Unemployment Insurance: Time for Reform

Each year unemployment insurance provides support for millions of people out of work, and it is an important source of security to millions more who are employed. But it is a program that continues to operate along the lines originally established for it during America’s worst depression. The economy has changed dramatically in the past 40 years, but the program has not been brought up to date. The result is that such insurance now increases the rate of unemployment, causing a substantial waste of our nation’s manpower and creating constant pressure for an inflationary macroeconomic policy. Although the side effects of unemployment insurance are widely recognized, even the experts generally underestimate their magnitude.