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Is John Stossel Suggesting Unemployment/Welfare Recipients Are Scammers? Or That They Should Be?

Reported by Ellen - May 11, 2010 -

Co-authored by Dan

In his May 10, 2010 column on Foxbusiness.com, John Stossel makes it clear he thinks the welfare/unemployment system is not a safety net but a safety hammock. After noting that some jobs pay so little that workers feel it's more advantageous to continue collecting unemployment then to work, Stossel went on to complain - not that wages are too low - but that unemployment benefits must surely be too high. Stossel concludes by saying, "For those of you who work off-the-books part-time, an actual job might reduce your income. The welfare state is building hammocks." Is he suggesting that people should collect AND work off the books? Or suggesting that a lot of them do and so further don't deserve the benefits? Or that any savvy benefits collector should work off the books while receiving unemployment benefits? We report, you decide.

Stossel quoted an article from the Detroit News: "Landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits…some seasonal landscaping workers choose to stay home and collect a check from the state, rather than work outside for a full week and spend money for gas, taxes and other expenses."

There are a few other things Stossel did not consider in his breakdown comparing a landscaper's wage of $12/hr to unemployment insurance of $255 a week. He did not note that the federal tax deductions from the weekly pay will come back as a refund after the yearly returns are filed. He didn't mention the refundable Earned Income Credit either, a tax refund based on the amount of earned income, not benefits.

Stossel also did not consider that maybe some of the applicants were previously earning quite a bit more in the jobs they had been laid off from. The Detroit News article notes that applying for jobs is a condition of receiving unemployment benefits. So the applicants may have chosen to keep looking for better-paying work within their field of expertise, rather than accept a low-paying, seasonal and menial job.

I wonder how eager Stossel would be to accept a $12/hour landscaping job if he were laid off from his cushy, air-conditioned job at Fox Business?

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