To Collect Unemployment or Not? | brokeGIRLrich
I realize in the entertainment industry, periods of collecting unemployment are the norm. I’ve never thought twice about a friend telling me they were on unemployment.
Until the friend became me. Or might become me. I’m still not 100% decided.
I’ve always thought of unemployment as a drastic final measure to make sure you’re fed and have a roof over your head. Since I’ve always had my parents place to go back to in between work, I never felt like unemployment was an option for me.
I also made more on the cruise ship and has shorter periods on unemployment – 5 to 8 weeks usually. Also, they were flat out called vacation. I never thought of them as unemployment. I had travel plans and sleeping in until noon for a week straight plans and lounging at the beach with my mom plans.
Unemployment shouldn’t fund that, right?
Even going into this summer, for the most part, I shored up my emergency savings, am still looking for work opportunities, and thought I’d just weather the storm with about $1,500 of my savings.
I also felt pretty confident that by hustling my tail off with stuff like eBay, mystery shopping and freelance writing, I can probably cover that, or at least put a serious dent in it.
Additionally, I know when I will be going back to work and I suspect that has a large influence on this decision too.
Then one of my many co-workers who are all about to go back on unemployment made a point that stuck in my mind – since you’re paying into unemployment, it’s really your own money you’re claiming.
I’ve been turning that one over and over in my head for a few days now – only to realize I don’t have the first clue about how unemployment works.
It’s true that unemployment is funded through state taxes, so I have been paying into it for years; however, you don’t really see it itemized on your paycheck, it’s just part of the state tax.
With the unemployment rate being pretty high over the last few years, the federal government has also bailed out many states, contributing to their unemployment funds – another tax that I’ve been paying for years.
I can say without hesitation that if I were living on my own, I would apply in a heartbeat.
However, there’s a loud voice in my head saying “hey, you worked hard to build up that emergency fund. You should protect it and make it stretch. This is a smart way to do that.”
And that voice is loud.
But even I’m surprised it’s not actually the loudest voice in my head.
There’s the voice of my parents, who raised me to think things like unemployment were absolute last ditch options. And not to get too preachy, there’s also the voice of Jesus pointing out that others need it more.
I totally get the system is so endlessly flawed that the idea of others needing it more is almost invalid, but I tried to commit years ago to concerning myself more with my actions towards people and things than the end result that occurs when relying on others to hold up their end of the bargain too.
I don’t think when I die, God’s gonna be all – oh, yeah, that system was flawed. I can see why you thought you didn’t have to help people then.
I think naïve things like I should help people who need money – even if they’re going to use it for drugs and alcohol, because a few really might be using it to feed their kids.
So I think for me, until it comes down to not being able to eat or have a place to sleep, things like unemployment are off the table.
Which is also the most incredible motivator to get my hustle on.
I think another reason I wanted to write a post is because this is my very first brush with this possible need and I understand that life and different situations can make you change your views. Perhaps after a few more years of freelancing and different layoffs – especially when I inevitably wind up at the point where a job is about to end without a clue when I can work again – my tune will change and I think one of the amazing things about blogging is being able to watch the evolution of a person’s thought process on some topics.
I want to say I didn’t mean to open a can of worms today, but I totally did. I’m really curious about what all of you think about unemployment – especially in a short term context.
Have you ever claimed unemployment? Have there ever been times you could’ve but decided not to? Did you have an emergency fund while you were on unemployment?
I’ve never been eligible for unemployment — a couple of times when I was about to claim it, I got another job instead — but if I’d stayed in the freelancing game any longer, I definitely would have. You’re still looking for work, right? And you have in fact been paying into the system, right? (Also, Equity probably pays specifically into the unemployment fund — at least, my union did, when I was in one.) Other people get *paid* vacation!
Anyway, seeing as how you’re living with your folks, it’s probably not a big deal to you financially to not claim it this time. But yeah, if you stay in this industry, I think you should start getting used to the idea that it’s ok for you to claim benefits you’re entitled to.
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Oh, I am definitely not Equity and not even sure if I’m interested in ever even getting my card – the only thing that’s really going for it is health insurance.
It’s interesting to hear from another person who has worked in entertainment. Thanks, C!
I think you’re taking the right approach. You’ve been paying into the fund, so if you need it, it’s there for you and it’s completely reasonable for you to tap into it. But if you have other options, maximize them first. That being said, I don’t think you should spend down your emergency fund before going on unemployment. From what I understand, unemployment payments aren’t very substantial, and you could still need the emergency fund while on unemployment.
Good luck making your decision!
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I like your take on protecting my emergency fund. Thanks, Amy!
I see your point. You’re covered financially and it’s only for a short period of time, and the thought process behind applying could mean defeat or a sense of giving up, but on the other hand it’s a benefit your have the right too when you are out of work. You have paid in along the way. I’m applying give my recent situation. Do you feel the same about Social Security?
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I don’t feel the same about Social Security, although I’m not totally banking on it being there like it is now by the time I retire.
I never realized how many people view it as a benefit. I’m not that used to that mindset.
Oh Man… I have to say that I agree with you completely. I’ve only claimed unemployment once in my life and that was because after putting my 2 week notice, my horrible employer told me to not return, hence, depriving me of income until I started my new employment without notice. Only received payments for one week. I view unemployment as something to use in case of an emergency. I hope I never have to use it again.
I’m a little surprised to hear that people use this after choosing to work in an industry where the jobs have an end date from the get go. I feel one should be prepared to find another job with time, or a side hustle like you do, or save. It’s not like one is being fired (in this situation) and it comes as a surprise. I can’t say that I agree with depending on unemployment in this case. Yes, these benefits are available to us when needed, but why is that the first resort? To me it sounds like it’s being used because it’s easy and comfortable (we do it because we can, not because we need it).
But this is just my opinion, does not mean I’m right. And I’ve obviously not been on that side of the workforce. However, it sounds like you have a similar viewpoint…
Thanks for commenting, Jo Ann! I really am interested to hear everyone’s viewpoints and I think we do have similar ones.
I think speaking as someone who has taken many jobs with an end date, I always figure that covering myself for 2-3 months afterwards is a reasonable amount of time to find something to do next. Beyond that, yes, it may start to make sense to collect unemployment, if you’ve been searching for work and just been unable to find it.
I also have trouble switching to the mindset of unemployment as a government benefit like Social Security, I still believe it should be more of a last ditch resort.
The emergency fund should take care of extremely short term periods between jobs but if it has longer term prospects then that is what it is there for. Too often the system is scammed like by an acquaintance of mine who OWNED his construction firm. When he retired, he sold out the firm ad ten went down and signed up for unemployment because the company he worked for had closed! Those who truly need it should have access to it but did you notice when the maximum benefit period finally was allowed to run out, that many people suddenly found jobs? My mom worked seasonal jobs many years ago and in the off season she received unemployment. However, she had to turn in lists of employers from whom she sought work and if they offered her a job she was expected to take it, even if it wasn’t in her original field of employment. I think things are much more lax now.
From my research, you are still supposed to be actively job searching and reporting any job offers you receive. I’m not sure how they can accurately track that though – it seems very honor-system-y.
I think you should apply for it because you have been paying towards it and it is not like it will be given it to you when you retire. If you don’t use it you lose it!
I was unemployed last year for 4.5 months, didn’t have an emergency fund and didn’t apply for unemployment. I live with my parents so I guess I was fortunate. Now I am putting money aside for an emergency fund. But if the situation ever happens again, I will definitely be applying for it.
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I guess since it’s a tax, I don’t think of it in a “if you don’t use it, you lose it” way. I think of it as money that has gone into a pot for everyone’s greater good.
Being able to live with family is a huge deal! I do the same and it makes the prospect of extended unemployment so much less stressful. I mean, it’s still a miserable concept, but I’m not about to starve to death on the street.
I’ve never been in a position like this. I’ve actually never had to go without work in my life after I got my first job at age 14. So I have absolutely no advice or opinion on it really, but I do find this to be an interesting conversation, haha. Thanks for sharing!
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Unemployment is actually funded primarily by a tax on your employer. Without unemployment you would be getting a higher wage. It is is insurance against job loss.
Do you also pay all your health care costs out of pocket when you have health insurance just because you can? If a driver totals your car, would you not get reimbursed through your auto insurance? Are you planning on not taking any social security (an annuity– insurance against outliving your assets) or Medicare?
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It’s really interesting to me how polarized this subject is and it seems to deeply ingrained on whether people believe unemployment is a benefit or a handout. Without even reading this post, my mom snapped at me just the other day about a hospital I went to for some tests sending me papers on how to apply for welfare since I didn’t have insurance. She was like “we don’t need handouts, thank you very much.” And I was struck again by how much they’ve drilled that mentality into me.
I lived in Seattle for years. Microsoft contract workers would do something like 9 months on, 3 months off. It let MS skirt some employment issues I guess. I dunno.
What I do know is that it was common for them to take unemployment in the interim. It always kind of weirded me out. I mean, yeah, they’re unemployed. But it was planned for. So shouldn’t they just make plans for the scarce months? On the other hand, maybe they needed it to get by. Who knows?
If you think you can make money with other forms of work, then yeah unemployment is a little iffy. I think the question is how hard the financial situation will be when you get back to work.
If you’re going to run through all of your money, at least take some of the help. If you can make it through with your EF unscathed, I guess go hustle some mystery shops and freelance pieces.
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Yeah, I’m definitely going to try hustling for a while before I get too worried about it.
Unemployment here is funded in the same way. That said you need to have basically no savings, and if you have a partner who works, you’re basically SOL too.
So I would take it if I could, but most likely I couldn’t. (Also, dealing with Work and Income is just such a nightmare, even if I did…. maybe it wouldn’t be worth it for the hassle….)
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I worked a total of 40 years and was never eligible for unemployment. I can say from what my friends who have collected is its a big hassle. I agree that if you qualify you should go ahead and apply for it. The payment is usually delayed a bit. Here in Colorado you have to fill out a sheet (I have seen it) of all you have applied to during the week to meet your minimum application numbers including the Company name, position title, who you talked to, their contact number, and whether you have interviewed. I would have to weigh the hassle against what I would consider short-term. Especially if I was really unwilling to accept an offer from anyone I was applying to. I have heard of people being kicked out of unemployment payments for turning down a job. Every little dollar you might make while collecting even if its a tiny side hustle has to be told to them so they can subtract from the payment. At least here it is that way.
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Yeah, I remember reading Stefanie’s posts about it over at The Broke and Beautiful Life and it seems like an incredible hassle.
Great article named ” To Collect Unemployment or Not? “. I think educated young people are riches of a nation. I don’t understand why educated people are unemployed. There are great source of work in online market places like freelancer, upwork and many other. Taking a study of few month any one can work there.
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I think this is a great question. I personally have asked a very similar question which is, “would it be okay for me to quit my job and for me and my son to go onto subsidized healthcare while my husband finishes grad school, even though by working I can obviously afford healthcare (and to pay lots of taxes too)?”
It’s a strange question for sure.
I think it’s a pretty glaring problem in our society that it is set up in ways that at times encourages you not to work.
Having worked as a stagehand, and going on unemployment several times, I agree that it can be a hassle. Having to go to work for a paycheck can be considered a hassle too, but I still do it. Looking over the comments on this post I can see that most people don’t understand where the unemployment money comes from.
While states can vary the rules somewhat, in most unemployment is not considered welfare in the traditional sense, which is why it’s usually administered by the state department of labor/economics and not human services. I don’t think any state means tests unemployment (on your assets/savings) either for that same reason that’s it’s not considered welfare.
Your state unemployment insurance agency charges a percentage of payroll to fund an account for whatever company you work for. Benefits are paid from that money. If the account gets depleted then the state picks up the balance, but the company gets charged more next year to cover it and ensure a minimum balance is maintained based on expected claims.
I can absolutely assure you that the pay your company offered you is lower because of the company need to pay an additional percentage to fund its unemployment liability. If you don’t think so, then just ask the local IATSE business agent whether UI percentages come up in negotiations when the pay rates are set. While most companies vigorously contest unemployment claims against them (they don’t want to pay higher percentages of payroll next year), I’ve never once had an entertainment oriented company protest an unemployment claim. They consider it a cost of doing business (which they take indirectly from your pay).
It might only be a few hundred a week, but it’s still money you’re entitled to. Even if it’s a hassle and takes a day to figure out the first time, isn’t an extra thousand over three or four weeks worth it? People who don’t claim it are simply allowing their companies to reduce their pay while accumulating large balances in their unemployment insurance account with the state.
Also, the company UI liability is only for the initial state authorized benefit period(in Michigan it’s 16 weeks, most states are usually 20). Any time after that was part of the now ended emergency benefits which were paid by the feds.
Wow, thanks for all of the information, Charles! I’m actually lucky that I landed on my feet and wound up picking up a new gig a week after the old one ended, but I still think this is an important consideration for next time – cause I’m sure there will be a next time.
My experience with unemployment is a nightmare I have no less than 20 letters saying you are eligible you are not eligible I sent them the required documents and I never collected a cent, they owe it to me though really upsetting now I have financial hardship because of their ridiculousness. Very upsetting system
Yes, the system is a hot mess. I honestly had no idea how bad it was until the year.