A union representing some federal workers in Philadelphia struck a deal with the Navy to restructure plans to furlough workers so they can claim unemployment benefits. Furloughed workers aren’t unemployed, obviously, but rather facing a reduction in their pay. Savings achieved by the furloughs would obviously be at least partially off-set by increased spending on unemployment benefits. This is how to get to a $16 trillion debt.
Most civilian workers at the Defense Department have a one-day furlough each week. As a result, their pay for that week would be reduced 20%, but, according to the Labor Department, would likely still be too high to qualify for unemployment benefits. The International Federation of Professional & Technical Engineers in Philadelphia, however, negotiated with the Navy to take their furloughs in one-week blocks. This would allow these workers to collect benefits for the week they are furloughed.
Its hard to estimate how many federal workers will be able to exploit this loophole and collect federal benefits. While unemployment is administered by the state, the costs in these cases would be paid by the federal government. So, savings from the sequester will be some amount less than expected.
It does bear repeating that these furloughed workers aren’t unemployed. It is consistent, however, with the general expansion of benefits far beyond their intended scope. More than 10 million Americans collect disability payments, the fastest growing component of Social Security. It is dubious that all of these individuals are truly physically “unable” to work. Almost 50 million Americans collect food stamps, far more than ever envisioned.
So, it is probably no surprise that employed people paid above comparable private sector wages with robust benefit and pension plans can collect unemployment checks. We are all on the dole now.