Monday, April 24, 2017

Private vs. Government Unemployment Insurance

Early in 2016, Verizon’s union workers went on strike over terms of a new contract. During the strike, the New Jersey Legislature tried to pass a bill to allow the strikers from the Communications Workers of America and the International Brotherhood of Electrical Workers to collect unemployment benefits from the state fund.

I left these comments, edited for clarity:

Government officials, especially elected officials, have a constitutional and moral responsibility to represent all people equally and without bias. It’s called equal protection of the law. This means the officials should not take sides in private contractual disputes unless fraud or physical coercion (rights violations) are evident. It’s bad enough to consider allowing striking workers to collect even though they are off the job voluntarily (Vitale’s embarrassingly rationalistic “really almost (been) forced to be off the job” comment notwithstanding). It is vulgar for the legislature to use taxpayer money to dish out special favors to one politically connected union, which is explicitly the reason for this bill. It is blatant cronyism that could enable the union to extract concessions from Verizon by legal coercion rather than legitimate voluntary agreement.

As a lifelong union member, I oppose this bill. I once participated in a 6-week strike. It’s hard. But I never considered that the taxpayers should subsidize me during the time I was out of work while we voluntarily exercised our right to strike for personal gain.

Shame on this committee. If it passes the legislature, I hope Christie vetoes it. No wonder New Jersey is considered the corruption capitol of the nation.

I got this angry reply from words4free:

What about the substantial weekly contributions these employees have made to this fund?  Does that not count?  Are they not entitled to collect that which they put in.  We can say the same about SS--those collecting today, did not put in the amount they are taking out--I along with every other working person, are paying for them to take out more then they put it--but I'm o.k. with that because they need to live to.  You, as a Union member, should be ashamed of yourself.

I guess being a union member means blindly following the Marxist line. I left this reply, edited for clarity:

Yes, it is unfair to have to contribute to the state unemployment fund and not have any control over how that money is distributed. That's how government programs work, which is why I oppose all of them, including Social Security. When you are forced to turn your money over to the government, the government sets the rules. I retired after 46 years in the plumbing and pneumatic controls trades. During my career, I collected only about half a year's worth of unemployment compensation. Surely, I "contributed" way more than I collected in benefits. Should I now be able to demand unemployment benefits in retirement, up to what I “put in?” Morally, yes. But, unlike private savings, the money I “put in” is long gone into unemployed workers’ pockets. So the only way I can collect what I “put in” is to demand that the government pick other workers’ pockets.
That’s the corrupt nature of the system.

Contrarily, during much of my working life I regularly set aside small amounts of money in a “rainy day fund” to supplement unemployment should I ever be out of work, as financial planners routinely advise. Since I rarely needed to tap it, I now can use that money for other purposes [as I choose]. Likewise, if the union set up its own unemployment fund, it could tap it any way it wished. That’s the difference between a one-size-fits-all forced government scheme and private planning. When you plan with your own money, whether individually or as a group, you set the rules.

Bottom line: The government set the rule that benefits go only to involuntarily unemployed people, and shouldn’t be altering or rigging the rules for the purpose of pure cronyism and political opportunism. The union has no right to arbitrarily change the state unemployment fund into a strike, with the politicians as its hired guns.

As to getting more out of SS than put in, that’s no longer true. I calculated how much of a nest egg I’d have if I set aside that money in my own account (or if it was set aside in a SS personal account in my name that no politician can seize and funnel into someone else’s pocket), and had it grow at a modest 6% annual rate, and compared it to the benefits I’m collecting now out of other workers’ paychecks. There’s no way I’ll ever get back what I was forced to “contribute.”

That you’re OK with your money being redistributed in this way, leaving you no way to collect your promised benefits except in the same way, is morally reprehensible, in my view. Shame on you for implying that, as a union member, I must blindly follow union dogma like a mindless sheep to the detriment of my conscientious convictions. Overall, my union membership has been a net positive for me, for which I paid heftily in dues and assessments. But the union doesn’t own me and my convictions.

I am a union man, not a union movement man.

Related reading:

Did Unions Create the Middle Class?

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