It’s been difficult to turn on the TV lately and not hear about the plight of the nearly 2 million Americans who were set to lose their unemployment benefits during the holidays. Fortunately for those out of work, Federal unemployment insurance may be extended an additional 13 months as part of the new tax cut deal.
I’ve certainly expressed my opinion about the high unemployment rate in past posts such as the one I wrote about the 99ers in Silicon Valley who were featured on 60 Minutes. I truly feel sorry for those who cannot find work. I know firsthand the stress that the situation can cause on an individual and a family.
But, I truly believe that this extension of benefits is simply putting a Band-Aid on a gunshot wound. It’s not going to help too much.
Sure, the government can kick the problem down the road for a few months, but the overriding reality that there are simply fewer jobs out there needs to be addressed by more than just morning news reporters.
Why are there fewer jobs? I’ve stated before my theory. Improved technology + companies using more freelance/contract help + higher healthcare costs = Fewer Jobs.
Here’s what I mean.
Technologies, such as Cloud computing and VoIP which have both taken off since the recession, now make it easy for teams of people to collaborate and communicate in multiple locations from anywhere in the world. This means that both onsite and offsite employees can work together seamlessly. So, a lot of companies are doing just this and hiring outside of the U.S. where labor is cheaper.
Many companies that laid off workers are now hiring freelancers and hourly contractors. I know this for a fact because more than a few of these companies have hired me for projects. Sites like Elance, Guru, and oDesk make it easy for businesses to find qualified people who are willing to work without benefits and guaranteed employment.
Higher Healthcare Costs
Here’s the component of the current unemployment rate that I don’t think gets considered enough. Many businesses are not hiring because they can’t or don’t want to pay for employee health insurance. And, many individuals are scared to start businesses, to leave bad jobs, or to become freelancers because they’ll be without health insurance if they do so.
In my opinion, our healthcare system is holding this country hostage. It’s hindering would-be entrepreneurs. It’s bankrupting families, and it’s stopping existing businesses from hiring.
The healthcare issue is a huge problem and is something that our family has faced firsthand when my husband was laid off. We were dropped from his former employer’s insurance three weeks after the lay off. We were denied private insurance because of pre-existing conditions, and we couldn’t afford COBRA on what we received in unemployment compensation. After this happened, Judd was hospitalized with pneumonia and a collapsed lung. Yes, after experiencing a layoff, the last thing we needed was a huge hospital bill that we couldn’t pay for. Does this seem right? No, it’s not.
Yes, we were lucky. I was able to start a business because I had some marketable skills. And, my husband was able to find work. We were able to pay off our hospital bill, and we now have health insurance! But, you know what? If my husband didn’t get these benefits from his employer, our family would be without healthcare coverage. I would then have to look for a job with benefits and would be forced to close my business. As well, I probably wouldn’t be able to be a stay-at-home mom to our boys. Our situation isn’t unique. And, everyday families across the United States are making decisions about work and life based upon keeping health insurance coverage because the stakes are too high. Very, very few individuals actually have enough money to pay for a major illness or injury if they didn’t have insurance.
So, I truly believe that health insurance is the big silent problem that is creating the high unemployment rate and hurting the economy as a whole.
I frankly don’t know if a government healthcare system is the right solution or if there just needs to be less expensive private options. But, I absolutely believe that it’s insanely ridiculous that healthcare is politicized since both Democrats and Republicans get sick. And, I do know that the current system doesn’t work, and I’m not seeing any impact from the healthcare reforms that were passed earlier this year. So, I don’t think our country can wait until 2014 to find relief, and if improvements don’t happen soon, the government will need to extend out those unemployment benefits a whole lot longer.