Guest commentary: Jobless benefits aren't welfare

Guest commentary: Jobless benefits aren't welfare

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Opponents of continuing the extension of unemployment insurance often make one of the following arguments: (1) the program is welfare for the undeserving; (2) it subsidizes leisure and is a major contributor to the high unemployment rate; or (3) the extension does little to create jobs. The critics have it wrong on all counts.

The mischaracterization of unemployment insurance as welfare is a fundamental misunderstanding of the program — and insurance in general. Welfare is society's means of ensuring that the poorest among us have their basic needs taken care of, regardless of prior contributions to the system. Insurance is a financial instrument where individuals pay a premium in exchange for compensation in the case of an adverse event.

For instance, people have health insurance so that if they get appendicitis, they will not have to bear the large and sudden costs of the operation and hospital stay. Unemployment insurance works the same way. Workers pay premiums in the form of a tax remitted by their employer while they are employed. If, suddenly, they lose their job through no fault of their own, they do not have to bear the full cost of the loss of their earnings.

Read more: http://www.stltoday.com/news/opinion/guest-commentary-jobless-benefits-aren-t-welfare/article_56df881b-64d7-56b4-acff-446fd1c5c2c8.html#ixzz1hkXB4hUS