Are The Wealthy Abusing Government Aid?
At its 2010 peak, the country paid out $150 billion in unemployment benefits, according to the Congressional Budget Office. And $29.9 million of that went to millionaires, according to Bloomberg. That year, almost 3,200 households that reported an adjusted gross income of more than $1 million received unemployment benefits, with an average take of $12,600. That's 56 percent more than the $8,050 received by the average household filing for benefits, unsurprisingly so since jobless insurance is hitched to past salary.
Thirty-three households earning more than $10 million also got a helping hand from our jobless safety net, with an average haul of $11,455. A quarter of those millionaire homes getting benefits were in California, and a further 19 percent were in New York.
Is This An Abuse?
A 42-year-old waiting outside the unemployment office in Harlem, N.Y. was at first shocked when the Bloomberg reporter told him how many millionaires were also getting that weekly check. "I'm not a millionaire!" said Clark James. "But if you've paid taxes for it, why shouldn't you collect the money? And going from $1 million a year to $405 a week -- that's a big drop."
But even far more affluent Americans can end up in free fall when a livelihood is lost, especially since they likely have higher costs, such as private school tuitions. The film "Hard Times: Lost on Long Island" followed several families who suddenly lost a six-figure paycheck, and end up driving down to the church's food bank in a fancy sports car to pick up dinner.
But still, it can be hard to stomach the idea of millionaires cashing in on a system designed to keep the unfortunate afloat, especially as so many Americans brace for major sequester-related cuts to their unemployment checks.
Ultimately, however, it isn't millionaires, but the millions of middle and working class Americans, who are stretching the unemployment insurance system to breaking point. As Gary Burtless, a senior fellow at the Brookings Institution in Washington, pointed out to Bloomberg, just 0.035 percent of the 9.2 million Americans receiving jobless benefits in September 2010 made a million bucks that year.
And making millionaires ineligible for unemployment benefits would be an enormous undertaking. As the Congressional Research Service noted in a report last year: "The potential administrative costs [of disqualifying wealthier Americans from unemployment insurance] could outweigh the potential savings."
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Claire Gordon has contributed to Slate's DoubleX, the Huffington Post, and the book Prisons: Current Controversies. While an undergraduate at Yale University and a research fellow at Yale graduate school, she spoke on panels at Yale and Cornell, and reported from Cairo, Tokyo, and Berlin.
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