance claim has finally been approved and paid.
How unemployment insurance “works”
Until the present crisis, most white collar professionals have only had the vaguest idea of how the unemployment insurance system works. Even now, college-educated workers have seen much lower rates of job loss than non-college-educated workers, due to a combination of factors, like the ability of knowledge workers to work from home and the ability of firms to pay workers while on furlough through forgivable loan programs like the Paycheck Protection Program. Still, college-educated worker unemployment has risen past its previous high during the Great Recession, exposing the middle class, often for the first time, to the system they designed to crush the poor.
With that in mind, here’s a brief summary of how the US unemployment insurance scheme works:
- employers pay an unemployment insurance premium, set at a percentage of their employees’ wages, that is “rated” based on the frequency with which their employees claim unemployment insurance benefits. New employers have their rate set based on their industry classification. For example, there is a ferry that runs between Bayfield, WI, and Madeline Island in Lake Superior, the largest of the Apostle Islands. Since Lake Superior freezes each winter and the ferry does not run, the crew of the Madeline Island ferry spends the winter living off unemployment insurance, which gives the ferry line a high unemployment insurance “rating,” a cost they bake into fares during the months when the lake is navigable.
- benefits are set by states based on employees’ income in the four calendar quarters preceding the most recently completed calendar quarter of work. As insane as this already sounds, it is slightly more insane than that, as my case illustrates. I lost my job on March 31, and was finally able to submit my application on the 2nd or 3rd of April. However, that meant my last completed week on the job ended March 29, meaning I had not worked the entirety of the 1st quarter of 2020. My last completed quarter of work was therefore the fourth quarter of 2019, and my benefits were calculated based on the four quarters preceding that: Q4 2018 to Q3 2019. Since my salary increased from quarter to quarter, this meant my two highest-earning quarters (Q4 2019 and Q1 2020) were both excluded from my benefit calculation.
- this does not ultimately matter that much because maximum benefits are set so low. In the District, the maximum benefit is set at $444 per week, while I qualified for only $315 per week based on my income. $129 per week is real money, and I would prefer to have it than not, but the fact is unemployment benefits, under normal conditions, are simply inadequate to survive, whether you receive the minimum or the maximum benefit.
- you’re ineligible for benefits if you quit voluntarily, are fired for cause, or receive severance pay (technically your benefit is reduced by the amount of your severance pay). My understanding is that this is one of the most important drivers of severance pay for white-collar workers: if your employees are ineligible for unemployment benefits, then your employer “rating” (see above) isn’t affected, so you save money on the unemployment insurance premiums for all your remaining employees.
The unemployment insurance application — and my first mistake
The District of Columbia unemployment insurance application, like most states’, is broken. This is not news and I won’t try to make it more interesting than it is. It was written in a forgotten programming language, never updated or maintained, and can only handle a few users at a time. My great triumph in finally successfully submitting my application was, after entering my personal details, selecting “employer not listed” as my last employer instead of my actual last employer, which was, in fact, listed.
On one page of the application, which turned out to be the essential page, I was asked to explain my separation from the job. As I recall, the radio buttons were something like:
- laid off
- fired for cause
- voluntary separation
I have come to understand that these terms all have very specific meanings in the world of unemployment insurance, but they meant essentially nothing to me, so I chose “discharged.” I was then invited to give a description of the terms of my discharge, and I wrote something generic like “firm could not support my employment.”
I have come to understand that if I had simply selected “laid off” or “furloughed,” my claim would have been approved almost immediately. I think of “laid off” as a trade union term referring to someone whose factory is decreasing production, while a “furlough” is when the federal government can’t pay people due to Ted Cruz’s antics in the Senate. Neither seemed to apply to me, so I chose “discharged” — and I chose unwisely.
File your ongoing unemployment claims, forever
Once my application had been submitted, I received a barrage of snail mail from the Department of Employment Services, consisting chiefly of my benefit determination (the $315 mentioned above) and my ongoing claim form. This form asked whether I was able-bodied, looking for work, started school, received a pension, basically anything that would make me ineligible for benefits going forward.
Each week I would receive a paper copy of this form, with the words printed at the bottom: “An issue has been established with your claim so it cannot be paid at this time. Please continue to file your weekly claim forms. A claim examiner will contact you if additional information is required.”
I dutifully filed my weekly claims, harassed DOES over Twitter and e-mail, and made half-hearted attempts to reach someone by phone (three hours on hold was long enough for me).
A ray of hope
Finally, at 7:29 pm on May 14, a full 6 weeks after submitting my initial claim, and after filing 6 ongoing weekly claims, I received a call from an unknown DC number. K* explained she was calling because there was an issue on my claim (talk about old news). She just needed a little more information about the conditions of my separation, and she had a few oddly specific questions.
K* then said after she submitted my information she needed to give “them” 24 hours to respond. It took me a second to realize she was talking about my former employer, but that based on my information she was recommending approving the claim.
I then asked how I could get in touch with her and she, hilariously, said, “this is my cell phone number, and if you need to contact me please call and leave only one voice message, and do not give it to anyone else.”
It’s easy to understand her concern: once you find someone who is able to actually process a claim, you would naturally want to give their phone number to everyone else who is struggling to get their claim approved! But I assured her that the number was safe with me.
A sleepless night
I don’t know why, after 6 weeks of calming filing my ongoing claims and receiving no benefits, I suddenly decided to spend all of last night tossing and turning, thinking about how I would proceed if my claim were denied. How I would file my appeal, what I would say, how carefully I would explain my case. Are appeals being conducted in person, by mail, by videoconference?
In hindsight, I wish I had logged into my account after midnight last night before going to bed, to see that my last 6 weeks of benefits had suddenly appeared as “paid” in my account, as I belatedly discovered this morning.
I point this out specifically to highlight that there are two sources of stress built into our unemployment insurance system: inadequacy and uncertainty. Having a known, inadequate amount of money is one source of stress. But having an unknown, inadequate amount of money is entirely different: the stress of uncertainty is easily capable of exceeding the stress of inadequacy.
Unemployment insurance was a mistake
Since it is one of the only cash benefits available to the working class, unemployment insurance is one of the first programs targeted for supplementary support by Democrats during the periodic crises of capitalism. During the present crisis, benefits have both been extended from 26 to 39 weeks and increased by $600 per week through the end of the July benefit period.
It is good that this was done, but hopefully the foregoing makes clear that this system does not work because it was not designed to work: do workers fired for cause have lower expenses than those who are laid off? Do workers who voluntarily leave their employers have lower rent, eat less, or wear out their clothing slower than those involuntarily discharged?
Consider an alternative: income insurance is a perfectly reasonable product to be offered by the private insurance industry. If a company entices an employee to move across the country to New York City or San Francisco, they buy a house or condo, settle in, but then don’t prove to be a good fit for the job, you can imagine an insurance policy that guarantees their income for 6 months or a year, even if they’re no longer employed. A “golden parachute,” if you will.
But what the working class needs is not a punitive unemployment insurance scheme that checks and cross-checks their every move, demands they report every job application they submit, and cuts them off when they prove themselves unemployable and worthless.
What the working class needs is an unconditional, universal basic income. Only then will we see what employers are willing to pay to convince us to work for them.