General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy in the hell is unemployment taken out of our checks and yet the excuse is
They don't know how to pay for extending unemployment insurance
BlueToTheBone
(3,747 posts)is paid for by the employer. Employees pay 1/2 SS and medicare 7.65% and the employer pays the other half. The government picks up after a certain period of time for extended benefits. This benefit is never paid for by the employee.
DURHAM D
(32,609 posts)Lasher
(27,597 posts)99Forever
(14,524 posts)UI may be "paid by the employer," HOWEVER, it is paid BECAUSE it is part of the compensation package for the EMPLOYEE'S work. Hence, if there is no EMPLOYEE, there is no UI contribution. Hence, the reality is that the ACTUALITY is that the EMPLOYEE is in fact "paying into the UI system" instead of receiving that "contribution" as pay.
BlueToTheBone
(3,747 posts)The fact remains that the premium is paid by the employer in almost all instances.
99Forever
(14,524 posts)But I've found that reality has no place in the thinking of those that buy into 1% propaganda.
Keep slinging the corporate bullshit, they need suckers.
lumberjack_jeff
(33,224 posts)The employer pays X for an hour of labor. .7X is paid to the employee, .08X is paid to SS taxes, .10X is paid to benefits and .12X is paid in UI and L&I costs.
If X is less than the price at which she can resell that labor, she won't hire, and thus won't have the tax expenses. The employer doesn't care if she's paying you "X" or paying you .7X + .3X in taxes.
treestar
(82,383 posts)He's not going to hire unless he is willing to in effect pay the employee the amount it costs to employ him.
Mass
(27,315 posts)and totally inadequate for the type of unemployment we have now.
Of course, Democrats want to ignore that and Republicans want to make that a reason not to give more unemployment.
We should be able to pay for it by closing some loopholes. We also should be able to help long time unemployed people by some targeted measures to find jobs. I am so tired to see Democrats use us a political pawns but refuse to acknowledge that just creating jobs wont help long term unemployed people. When you leave in an area without jobs, the jobs created will go to those who have been unemployed for a short time and we will stay unemployed.
Cicada
(4,533 posts)Any amounts transmitted by employers for labor would increase wages were they not to be sent from employer to a third party. At least, that's what economists say. So all employer paid amounts are actually paid by employees. Another point is that unemployment insurance only applies to the first $7000 of annual wages so extending unemployment insurance duration does require additional funding from somewhere. On the other hand additional unemployment payments boost economic output - probably by twice the amount paid or more - so part of the funding comes from taxes and profits on the added economic output - maybe all of it or more.
ProSense
(116,464 posts)How Is Unemployment Insurance Funded?
UI Taxes
The basic UI system is funded by taxes that employers pay on behalf of their employees.[22] While technically employers pay both the federal and state taxes, economists generally regard the tax as falling on workers on the theory that the dollars employers pay in tax would otherwise go into workers paychecks.
States levy taxes on employers to finance regular UI benefits for unemployed workers (the federal government typically picks up the full tab for temporary emergency UI benefit programs such as EUC). The federal government also levies a UI tax on employers, under the Federal Unemployment Tax Act (FUTA), to finance the administration of state UI programs....The federal tax is equal to 0.6 percent of the first $7,000 paid annually to each employee.[25] This tax is regressive; because most workers earn more than $7,000 per year, they are effectively paying the same flat tax of $42 per year regardless of income. FUTA taxes thus represent a much smaller share of the wages of high-wage workers than low-wage workers.
If, in better economic times, federal trust fund balances grow large enough, the law stipulates that additional transfers be made automatically to the states.[26] These Reed Act transfers (named after the 1954 legislation establishing this policy) go directly into state unemployment trust funds. States can use this money only for unemployment insurance but are not required to use it to improve or expand their UI benefits.
<...>
An employers tax paid per employee is determined by the taxable wage base and the tax rate. Each employers tax rate is determined by its experience rating, which in turn is based on the employers history of laying off workers who then receive UI benefits. Businesses with higher layoff rates face a higher UI tax rate and thereby contribute more to the program that supports these workers than businesses that with lower layoff rates. On average, employers contributed $361 per worker to state UI programs in 2010 (less than 0.8 percent of total wages paid),[29] but that amount varies greatly across states and among employers within states. Due to the caps on taxable earnings, the state unemployment insurance tax is, like the federal tax, regressive.
Solvency Issues
The U.S. unemployment insurance system was designed to be forward funded. That is, states are supposed to levy taxes on employers to build up balances in their UI trust funds during periods of healthy economic growth, and then draw down those balances to provide payments to unemployed workers during local or national economic downturns and recessions. Forward funding ensures that when recessions hit, unemployment payments will help sustain laid-off workers and their families, whose spending in turn will support the economy at a time when consumer demand is weak.
- more -
http://www.cbpp.org/cms/index.cfm?fa=view&id=1466
valerief
(53,235 posts)SheilaT
(23,156 posts)the companies who most lay off employees, thereby creating UI receivers, pay the most UI taxes. I'm also under the impression that UI is very largely a state by state thing, which is among the reason the benefits vary greatly.
fredamae
(4,458 posts)for UI Benefits--the Employers UI Tax Rate Stays Low---as more people file...their UI Tax Rate goes Up.
I had not heard that some states deduct from employees payroll for their own UI coverage. Which states are those?
At this juncture of our economy--the feds Ought to be Increasing weekly benefit amounts and relaxing claimant eligibility along with extending weeks of coverage, while at the same time--creating/opening up Federal Jobs Programs--sensibly using the government as the employer of last resort- that is, if they are truly serious about economic Improvement.
I get the theory that workers assume responsibility for compensating employers for their UI Tax contributions by being paid a lower wage---but seriously would those dollars really be added back into employees salaries? Would corporate Really give those dollars back to workers in absence of UI Taxes? I think not when the general attitude is to eliminate the min wage laws, And UI benefit coverage as well.
2naSalit
(86,622 posts)to notice that! Stop reading your pay stubs. Damned education, you're too well informed!
Igel
(35,309 posts)Even then, a number of states ran out of unemployment insurance funds during the recession and had to borrow to keep the minimum local benefits going.
Federal unemployment benefits aren't "unemployment insurance" since they're funded by Federal income taxes and tariffs. Or paid for by borrowing.
"Federal unemployment benefits" are just specified benefits that are funded by Congress for people who qualify under the law. (Which is a long-winded way of saying "entitlement," but since people take offense at the very sound of the word because they've delegated authorization for its definition to hateful RWers, I'm stuck saying awkward things like "specified benefits that are funded by Congress for people who qualify under the law."