By Amy Alkon
shared this story
from Advice Goddess Blog.
Nobody Should Get “Unemployment” Payouts
We self-employed people don’t get a bunch of money handed to us if we lose a client. Nobody should get this money. And it shouldn’t be demanded from employers:
Ari Armstrong writes at TOS that government unemployment “insurance” isn’t insurance; it’s force:
Despite Barack Obama’s blather to the contrary, government payments to the unemployed are not “insurance.”
Real insurance is a financial instrument voluntarily sold and purchased on a free market for the purpose of spreading risks, with the benefits defined by contract. For example, we know that some people’s houses will burn down, but we don’t know whose; therefore, most of us who own houses purchase home insurance that covers (among other things) destruction by fire.
Although government unemployment welfare has substantially throttled the need for and value of private insurance, some private insurance is still available. For example, people can purchase unemployment insurance to supplement government payments; consumers may purchase credit insurance to cover payments on debts during times of unemployment; and people may purchase private disability insurance to cover unemployment (my wife has this sort of insurance). Some people choose to protect themselves from the costs of unemployment simply by saving money ahead of time. In a market free from government force, insurance companies and other businesses would offer many additional options.
Government payments to the unemployed are not insurance. The so-called customers do not willingly pay for it; rather, government takes the money by force. Most government unemployment funds are confiscated from business owners–a violation of their rights (which makes it harder for business owners to hire people or increase wages).
Private unemployment insurance? Don Boudreaux writes at Cafe Hayek:
Private unemployment insurance was offered long before the New Deal. As Professor Michael Rappaport found, starting around 1910 companies began selling such insurance to railroad workers. Alas, seeking to offer such coverage to other workers, private insurers were consistently blocked by state governments. And when New York’s legislature in 1931 finally approved the expansion of private unemployment insurance, the bill was vetoed by none other than Gov. Franklin Roosevelt.