This is fascinating because the Trumpistas, the Republicans, just released a budget which is going to cut Medicare, Medicaid, Social Security, food stamps. It's going to cut everything. It's just right across the board, it's three trillion dollars in cuts over a ten-year period. Three hundred billion dollars a year. And what that means is that during bad times things are so much worse.
One of the basic rules of economics and politics that the Republicans have broken this year is that when the economy is on a tear, when the stock market's up, when wages are up, when unemployment is down, when the economy is doing well, that's when you raise taxes, raise revenues, and to the extent that you can, reduce spending.
Typically you can when the economy is doing well because you're not spending as much on unemployment benefits, you're not spending as much on food stamps, you're not spending as much on aid to people, because they have jobs.
When you've got full employment in your economy, your government expenditures go down. So during a time like this last couple of years have been, that is when the government should be raising taxes and squirreling away money, storing money for the winter that's going to come, which inevitably comes - bull markets never last more than seven to nine years and we're nine years into one right now, arguably eight years - so this bull market when it ends means that you're going to see a rise in unemployment, you're going to see a lowering of the employment rate, you're going to see more and more people out of work, you're going to see more people asking for workers compensation or for benefits, you're going to see more people signing up for food stamps and for Medicaid at the exact same time that the Republicans are cutting three trillion dollars out of those programs.
And you now have some twenty states that are in the process of attempting to make unemployment insurance, which was put into place in the 1930s by Franklin Roosevelt, a welfare program that you have to be drug tested to be eligible for. Plus every week you have to prove that you have tried to get a certain number of places to hire you, even if you live in a place like Appalachia or some inner cities where there literally are no jobs - there's nobody hiring. You still have to pee in the cup, you still have to fill out the forms, you still have to jump through the hoops to get your average of $330 to $350 per week which is the average unemployment benefit.
Now, unemployment insurance is the most robust of all the programs, that catches people when they fall out of employment as a result of an implosion of the economy. So this is the main thing that people who are not retired yet - people who are under 65 - rely on to catch them when they fall. And instead of protecting people, according to this article by Arthur Delaney:
"Nine states reduced benefit duration from the usual 26 weeks, and many others have apparently gotten more aggressive in checking up on claimants to make sure they're continuing to look for work, which has always been an eligibility requirement."
That's just in the last year. Nine Republican-controlled states.
"As a result, the rate at which unemployed Americans receive layoff compensation overall has fallen from about 36 percent in 2007 to about 28 percent in 2017, according to data from The Department of Labor."
So almost ten percent fewer people are even eligible now because they're "tightening up" the rules. The main thing that they're doing is they're finding ways to kick unemployed people off the benefits after they've already been determined to be eligible. And the main thing that they do with that is, "oh, you didn't pee in the cup this week," or "oh, you didn't fill out the form saying that here's the three places or six places or whatever it is that you went to look for work." Arthur Delaney writes...
"At the beginning of last year, only 21 state trust funds had achieved what the Labor Department considers a minimum level of solvency."
Remember, I said during good times you stash the money away because the bad times will come? 21 states haven't even done that.
"If they can't catch up before layoffs hit, there will be political pressure to follow the new path that other states have taken to reduce benefits."
"But Congress and the president might be more interested in urine tests than UI. Since about 2011, Republicans at the state and federal level have been trying to make drug tests a requirement for welfare, food stamps and unemployment insurance."
"Wisconsin, Texas and Mississippi have already passed drug test laws and are just waiting for a green light from the Labor Department. "
In Florida in order to file for unemployment, you have to take a math and reading test, plus you have to file online which many people who are broke or unemployed don't have the resources to do. And as a result of that, unemployed people claiming unemployment benefits in Florida have dropped from 32 percent successful claims to 9 percent. Good luck!
And it just goes on and on. Alternative work arrangements - so many more people now are employed in the gig economy, whether it's Uber drivers or TaskRabbit or something, those people don't even qualify for unemployment benefits.