Posted on 01/12/2009 3:07:13 AM PST by 2ndDivisionVet
Almost two-thirds of those who are out of work do not qualify for unemployment benefits. The law that created unemployment insurance was passed in response to the Great Depression of the 1930s.
But since then, much has changed in the labor force, including the large numbers of self-employed who are left out of the system.
Most people believe if they're laid off — downsized or simply out of a job — they will get unemployment insurance benefits. While each state has different guidelines on the amount paid and the length of time people can receive benefits, the federal system, created in 1935, simply does not cover the majority of today's workers.
"The largest group of people that do not qualify for unemployment insurance are the non-traditional employees," says Howard Rosen, a labor market expert with the Peterson Institute for International Economics. He says millions who are not full-time, permanent employees are out of luck.
A growing number of people who are consultants, self-employed, temporary employees, part-time employees — a whole plethora of different kinds of arrangements — are not currently eligible for assistance.
Among this group are Barbara and Gary Ratner. Gary Ratner completed a doctorate in biochemistry from Emory University. Barbara Ratner has been a self-employed architectural illustrator since 1990 when she was laid off from a company in Atlanta.
"And I actually never had to worry about work," Barbara Ratner says. "The phone just kept ringing. It was — it was like magic."
She had so much work when she was laid off, she didn't apply for unemployment benefits. Now, because she's self- employed, she doesn't qualify for them.
She says business began slowing down last spring and by December, she finished her last job.
"I'm beginning to identify with the frog in the pan of water where someone turned the heat up and it took me awhile to realize that yes, this isn't like it has been before — and I don't know where it's going," she says.
Dipping Into Retirement, Cutting Costs
At the cozy dining table in the home where they have lived for more than 20 years, Barbara Ratner showed off her office and handmade drawings.
She has created architectural drawings for some big projects, including Atlanta's Olympics, a financial center in Taiwan, retail shops in China — even the Los Angeles and Portland zoos. And she usually makes between $80,000 and $100,000 a year. But now that new construction has slowed dramatically, there's no demand for her drawings.
The Ratners have already pulled nearly $10,000 from their retirement account. They are cutting back where they can — eliminating a phone line and canceling memberships to civic groups. Gary Ratner decided to retire late last year. And because they're in their 60s and do not have a group health plan, the couple pays $1,500 a month for health insurance.
"I've actually been considering getting rid of medical insurance," Barbara Ratner says. "It's huge. And so if we wanted to gamble, we could just drop the health insurance."
The couple is using their retirement savings, and that worries them. They're looking for creative ways to get by. Barbara Ratner says she's seriously considering raising chickens in her backyard, like her parents did way back when.
"They lived through the Depression and my father always felt like his family basically did better than other families because they had a chicken coop and they had a big garden," she says. "And they lasted it out."
Gary Ratner is hoping to get a biochemistry fellowship, while his wife continues to look for work. And both hope that President-elect Barack Obama's economic plan will create new jobs and ultimately turn the economy around.
> She’s been making $80-100K all these years and he’s a biochemist and they don’t have savings to live on? Huh?
I have some sympathy for that. In that tax bracket (at least in NZ) you aren’t quite “wealthy” and you aren’t “average” — you are Upper Middle Class.
This is the group that gets socked with all the costs “because they can afford it”. They pay tax at the top bracket “because they can afford it”. If there are wealth surtaxes, they get them “they can easily afford it”. Whereas the lower-middle-class gets concessions and lower tax and allowances “because they’re needy” there are no such thing for this Upper Middle Class. These things are “targeted” at “need”, you see, and they “don’t need it”...
If the do get an unemployment benefit it will be the same as everybody else’s — maybe a couple hundred dollars per week. That doesn’t mean that their expenses have scaled proportionally tho — no siree! Things like mortgage payments, loans, and other ongoing obligations have a nasty habit of hanging around, and the creditors usually insist on payment “or else”.
The Upper Middle Class pays in good faith all while they are earning on the false assumption that the systems will be there for them should they ever need them.
It just ain’t so.
What? I cant claim to have run a consultant group for underwater basket weaving at the corner of 47th and 2nd, and get benefits?
The guy’s wife’s income nosedives and he retires?! This is even more galling than the fact that they haven’t saved money. GET A JOB instead of expecting the government to be Santa Claus.
He retired late last year, which I would assume is just a few months ago. Why would anyone retire in this economy unless they HAD to or were well settled? Also, he retired before qualifying for medicare and has a self-employed wife with no group plan available. Did he think a magic fairy was going to provide him with cheap insurance?
Our highest (graduated) tax rate is 38% IIRC. Georgia, along with most of the old Confederacy, is usually not known for high taxes (we don’t even have state income tax here in Texas).
This is a structural problem with how they decided to build their company / business. In the good times, they decided to not to create a company and make themselves employees of their own business. There are benefits to making that CHOICE. One such benefit is that you do not have to pay into the employment insurance fund. This leaves more money for them to enjoy.
However, there are CONSEQUENCES to that choice, namely, when times get lean, they have no company to lay them off and since they did not paid into the unemployment fund, they do not get to enjoy the benefit of unemployment insurance.
Yes, if you believe anything that Larry Sinclair has to say...
“Gary Ratner decided to retire late last year...
The couple is using their retirement savings,
and that worries them...”
- - -
Ours is 39% on everything over NZ$60,000. It was 33% but Auntie Helen brought in her “envy tax” as her first item of business 9 years ago. I doubt it will disappear with this government: taxes have a way of staying put once implemented.
This couple has been saving - “for their retirement” which will apparently be delayed. They seem to have been true entrepreneurs - paying for their own medical insurance and taking care of business.
That they are making plans to survive without “government welfare” speaks volumes. It is surprising that NPR even considers them human beings...they are both educated and at least one of them is clearly self-sufficient and creative.
There's their problem...BAD DECISION!
> he has an entitlement mentality and expects the government to support him for the next forty years.
Which, if he has been paying into the greedy gummint’s systems for all those years, is possibly a reasonable expectation for him to have.
Plain fact is, he *is* owed some level of support. I don’t like the idea of “social contracts” but that is part of the deal the gummint enters into when it taxes you for social services: you *are* entitled to collect if you need it. Just like everyone else.
Yes, this is exactly what's wrong with our society today. They're too self-absorbed to even realize how socialist they've become.
These people think Obama is going to come along and save them and "turn the economy around." All his plan will do is give the impression that things are better and only for a brief time. His economic plan is a house of cards...it will eventually do far more damage than it will good.
But these self-righteous, so-called intellectual liberals can't see beyond their noses to recognize that.
Can some one tell me what Gary did for a living?
All I see is that he held a degree.
The guy looks like a mooch to me
Here's an idea, if you can't get a job as an architectural illustrator, pick up the newspaper turn to the want ads and start pounding the pavement.
...Retirement account, isn’t that like a savings account???
And it doesn't sound like they did their homework before making that decision.
> Can some one tell me what Gary did for a living?
Not me. That part was quite unclear. I assume some sort of academic...?
From what I can tell he was a bio-chemist. He should have made oodles of money from that position. Unless he was a teacher.
Freaking eggheads...
Anyhow, If he was an academic wouldn’t he be in line for all the comfiest perks?
Call me uneducated but, this entire story is a head scratcher...
This is an interesting read, but some parts of this just don’t make sense to me. We’re missing part of the puzzle here.
He retired and they are using their retirement funds. Well, isn’t that what they are for?
Second, at age 59.5 wasn’t he eligible to collect some level of SS funds? Or are they part of the group that was too rich to collect at 59.5?
Third, I had a friend who used to complain about having to make payments into the Compensation fund. Now, that his small business went under at least he collects a bit of something until he can re-stratigize. He now isn’t complaining about those payments.
Fourth, medical insurance. I sympathise with them here. $18,000 a year for medical insurance. Although it sounds like Gary carried the insurance through his employer. IF every business dropped the medical benefit and individuals had to pay their own way... She is looking at possibly taking the big gamble like millions of other Americans. I am on my own too and at $12,000 a year or more...? I carry the barest of minimums it is all I can afford.
i have no money in bank and i make very little, these people are wusses
Funny thing.... I always entertained the idea of independent consulting AFTER retirement.
You know? a bit of piddling around?
Cars in the driveway not paid for?
Cry me a river!
My company dropped the medical coverage in our retirement plan.
After a lifetime of work this will be a huge problem to overcome.
They will give a 75K annuity to allow me to buy insurance.
That should last what? 4 years?
Hooboy
My wife's income sky rocketed soon after I retired. We didn't plan on it being that way, we had enough income anyway after my retirement without hers. Sometimes life is just sweet and puts a little extra frosting on the cake.
ping
I'm not sure that 59.5 is in play anymore. I know my father had planned to retire at that age, but had to stay on until 62. Dad retired two years ago so they are roughly the same age.
People retire for medical reasons all the time. The article could be just as telling in what it DOESN’T tell you.
From the web site: You can get Social Security retirement benefits as early as age 62, but if you retire before your full retirement age, your benefits will be permanently reduced, based on your age. For example, if you retire at age 62, your benefit would be about 25 percent lower than what it would be if you waited until you reach full retirement age.
Some people stop working before age 62. But if they do, the years with no earnings will probably mean a lower Social Security benefit when they retire.
It is unlikely he worked for a university or didn't work there long enough to get vested for health care...
Thanks. It was 59.5 when my mom retired years ago. I know that it keeps changing.
LOL! You're an awful quick wit for this early in the morning...
The sticky wicket is that medicare isn't available to the non-disabled until 65. My dad's former employer will maintain their medical coverage until my mom and dad each reach 65, but I think that has to be rather rare.
How many people can retire at 62, even with money? At that age and with the high likelihood of some sort of pre-existing condition, the cost of coverage has to be prohibitive to all but the most wealthy.
Near as I can tell, he didnt work at all.
Hmmm
I have a “part-time” job that I can do from home that, in good years, could probably be the only job since I could probably make up most of what I earn by working more hours at it.
Of course there are bad years (e.g. 2008) which is why I don’t quit my “real job.”
Still, I sympathize with them somewhat.
I hate the way the system works but I agree with you.
On the low end they were probably making$160,000+ per year combined and were at the minimum in a 28% tax bracket and another 6% for Georgia income tax. Plus, if she was self employed, she was paying a huge chunk to Social Security.
What I think the story glares is not so much that they are looking for a handout because they are using their savings. Instead it shows that the government had no problem taking from them for the common good and entitlements that they helped finance but they are qualified for nothing.
I just dont understand what Gary did for a living or who he worked for or why he retired early if there was no income.
The whole story is a big hand wringing NPR mess
“This is what NPR thinks recession “victims” look like? She’s been making $80-100K all these years and he’s a biochemist and they don’t have savings to live on? Huh? I’m sure Lord Obama will wave his magic wand and fix their problems. “
Time out here. I am in this category. Out of work 4 months now. That was my savings. Home owner and have two cars that are paid off, however I will need another car in 2009. Cannot find work and COBRA take 1,400 out of a 1,500 dollar unemplotment check.
There is nothing in my geographical area that even pays half of what I have earned so this whle concept of “take anything” doesn’t fly.
Right now I am retraining which costs bucks. I am hoping I will have enough experience and certifications to get back into the market sometime in March. If not, I willthen have to cash out my retirement which has taken a 40% loss on top of the 38% in taxes and penalties I will have to pay.
I don’t want Bambi’s help. I also don’t want to hear about how this is no big deal, like what Hannity says. “I painted walls.” Good for him. Do it with two kids who need 3-400 dollars in medicine every month.
If you wonder why people are considering Universal Health Care, despite what can and probably will happen, this is it.
My bet is this comes up early in the administration. Perfect timing.
Coincidence???
Oh, cry me a river!!! I struggle every month to pay rent etc. Tough? yeah so what life is tough. Get over people!!
I make about 25,000 a year. I don’t spend money on myself only buy what I need. Boy, these people need to grow a set.
He’s entitled to collect Social Security — at age 67, is it? — and to Medicare/Medicaid at 65, but he’s not entitled to unemployment benefits, which is what this article was bemoaning. The guy retired, which means he quit, at age 60. Employers pay into the state system for unemployment insurance for people who get laid off, not people who tire of working.
> The guy retired, which means he quit, at age 60
Ah, I missed that bit. Thanks for the clarification.
I am not sticking up for these people but lets look at the big picture, they probably pay over $25,000 per year in taxes. Yet, if they were crackheads, or illegals they’d get free health care, food stamps, housing. The system is ridiculous. I am not saying that anyone should expect the government to take care of them, but lets not forget all of the money the government took from them either. The worker bee’s get nothing.
Re: “Gary Ratner decided to retire late last year...
The couple is using their retirement savings,
and that worries them...”
Wonder if they actually read the article before it goes live?
Methinks not.
They will give medicare to everybody. That way the lawyers can still sue for malpractice. They will cut medicare benefits so the major insurance companies can still charge for insurance. Or simply nationalize the medical industry. And the oil companys. We are headed town the Caracas Highway full speed.
Your post is spot on.
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