Challenging Unemployment Benefits

Summary
As unemployment offices become increasingly packed across the United States of America, more unemployment benefits claims are being denied. With unemployment in America reaching nearly five million individuals, more and more employers are doing their best to block unemployment benefits by challenging the claims. Recent research conducted by Wayne Vroman, has shown there has been a rise in the number of claims that have been challenged by employers (through tracking trends using data from U.S. Department of Labour). He states that up to sixteen per cent of claims are being challenged on basis of misconduct and ten percent are being challenged on basis of voluntarily quit by an employee. Companies are increasingly looking to block benefits, which increase the unemployment insurance taxes that they pay. They have even gone to the extent of hiring third-part firms that specialize in dealing with unemployment claims, worker compensation cases and health insurance matters. Claims are dealt with inefficiently because many do not file for unemployment immediately and are not aware of their eligibility. Further complications arise when they fail to provide accurate and complete statements on the application when asked to describe the reason for unemployment.

Economic Indicators: Unemployment
Much like the rest of the world, the American economy continues to falter in the midst of a recession. With the financial situation the United States of America are facing, a dramatic rise in unemployment is nearly a given. In fact, unemployment is becoming a predominant force in countries worldwide. How this dire problem is to be solved has yet been presented in the form of convincing evidence. The lack of overall spending in the American economy has resulted in an overload of demand-deficient unemployment. As the state of the economy falls, the world of business faces great difficulty in the sale of its products. As the level of spending by consumers decreases, so do the sales for businesses. If consumers are not spending money on goods and services, employers will not need to hire as many workers. As a result, demand-deficient unemployment has become a powerful force that persists in society today. Before the recession, it was thought that unemployment benefits (both in Canada and the United States of America) encouraged unemployment and spawned an increase in the unemployment rate. However, the recession has caused true unemployment and now unemployment benefits are being denied, yet now is the time when they are definitely necessary.

Reflection
Naturally, unemployment benefits claims and unemployment go hand in hand. It is only expected of companies to want to save money during times of financial trouble, but the means by which they are doing so are definitely questionable. How bad are finances now that they must resort to denying ex-employees of their unemployment benefits, simply to save on paying unemployment insurance taxes? By attempting to evade paying unemployment insurance taxes, the companies could be seen as making a statement that it is unemployment due to employee misconduct and not unemployment due to demand-deficiency. Perhaps fewer claims would be challenged if there was less unemployment, but in order for the unemployment rate to decrease, the American economy must rebound to a state where it can prosper. I believe a prominent problem with the current American economy is the media. The sensationalist media portrays the economy in the worst angle possible, striking fear and despair into households and businesses across the country. With national confidence in the American economy absolutely decimated, employers are continually looking to cut costs wherever possible and unfortunately, are costing millions of people their jobs across the nation. The sensationalistic journalism must stop in order to restore confidence as the economy can and will be fixed with time and cooperation from all parties (workforce, employers, government, etc...). The future outlook already appears very bright; President Barack Obama’s lengthy 1,534-page stimulus package, passed February 17th, looks to create three to four million jobs. The stimulus bill is the first big step towards fostering change in order to bring long-term growth and prosperity. The American economy is very capable of rebounding under President Obama’s guide, and when it does, the unemployment rate will fall considerably, and maybe then, less unemployment claims will be challenged.

Link: http://abcnews.go.com/GMA/Weekend/Story?id=6928837&page=1