Ethics
When Is It Fair to Collect California Unemployment Insurance?
The federal unemployment insurance system was created in 1935 with the Social Security Act. This was in response to the Great Depression that began in 1929 and lasted through the 1930s. At that time there were no social safety nets to provide for workers who became unemployed through no fault of their own. The unemployment insurance system was established to help these individuals and communities through times of economic downturn by providing the unemployed with money to spend in the local economy.
ADVERTISEMENT
The system is not welfare. It is not a needs based program. A person must have worked and had earnings in order to qualify for benefits. It is insurance that is funded by employer contributions. It is intended to provide temporary financial assistance to unemployed individuals while they seek new employment.
People who become unemployed should always file for benefits. To fund the system employers pay a payroll tax on the wages paid to the employees. If people do not collect the benefits the money remains in the federal account and is not distributed to the states to spend on the unemployed. Local businesses are deprived of the income these funds could generate and are thus not able to hire new employees to handle the extra business. Everyone gains when unemployed individuals legally collect the benefits that are set aside for their use.