“I can afford it.”
December 10, 2009
My friend is an employee of the UC system and, like other California government agency employees, subject to the state-mandated furloughs. She estimates that she’s taking a 15-20% paycut with the 17 furlough days, or nearly a month’s worth of workdays.
Another friend, listening in to the conversation, mentioned that Californians are able to claim partial unemployment, much like Funny About Money’s experience:
….we can claim unemployment for each furloughed day. That will be a HUGE hassle: you apparently have to fill out all the forms and jump through the hoops for every single claim. So it may not be worth the trouble. But it’s there.
My furloughed friend, however, smiled and said that while it bit into her budget enough that she had to decline the trip to Hawaii invitation, she wasn’t in trouble and preferred not to tax the state’s coffers any more than she had to.
Initially, my reaction was: that’s taking the long view. Admirable. If everyone was as careful about accepting “free” money (since she wouldn’t be working for that partial payment, rendering it similar to vacation pay) as she was, perhaps it’d make a difference.
But that’s a slender reed to lean on. So do you think this is actually a shortsighted decision? Should she be taking that money and banking it even if she’s comfortable now in case it just gets rougher or she’s laid off? There’s really no such thing as long-term job security for her, she’s employed by the state of California.
That’s right, the place that’s hiking in-state tuition and setting off protests [where riot cops beat peaceful protestors, and broke a friend’s camera], and closing medical facilities.
There aren’t many indications that California’s on the way out of the frying pan anytime soon. To temporarily stave off disaster, they’re implementing short term fixes like taking an extra ten percent from taxpayers through April 2010, and taxing medical marijuana. [Thanks to Kay Bell]
Times are tough. We get that. And when times are tough, we have to do things we don’t necessarily like to get out of it, we get that too. But without much more serious efforts to mend the budgets, dire predictions prevail:
The deficit is expected to be worse in the years beyond 2011, as temporary taxes expire and raids on local government funds must be repaid by Sacramento. Taylor projected a $21.3-billion deficit in fiscal 2011-12 and a $23-billion shortfall in fiscal 2012-13. [LA Times, November 19, 2009]
What would you do in her shoes?
I’d claim the partial unemployment if I were her. The state of CA obviously doesn’t care about us, taxing us through the nose and not having anything to show for it. I am already worried that we’ll get another round of IOUs next year.
So she might be acting admirably, but will that pay off if, like you mentioned, she gets laid off?
It depends how much hassle it is to file the unemployment claim. From what you wrote she’d have to do 17 separate claims (what a waste of bureaucratic overhead). I don’t need to worry about that in practice as here if you have any liquid assets you can’t claim unemployment pay… (it’s about half the minimum wage if you can).
Grab the unemployment $$ & start looking for a new job during the furlough!
I have to admit, I’m lazy. I don’t know how much UI would be, but I’d only take it if I thought the amount outweighed the hassle of the bureaucracy involved.
It’d all depend on whether or not I needed it. In debt? Then yes. Not in debt? Not as long as I could meet my bills without pulling the belt too tight.
@L.A.Daze: Re: another round of IOUs – I hadn’t thought about that, just was thinking that they’d implement something that allowed them to keep that extra 10% they withheld from paychecks.
@mOOm: My assumption is that she’d have to do 17 separate claims, but as I haven’t looked into it, am not entirely sure.
I had no idea that the rules for unemployment were so stringent there.
@Sense: I don’t think she’s looking for another job, that’s a different conversation for another day. But likely a good idea! 🙂
@Mrs. Micah: I think that’s pretty much her line of reasoning. I can’t comment on the debt part, but she feels she can meet her burdens without it.
All payments from the government here are considered “welfare” and are means tested. There is no sense to being entitled to the payment in our system. This includes government payments to the elderly. You only get it if you don’t have enough assets to support yourself and it’s about half the minimum wage at the maximum level. You currently need though around $A1 million in net worth to get zero age pension. So we don’t have anything like the US social security system. On the other hand medical care with large copays is available to everyone irrrespective of income but there is an extra tax on people on higher incomes who don’t have private insurance.
@mOOm: That’s an interesting way of doing things. I’d be even MORE nervous about my financial security if that’s what we had in place. 🙂