As efforts to again extend unemployment benefits remain stalled in Congress, a dispatch in yesterday's editions of The Wall Street Journal highlighted the struggle some states are having with a surge in fraudulent claims. Seems as though some folks continue to report themselves as jobless even after they have found a new engagement:
Nearly $3 billion was likely lost to unemployment-insurance fraud nationwide in 2009, more than double the 2008 figure, according to early estimates from the U.S. Labor Department..In the most common type of fraud, formerly unemployed people continue to collect checks after finding work. On other occasions, fraud rings bilk the system out of tens of thousands of dollars at a time.The temptation to continue to collect checks after finding a job can be high. Many newly re-employed people accumulated debts during unemployment and took lower-paying jobs than they once had, said Ohio fraud investigator Mickey Ford, tempting them to supplement their incomes with an unemployment check. Potential fraudsters have also been lured by the larger potential take made possible by extended unemployment benefits, which until last month could be collected for up to 99 weeks, said Gary Burtless, an economist for the Brookings Institution. Last month, Park Forest, Ill., resident Reuvean Day admitted she collected $25,398 in benefits while employed as an administrative-support specialist a couple of years ago. Ms. Day was one of 11 people charged in May with taking $255,000 from Illinois's unemployment insurance fund.
Stories along these lines will only add heat to an already hot debate about the pros and cons of extending benefits. Proponents say that beyond the obvious help benefits deliver, the payments are good for the economy because they largely maintain consumer spending potential. Indeed, last week Speaker of the House Nancy Pelosi said that the unemployment benefits program "injects demand into the economy" and "creates jobs faster than almost any other initiative you can name." Opponents cite the need for fiscal restraint at the Federal level and, in some cases, say that by essentially rewarding joblessness you get...joblessness.
Source: The Wall Street Journal
