We keep hearing about how bad the economy is. Housing starts at a twenty year low; unemployment at a five year high. Hey it doesn’t sound good.
Earlier this year the government gave some money back to lower and middle income families and individuals to spur the economy. You may have just read that the government took over two quasi-public mortgage giants, FANNIE MAE and FREDDIE MAC.
They are trying to do something. I have a couple of simple things they could do to help those who have already lost their jobs and reduce the impact to society of this economic disaster.
Many of you may have heard of COBRA (the Consolidated Omnibus Budget Reconciliation Act). What that really means to most folks is that if you are laid off and had group insurance through your company, the insurer and company have to offer you the right to continue that coverage if you pay the premium yourself. Hey, that sounds like a good idea. Until you stop and think that unemployed folks have priorities higher than paying insurance premiums that are usually $300-$500 per month for an individual.
Many working folks also have a 401k plan that allows them to take pre-tax money and invest it toward retirement. You may know that if you withdraw that money prior to retirement age (actually I think it is age 59.5, but I am not an accountant), the federal government not only taxes it, but also assesses a steep penalty for the “early” withdrawal.
Last, and certainly not least, education plays a huge part in employment possibilities. What about someone whose skill has been exported to foreign countries; what about workers who are poorly skilled or not skilled at all? Do you think that college and/or trade school training might help these individuals and put them at less risk of future unemployment?
1. Since we know that insured people cost the system less than those who are uninsured, it follows that it is in society’s best interest to keep insured folks insured while they look for new work. And, since they can’t really afford the insurance, to help them pay for it.
I would propose a cost splitting arrangement where the federal government pays 33% of the premium, the former employer 33%, and the worker 33% — for up to six months or until the worker has found new employment. (The reason the employer should pay a portion is to give them an incentive to work hard in efforts to retain their workforce, even in bad economic times.)
Unemployed persons who have health care costs are a burden to us all. (Doubly true with women who are, or become, pregnant.) We can certainly wait until they are unable to pay, until their conditions worsen, until they are utterly unemployable and totally dependent on society. Or we can do the right thing and help them through a tough time.
2. For the 401k, it’s as simple as the thought of a perfect world turned imperfect. Yep, the government wants you to keep your retirement funds out of touch. Heck, so do you — so you can spend them when you’re old. But it really is your money; you did work for it and you did save it. And, when the chips are down — like you’re out of work — the government should cut you some slack and let you use that money without the stringent tax penalty.
It might be the difference between the bank repossessing yet another home; or, a family keeping their pride and a roof over their head. In fact, it might be the difference between a tale that ends with achoholism, drug use, and violence, or the heartwarming turnaround story of a proud American. It might be the simple difference between despair and hope.
3. Education has been the “step up” for generations of Americans. Most folks get their education in younger years. Some proudly and stubbornly struggle to a degree in later life balancing work, family, and education. Perhaps unemployment is another time in life to consider more education, to make oneself more valuable to prospective employers.
Does society want individuals whose skills are so low that they are forever targets for layoff as times turn poor? Can society afford that? How about an educational incentive?
I would propose a 1% interest loan for up to two years of college or trade school education with grades of “C” or better to anyone who meets the following requirements:
* Is currently laid off for lack of work
* Has been laid off for lack of work at least one other time in the previous five years
* Is over 25 years of age
Loan repayments would be pay garnishments starting no later than one year after completion of education. I suspect that those of you who, like me, went about this the hard way in your early years, may resent this as a “free ride”. Well, of course, it’s a loan, and not a free ride. But, I do understand where you’re coming from and I have only one question to ask you: would you rather fund this program or the welfare checks for the person and perhaps their whole family?
Hey, these kind of proposals should be coming from the government or candidates who want my vote. And, why haven’t they???