No-Cost Idea to Save Unemployment Insurance

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Unemployment rates have recently hit a new high, and in the wake of a potential “double-dip” recession, Hausmann-McNally S.C. President Charles Hausmann has a plan to revolutionize unemployment insurance

Charles Hausmann, President of Hausmann-McNally S.C.

Instead of a recently laid-off worker receiving $590, every two weeks from the government, a business would receive that money and use it to hire and pay the same unemployed worker.

We need new ideas. As America climbs ever so slowly out of its deep economic hole, the demand for fresh thinking has never been higher. Last month, the stock market took a huge hit all because the number of jobs created in America was embarrassingly low.

That is why Hausmann-McNally President Charles Hausmann is advocating for a new form of unemployment insurance, one that could reduce the unemployment rate’s far too high percentage.

“The current unemployment insurance program is a dated model,” Hausmann said. “That is why I am advocating the government give unemployment benefits directly to businesses to hire those collecting unemployment insurance.”

Hausmann cited a few reasons why unemployment insurance is a broken system that needs to be changed.

  •     According to Bureau of Labor Statistics, the average length of unemployment has now skyrocketed to an all-time high of 37.1 weeks. Many of those receiving unemployment benefits live paycheck-to-paycheck along with mounting bills, the prospect of foreclosure and the depression that comes with losing a job and career. Nationwide, the average amount of money paid out to the unemployed is $295 per week.
  •     Taxpayers are not getting a return on their investment. Right now, unemployment payments are a sunk cost that taxpayers lose out on every two weeks.
  •     Lastly, unemployment is demeaning and emotionally harmful to those looking to better themselves. People should not be subject to long-term bouts of depression from lack of work.

Other governments have been trying out new methods of unemployment insurance with varying degrees of success, Hausmann said. In Germany, the Federal Employment Services provides funds to the unemployed to start their own businesses. Australia’s Work for the Dole program forces the unemployed to work at volunteer and business sites, as well as encourages them to attend training seminars.

In California, the state government is offering tax incentives to companies that hire unemployed or part-time workers. To build off this plan, why not just give businesses the unemployment funds directly and watch as the unemployment rate dips dramatically?

Hausmann’s plan would look something like this.

Instead of a recently laid-off worker receiving $590, (the average nationwide unemployment payout), every two weeks from the government, a business would receive that money and use it to hire and pay the same unemployed worker. That business would in turn pay their new worker an extra 25-50 percent on top of the unemployment wages, thereby adding its own money to the economy.

The government would contribute to the worker’s salary for a year, and would require the business to keep, and pay for, the worker for an additional six months after that. Besides adding money to the economy, this plan would immediately increase job growth. Employers would scramble to create jobs knowing that the government was footing the bill. As an added benefit, instead of draining the taxpayer dollars, this plan would add more money to the unemployment fund through taxes on the new workers’ wages.

Also, businesses would not be allowed to fire one employee to hire another, these would have to be newly created positions. The fines for violating this policy would likely scare off any potential fraud.

“With this plan, there is a possibility of fraud and the employment has the potential to be short-lived; however, the current system is not reducing unemployment,” Hausmann said. “This proposal is just as likely to create permanent employment. In some situations unemployment benefits are encouraging unemployment through lengthy extensions that can result in lost incentive to return to gainful employment.”

“As a taxpaying citizen of a country $14 trillion in debt, you may be asking yourself how much more money this will add to the deficit. Answer: none,” Hausmann said.

“Tens of billions of dollars are already being spent on unemployment benefits without any productivity being required by the unemployed, so why not just apply the money already being used to this idea?” he continued. “The United States is more than $14 trillion in debt, and new courses of action need to take place.”

“This plan encourages support from all political ideologies. It takes money out of the government’s hand and gives it to the private sector to increase jobs. Unemployed folks get the chance to make a contribution to society while still getting help from the government. Both financially and morally my plan benefits all Americans.”

“Right now, America is getting zero production from paying out unemployment benefits. With my plan, employers would contribute to the growth of the economy, thereby increasing consumer spending and job growth in the process.”

“Americans are the hardest working people in the world. As a whole, our society puts a great emphasis on work. We draw our identity from our jobs.”

“We need new ideas so we can give our neighbors their identity, dignity and self-sufficiency back.”


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