Covered Employment Update: Employment vs. Federal Spending

Townhall.com ^ | December 10, 2013 | Mike Shedlock

[Kaslin]

Here are some new charts from reader Tim Wallace on "Covered Employment" (working in a job eligible for unemployment benefits).

First a few notes ....

Typically, hours worked and wages paid to employees in covered employment are used as a basis in establishing unemployment benefits should an employee becomes unemployed by no fault of their own.

Self-employed people are not covered by unemployment insurance but we still have to pay into the system.

Covered employees are entitled to unemployment benefits if they earn enough wages and meet eligibility requirements of their state.

For example, the State of Washington requires 680 hours of covered employment to be eligible for unemployment benefits.

Covered Employment



Covered Employment Notes

• Covered employment hit 128,673,493 in January 2002.
• Since then, the working age population has grown by 30 million.
• Covered employment was 133,902,387 in December 2008.
• Covered employment is 130,396,096 now, a decline of 3,560,291.

Covered Employment vs. Federal Spending



Wallace comments "I divided the budget by 10,000 so both numbers can be graphed in the same chart. It is a slope reference at which I am looking. You can see that the slope of the budget is much steeper, part of which owes to inflation, but since the 1990's the Fed tells us that we have had inflation under control. The slope starts to steepen on spending in the early 2000's, then spiked in 2008 with the financial crisis."

Spending Per Covered Employee



Wallace comments "We are closing in on $30,000 spending per person working in covered employment."

Mish comments "We cannot discount self-employment because self-employed pay taxes as well. Nonetheless, these charts provide yet another indication of weak hiring as well as visual evidence that something is awry with the budget."

Also, when the next recession does hit, there are plenty of people who did not accumulate enough hours of covered employment to be eligible for benefits.

[Kaslin]

Please note I corrected the first two word in the sentence from Here's some new charts to here are some

[afraidfortherepublic]

...basis in establishing unemployment benefits should an employee becomes unemployed by no fault of their own.

HA! Not in Wisconsin. They get unemployment no matter what they've done. The employer always loses. I've never seen a claim denied, and they collect for 2 full years. We let a man go in January of 2012, and he's still collecting Unemployment Compensation because he worked 2 weeks in 2012, so he got all of 2012 and all of 2013. Something about "if they qualify of any part of a period, then they qualify for the whole period." He was coming to work drunk.

[Buckeye McFrog]

Same in Michigan. I was once involved in a case where an employee who was fired for theft collected unemployment because we failed to have an Employee Manual which specifically stated that “you will be fired for theft”!

[aimhigh]

Self-employed people are not covered by unemployment insurance but we still have to pay into the system.

This isn't correct. A self employed employer only pays the unemployment tax on covered employees. If they employ others, they pay the tax on them.

If a self employed person is incorporated and works for the corporation, they only pay the tax on themselves if they are a covered employee (this differs from state to state). If the corporation folds, they can then draw unemployment like everyone else.