For Long-Term Unemployed, You’re Better Off Not Working?

The Hartford Courant’s front page story today covers the problems the unemployed face when taking on temporary work. Not only will taking on work reduce your unemployment check for the days you do work, but after your first year of unemployment, federal law says your next year’s benefit is calculated based on the work you did over the first year.

Yeah, seriously.

“By working and knowing it wasn’t steady, and it wasn’t going to last long, I cut my own throat,” one road construction worker told reporter Mara Lee after his benefit check was reduced from $544 a week to $254.

That’s because he brought in $1,000 a week for a six-week temporary gig last year.

Others after seeing their benefits cut are selling their homes, splitting up their families, resorting to desperation.

Sen. Jack Reed (D-RI) has proposed a bill that would make it easier for unemployed people to take on temporary work without worrying that their benefits would decrease. Sen. Chris Dodd (D-Conn.) called the law a “glitch in our current employment laws.”

The road construction worker who made $6,000 would have received $544 a week through July; instead, he’s getting $254, or a loss of $8,700. But since he got $6,000 through his temp gig, he’s less than $3k in the hole. We’d almost have suggested in this situation that he do exactly what he did—working is so good for you on so many levels—it makes you look more hireable, it makes you feel better about yourself, and it may lead to full-time employment—but save some of that $6,000 for the rainy day typhoon that was a-comin. (Course, if you don’t know your benefits check will be reduced, you can’t squirrel any money away.)

Obviously the best thing to do would be to get the law fixed, but if you were faced with $6k now and negative $3k later, or a steady but small income of $544 a week, what would you do? It’s a tough, nearly impossible choice to make, and we wish nobody had to make it, but at least go into it with your eyes open to all the facts.