Wednesday, November 21, 2012

America’s Unemployment Insurance Is Less Generous Than Other Industrialized Countries

Critics of the United States’ unemployment insurance program often claim that the program is too generous, and that it fosters a culture of laziness that inspires workers to stay home on the couch collecting benefits instead of searching for jobs.

This chart from The Atlantic’s Matthew O’Brien shows that the United States actually has one of the least generous unemployment insurance programs in the wealthy industrialized world. The chart, generated by the Organization for Economic Cooperation and Development’s benefits calculator, assumes that the unemployed were making their nation’s average salary before they lost their jobs:

As O’Brien points out, the chart also proves the “culture of laziness” critique of the unemployment insurance program wrong, since there is very little correlation between generous unemployment insurance programs and high unemployment rates. Greece, for instance, has one of the least generous unemployment programs, but it has higher unemployment than nearly every country included. Israel is among the most generous, and its unemployment rate declined rapidly after peaking early in the recession. Spain ranks in the middle and has a higher unemployment rate than any country on the chart.

Worse, though, is the fact that America’s federal unemployment insurance program has gotten less robust since 2007, and it could soon face bigger reductions if not outright expiration. Two million people will lose benefits at the end of the year if the program isn’t extended during debt negotiations, and another million would lose benefits early in 2013. More than a half-million have already lost benefits because of the way the federal program calculates them and because eligibility was reduced when the program was extended earlier this year.

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