Provisions of Obama’s jobs plan

The president unveiled his jobs package last night to a joint session of Congress.  Here are the main provisions of the $447 billion plan:

-EMPLOYEE TAX CUTS. A deeper payroll tax cut for all workers. Congress in December cut the payroll tax, which raises money for Social Security, from 6.2 percent for every worker to 4.2 percent, for all of 2011. Obama’s proposals would cut that tax even further – to 3.1 percent – for all workers in 2012. The tax applies to earnings up to $106,800. The estimated cost is $175 billion.

- EMPLOYER TAX CUTS. A payroll tax cuts for all business with payrolls up to $5 million. Obama’s proposal would cut the current 6.2 percent share of the payroll tax that employers pay to 3.1 percent. As with employees, that tax applies to annual employee earnings of $106,800. The White House says 98 percent of businesses have payrolls below the $5 million threshold. In addition, Obama proposes that businesses get a full payroll tax holiday for additional wages resulting from new hires or increased payrolls. The estimated cost is $65 billion.

- PUBLIC WORKS. The president proposes spending $30 billion to modernize schools and $50 billion on road and bridge projects. He also calls for an “infrastructure bank” to help raise private sector money to pay for infrastructure improvements and for a program to rehabilitate vacant properties as part of a neighborhood stabilization plan. The estimated total cost of all those programs is $105 billion.

-UNEMPLOYMENT BENEFITS. If approved by Congress, the proposal would continue assistance to millions of people who are receiving extended benefits under emergency unemployment insurance set up during the recession. That program expired in November but Congress renewed it for 2011. If not renewed again, it would expire at the end of this year, leaving about 6 million jobless people at risk of losing benefits. The president also wants to spend extra money on states that help long-term unemployed workers though training programs. One model cited is a Georgia program that lets people receiving unemployment benefits obtain job training at a company at no cost to the employer. The estimated cost is $49 billion.

-LOCAL GOVERNMENT AID. The ailing economy has forced state and local governments to lay off workers. Money that states and municipalities received in the 2009 stimulus package has been running out. Obama proposes spending to guard against layoffs of emergency personnel and teachers. The estimated cost is $35 billion.

-EMPLOYER TAX CREDITS. The president proposes a tax credit of up to $4,000 for businesses that hire workers who have been looking for a job for more than six months. The estimated cost is $8 billion.

-EQUIPMENT DEDUCTION. Wary of imposing a burden on business, Obama wants to continue for one year a tax break for businesses, allowing them to deduct the full value of new equipment. Previously, companies could only deduct 50 percent of the value. The president and Congress in December negotiated that provision into law for 2011, but it is set to expire at the end of this year. The estimated cost is $5 billion.

via Highlights of Obama’s jobs plan – Sacramento News – Local and Breaking Sacramento News | Sacramento Bee.

Lots of reliance on tax cuts.  I thought that was a Republican tactic that  Democrats scorn in their crusade for new revenue.  Isn’t all this help for business  what Democrats usually mock as “trickle down economics” and help for the rich?  There is, of course, lots of government spending of money that we do not have.

Do you think this will get Americans working again?

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • http://www.challies.com Tim Challies

    It’s all well and good to announce that you’ll be spending a half trillion dollars. But that’s very different from actually have a half trillion dollars to spend. But such is government spending these days. There is little expectation that you need to have the money in-hand before spending it. Never have nations been more grateful that they have fiat currency…

  • http://www.challies.com Tim Challies

    It’s all well and good to announce that you’ll be spending a half trillion dollars. But that’s very different from actually have a half trillion dollars to spend. But such is government spending these days. There is little expectation that you need to have the money in-hand before spending it. Never have nations been more grateful that they have fiat currency…

  • Susan

    Q: Do you think this will get Americans working again?

    A: Absolutely not. This Stimulus II. It will be an exercise in waste and fraud just like the last one.

    The Associated Press did a fact check on the President’s speech and found his statements problematic:
    http://hosted.ap.org/dynamic/stories/U/US_OBAMA_JOBS_FACT_CHECK?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-09-08-19-52-31

    Snippet:

    President Barack Obama’s promise Thursday that everything in his jobs plan will be paid for rests on highly iffy propositions.

    It will only be paid for if a committee he can’t control does his bidding, if Congress puts that into law and if leaders in the future – the ones who will feel the fiscal pinch of his proposals – don’t roll it back. …the plan he presented was conventional Washington rhetoric in one respect: It employs sleight-of-hand accounting.

    Another Snip:

    OBAMA: “The American Jobs Act answers the urgent need to create jobs right away.”

    THE FACTS: Not all of the president’s major proposals are likely to yield quick job growth if adopted. One is to set up a national infrastructure bank to raise private capital for roads, rail, bridges, airports and waterways. Even supporters of such a bank doubt it could have much impact on jobs in the next two years because it takes time to set up. The idea is likely to run into opposition from some Republicans who say such a bank would give the federal government too much power. They’d rather divide money among existing state infrastructure banks.

  • Susan

    Q: Do you think this will get Americans working again?

    A: Absolutely not. This Stimulus II. It will be an exercise in waste and fraud just like the last one.

    The Associated Press did a fact check on the President’s speech and found his statements problematic:
    http://hosted.ap.org/dynamic/stories/U/US_OBAMA_JOBS_FACT_CHECK?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-09-08-19-52-31

    Snippet:

    President Barack Obama’s promise Thursday that everything in his jobs plan will be paid for rests on highly iffy propositions.

    It will only be paid for if a committee he can’t control does his bidding, if Congress puts that into law and if leaders in the future – the ones who will feel the fiscal pinch of his proposals – don’t roll it back. …the plan he presented was conventional Washington rhetoric in one respect: It employs sleight-of-hand accounting.

    Another Snip:

    OBAMA: “The American Jobs Act answers the urgent need to create jobs right away.”

    THE FACTS: Not all of the president’s major proposals are likely to yield quick job growth if adopted. One is to set up a national infrastructure bank to raise private capital for roads, rail, bridges, airports and waterways. Even supporters of such a bank doubt it could have much impact on jobs in the next two years because it takes time to set up. The idea is likely to run into opposition from some Republicans who say such a bank would give the federal government too much power. They’d rather divide money among existing state infrastructure banks.

  • Susan

    Re: Obama’s Public Works Proposals

    Color me disgusted. This is more money being thrown out the window. Here is a recent look into how mismanaged the last stimulus was from the Texas Watchdog Newspaper:

    Excerpt:

    What was to have been a Frankenstein-like lightning strike to the economy and to unemployment, the Weatherization Assistance Program today in Texas has spent more than $226,000 on each of 1,041 jobs the program is said to have created or saved.

    The director of the state Department of Housing and Community Affairs overseeing the nearly $327 million stimulus program to fix up low-income homes has stepped down. At least three of the original 44 local organizations administering the program have been shut down for chronic mismanagement and concerns about fraud.

    The state has taken funding from 13 of the programs and redistributed it to more efficient organizations, while the federal government says it will take back tens of millions from the state if it fails to spend the money quickly.

    Full article here:

    http://www.texaswatchdog.org/2011/09/six-figure-jobs-in-federal-stimulus-program-to-fix-up-low-income-homes/1315490993.story

  • Susan

    Re: Obama’s Public Works Proposals

    Color me disgusted. This is more money being thrown out the window. Here is a recent look into how mismanaged the last stimulus was from the Texas Watchdog Newspaper:

    Excerpt:

    What was to have been a Frankenstein-like lightning strike to the economy and to unemployment, the Weatherization Assistance Program today in Texas has spent more than $226,000 on each of 1,041 jobs the program is said to have created or saved.

    The director of the state Department of Housing and Community Affairs overseeing the nearly $327 million stimulus program to fix up low-income homes has stepped down. At least three of the original 44 local organizations administering the program have been shut down for chronic mismanagement and concerns about fraud.

    The state has taken funding from 13 of the programs and redistributed it to more efficient organizations, while the federal government says it will take back tens of millions from the state if it fails to spend the money quickly.

    Full article here:

    http://www.texaswatchdog.org/2011/09/six-figure-jobs-in-federal-stimulus-program-to-fix-up-low-income-homes/1315490993.story

  • Dan Kempin

    Ok, seriously, without invoking all the political rhetoric that is certain to gum up the discussion, there is something that I don’t get. Unemployment benefits are to be extended into a THIRD YEAR for people who lost their jobs. I don’t mean to be a grinch, and I’m not saying that this type of insurance (time limited, of course) is a bad thing, but paying people to wait until a job just as good as their old one comes along should not go on for a period that is measured in years.

    More to the point, though, how is it a “jobs” initiative to pay people who, well, don’t have jobs? Again, even if you would persuade me that extending unemployment benefits is the right move, how would you persuade me that it is a “job creator?” It seems to me that it is just the opposite.

  • Dan Kempin

    Ok, seriously, without invoking all the political rhetoric that is certain to gum up the discussion, there is something that I don’t get. Unemployment benefits are to be extended into a THIRD YEAR for people who lost their jobs. I don’t mean to be a grinch, and I’m not saying that this type of insurance (time limited, of course) is a bad thing, but paying people to wait until a job just as good as their old one comes along should not go on for a period that is measured in years.

    More to the point, though, how is it a “jobs” initiative to pay people who, well, don’t have jobs? Again, even if you would persuade me that extending unemployment benefits is the right move, how would you persuade me that it is a “job creator?” It seems to me that it is just the opposite.

  • Steve Billingsley

    Did the President give a speech last night? How about them Packers?

  • Steve Billingsley

    Did the President give a speech last night? How about them Packers?

  • WebMonk

    Can this start job growth? No. But, I’m not sure any single set of programs could “start job growth”. There are a lot of issues that are keeping job growth low right now and many of them are essentially outside of any sort of influence by the government.

    A couple of those are pretty nice steps, IMO, and would have a positive impact on job creation; but, they are swamped by other forces and so will only have a tiny impact, if any.

    And for that tiny impact, the government will go another half a trillion dollars in debt. Obama’s claim about this being ‘paid for’, which I presume is intended to be translated as ‘paid without assuming more debt’, is utter nonsense.

    There’s a very good reason that he is submitting the jobs bill first, and then the bill that will pay for it later — there’s no freakin’ way it can be paid for without taking on more debt. My guess is that the ‘payment’ will be based on future higher tax revenues from all the continuing job growth they will hypothesize.

    Full of BS. Standard politics.

  • WebMonk

    Can this start job growth? No. But, I’m not sure any single set of programs could “start job growth”. There are a lot of issues that are keeping job growth low right now and many of them are essentially outside of any sort of influence by the government.

    A couple of those are pretty nice steps, IMO, and would have a positive impact on job creation; but, they are swamped by other forces and so will only have a tiny impact, if any.

    And for that tiny impact, the government will go another half a trillion dollars in debt. Obama’s claim about this being ‘paid for’, which I presume is intended to be translated as ‘paid without assuming more debt’, is utter nonsense.

    There’s a very good reason that he is submitting the jobs bill first, and then the bill that will pay for it later — there’s no freakin’ way it can be paid for without taking on more debt. My guess is that the ‘payment’ will be based on future higher tax revenues from all the continuing job growth they will hypothesize.

    Full of BS. Standard politics.

  • Jonathan

    It’s better than the GOP jobs plan. Oh, sorry, there is no GOP jobs plan, just more hatred of the president and of everything he says, does or thinks.

  • Jonathan

    It’s better than the GOP jobs plan. Oh, sorry, there is no GOP jobs plan, just more hatred of the president and of everything he says, does or thinks.

  • Martin J.

    The only thing on the list that will be helpful for creating jobs is the Employer tax cut for hiring new people who have been unemployed for an extended period of time. Possibly retraining for unemployed who are in older fields and need to get updated skills.

    Nothing else on this list will really make a dent.

  • Martin J.

    The only thing on the list that will be helpful for creating jobs is the Employer tax cut for hiring new people who have been unemployed for an extended period of time. Possibly retraining for unemployed who are in older fields and need to get updated skills.

    Nothing else on this list will really make a dent.

  • Cincinnatus

    Jon@7: There is no such thing as a viable “jobs plan.”

    I’ll sign on to the general consensus here that this plan, such as it is, is a terrible idea for a variety of reasons and will, in practice, amount to little better than the first stimulus program, which is widely acknowledged as a failure. Though the public wants the president to be seen as doing something, I don’t think further exploding the debt and duplicating an unpopular program (stimulus) is going to help is chances at reelection.

  • Cincinnatus

    Jon@7: There is no such thing as a viable “jobs plan.”

    I’ll sign on to the general consensus here that this plan, such as it is, is a terrible idea for a variety of reasons and will, in practice, amount to little better than the first stimulus program, which is widely acknowledged as a failure. Though the public wants the president to be seen as doing something, I don’t think further exploding the debt and duplicating an unpopular program (stimulus) is going to help is chances at reelection.

  • WebMonk

    Jon @ 7, that the republicans have a knee-jerk response to throw out anything the President is putting forward is obvious, however, the Republicans do have a “job plan” – cutting taxes. They’ve been pushing for it for months and months. Where have you been?

  • WebMonk

    Jon @ 7, that the republicans have a knee-jerk response to throw out anything the President is putting forward is obvious, however, the Republicans do have a “job plan” – cutting taxes. They’ve been pushing for it for months and months. Where have you been?

  • SKPeterson

    A better “jobs plan” would be to roll back much of the regulatory apparatus that is stifling profits and job creation, especially for small and medium-sized businesses. With so much regulatory overhead, firms aren’t going to bite on some minor temporary tax reductions in order to increase hiring. They need consistent and sustained regulatory relief in order to achieve some stability and begin hiring new workers.

  • SKPeterson

    A better “jobs plan” would be to roll back much of the regulatory apparatus that is stifling profits and job creation, especially for small and medium-sized businesses. With so much regulatory overhead, firms aren’t going to bite on some minor temporary tax reductions in order to increase hiring. They need consistent and sustained regulatory relief in order to achieve some stability and begin hiring new workers.

  • Jonathan

    Will it get Americans working?

    Maybe only temporarily, but it’s like pumping air into a popped tire. It won’t “fix” the economy. What the economy needs is new lifeblood, a breakthrough industry/technology to get it going again, like another .com goldrush. We just don’t have anything like that right now and it has stagnated the economy. However, lower taxes and les regulation on business might be the impetus that leads to the next big industry breakthough that can sustain the economy long term.

  • Jonathan

    Will it get Americans working?

    Maybe only temporarily, but it’s like pumping air into a popped tire. It won’t “fix” the economy. What the economy needs is new lifeblood, a breakthrough industry/technology to get it going again, like another .com goldrush. We just don’t have anything like that right now and it has stagnated the economy. However, lower taxes and les regulation on business might be the impetus that leads to the next big industry breakthough that can sustain the economy long term.

  • Tom Hering

    We’ve had a decade’s worth of tax breaks and deregulation for the “job creators.” Where’s the jobs?

  • Tom Hering

    We’ve had a decade’s worth of tax breaks and deregulation for the “job creators.” Where’s the jobs?

  • helen

    In India, Tom Hering….

  • helen

    In India, Tom Hering….

  • Jonathan

    Like I said, low taxes and deregulation is the impetus to developing the “next big thing”. Maybe we need to keep lowering them.

    Surely, you aren’t saying that increasing taxes and regulation is going to fix the economy and create jobs, are you, Tom H?

  • Jonathan

    Like I said, low taxes and deregulation is the impetus to developing the “next big thing”. Maybe we need to keep lowering them.

    Surely, you aren’t saying that increasing taxes and regulation is going to fix the economy and create jobs, are you, Tom H?

  • Martin J.

    Tom, that’s why the o nly tax break that will work is one that rewards hiring in a targeted manner. In terms of spending, I don’t see how any of these initiatives are going to help create jobs.
    The only one that I’d support is the one that helps to retrain the long term unemployed so they have competitve skills. But even that is not “creating jobs”.

  • Martin J.

    Tom, that’s why the o nly tax break that will work is one that rewards hiring in a targeted manner. In terms of spending, I don’t see how any of these initiatives are going to help create jobs.
    The only one that I’d support is the one that helps to retrain the long term unemployed so they have competitve skills. But even that is not “creating jobs”.

  • http://www.facebook.com/mesamike Mike Westfall

    ” … a tax credit of up to $4,000 for businesses that hire workers who have been looking for a job for more than six months. ”

    First we encourage the unemployed to live on the dole for up to 99 weeks, then we have to bribe employers to hire them back because many employers don’t want to hire anyone who’s been out of work for so long.

  • http://www.facebook.com/mesamike Mike Westfall

    ” … a tax credit of up to $4,000 for businesses that hire workers who have been looking for a job for more than six months. ”

    First we encourage the unemployed to live on the dole for up to 99 weeks, then we have to bribe employers to hire them back because many employers don’t want to hire anyone who’s been out of work for so long.

  • Steve Billingsley

    This isn’t exactly a direct response to the post, but yesterday I found this article by Kevin DeYoung that I thought was pretty interesting.

    http://thegospelcoalition.org/blogs/kevindeyoung/2011/09/08/daddy-where-do-jobs-comes-from/

    Most of the talk of “creating jobs” that comes from our political class is nonsense on stilts.

    Now as to the post itself, no this “jobs plan” isn’t much of a plan. It is a campaign speech with a hodge podge of small ideas that at best would have limited effectiveness. Manipulating tax rates with targeted tax breaks has been tried over and over again. And no, we do not need more regulation. We need simplified regulation that makes sense, is fairly easy to understand and comply with and that is actually enforced evenhandedly. That is not what we have now. We have some regulations that are contradictory and have been on the books so long that they have outlived their original purpose. We have others that are so diluted by loopholes built-in for favored constituencies that they are ineffective at best and counter-productive at worst. And we have yet others that are so complex and misunderstood and enforced in such a haphazard way that no one really knows how to comply. Our regulatory scheme, in my opinion is a much bigger impediment to our economy than marginal tax rates.

  • Steve Billingsley

    This isn’t exactly a direct response to the post, but yesterday I found this article by Kevin DeYoung that I thought was pretty interesting.

    http://thegospelcoalition.org/blogs/kevindeyoung/2011/09/08/daddy-where-do-jobs-comes-from/

    Most of the talk of “creating jobs” that comes from our political class is nonsense on stilts.

    Now as to the post itself, no this “jobs plan” isn’t much of a plan. It is a campaign speech with a hodge podge of small ideas that at best would have limited effectiveness. Manipulating tax rates with targeted tax breaks has been tried over and over again. And no, we do not need more regulation. We need simplified regulation that makes sense, is fairly easy to understand and comply with and that is actually enforced evenhandedly. That is not what we have now. We have some regulations that are contradictory and have been on the books so long that they have outlived their original purpose. We have others that are so diluted by loopholes built-in for favored constituencies that they are ineffective at best and counter-productive at worst. And we have yet others that are so complex and misunderstood and enforced in such a haphazard way that no one really knows how to comply. Our regulatory scheme, in my opinion is a much bigger impediment to our economy than marginal tax rates.

  • Tom Hering

    Helen @ 14, actually, the call centers in India are starting to move their operations to the U.S. Because with all our unemployment, they can now hire qualified workers here at lower wages than they pay in India. Nice, eh?

  • Tom Hering

    Helen @ 14, actually, the call centers in India are starting to move their operations to the U.S. Because with all our unemployment, they can now hire qualified workers here at lower wages than they pay in India. Nice, eh?

  • Cincinnatus

    Tom@19:

    Lower wages are not the reason call centers are moving back from India. AT&T is the most notable company moving its call centers back to American from abroad, and they’re only doing this to make their bid to take over T-Mobile, currently opposed by the Justice Department, more attractive to regulators (“Hey look, we’re supporting American jorbs!!”). But for other companies, despite the current regulatory and economic uncertainty in the United States, America is still a more reliable place to do business than India.

    You might also be interested to note that certain industries are also considering returning to the United States (and certain foreign companies are considering moving production facilities to the United States) because the costs to fuel and charter commercial cargo ships have grown prohibitive recently. Again, nothing to do with wages. It’s simply ludicrous to assert that it’s cheaper to hire an unemployed American than a Chinese worker.

  • Cincinnatus

    Tom@19:

    Lower wages are not the reason call centers are moving back from India. AT&T is the most notable company moving its call centers back to American from abroad, and they’re only doing this to make their bid to take over T-Mobile, currently opposed by the Justice Department, more attractive to regulators (“Hey look, we’re supporting American jorbs!!”). But for other companies, despite the current regulatory and economic uncertainty in the United States, America is still a more reliable place to do business than India.

    You might also be interested to note that certain industries are also considering returning to the United States (and certain foreign companies are considering moving production facilities to the United States) because the costs to fuel and charter commercial cargo ships have grown prohibitive recently. Again, nothing to do with wages. It’s simply ludicrous to assert that it’s cheaper to hire an unemployed American than a Chinese worker.

  • Cincinnatus

    More generally, here are some numbers to consider:

    Given America’s GDP of roughly $14 trillion dollars, Obama’s “jobs plan” of $447 billion represents 3.2% of the Gross National Product of the entire country (all debt-financed, of course). Guess how much economic growth Obama’s advisors are predicting this bill will stimulate? 1.5%

    Of course, this last number is one completely invented by Obama’s partisan advisors, and real growth rates as a direct result of the bill will almost certainly be lower. But am I missing something? I mean, I know my usage of numbers is a bit simplistic here, but I don’t see how this can possibly be perceived as a sound investment, even if we had the money to blow. Which we don’t.

    Evidence, perhaps, that Obama is only trying to assume the pretense of doing something decisive about the economy for the purposes of reelection.

  • Cincinnatus

    More generally, here are some numbers to consider:

    Given America’s GDP of roughly $14 trillion dollars, Obama’s “jobs plan” of $447 billion represents 3.2% of the Gross National Product of the entire country (all debt-financed, of course). Guess how much economic growth Obama’s advisors are predicting this bill will stimulate? 1.5%

    Of course, this last number is one completely invented by Obama’s partisan advisors, and real growth rates as a direct result of the bill will almost certainly be lower. But am I missing something? I mean, I know my usage of numbers is a bit simplistic here, but I don’t see how this can possibly be perceived as a sound investment, even if we had the money to blow. Which we don’t.

    Evidence, perhaps, that Obama is only trying to assume the pretense of doing something decisive about the economy for the purposes of reelection.

  • Tom Hering
  • Tom Hering
  • Cincinnatus

    Tom: You’ll notice that that article says almost nothing definitive except that “India still retains the overall cost advantage.” Indeed. There is no way that wages in the United States (except perhaps for illegal immigrants) are lower than they are in India. That’s simply implausible. Which is why the article doesn’t make any such claim. Rather, the article states that, overall, if conditions are right, it is sometimes cheaper to maintain a call center in certain parts of the United States than it is to maintain one in India, with all the political corruption, regulatory unpredictability/burdens, job training for non-English speakers, etc., that entails.

    I’m actually shocked (though I shouldn’t be) by this article. It’s one thing to make note of the interesting fact that call centers are moving back to the United States in some cases. It’s another thing altogether to imply that this is causes by plummeting American wages, capitalist exploitation, etc.–without providing a single piece of numerical data.

  • Cincinnatus

    Tom: You’ll notice that that article says almost nothing definitive except that “India still retains the overall cost advantage.” Indeed. There is no way that wages in the United States (except perhaps for illegal immigrants) are lower than they are in India. That’s simply implausible. Which is why the article doesn’t make any such claim. Rather, the article states that, overall, if conditions are right, it is sometimes cheaper to maintain a call center in certain parts of the United States than it is to maintain one in India, with all the political corruption, regulatory unpredictability/burdens, job training for non-English speakers, etc., that entails.

    I’m actually shocked (though I shouldn’t be) by this article. It’s one thing to make note of the interesting fact that call centers are moving back to the United States in some cases. It’s another thing altogether to imply that this is causes by plummeting American wages, capitalist exploitation, etc.–without providing a single piece of numerical data.

  • WebMonk

    Just as some more fodder for discussion, here’s a brief article by an economist on the President’s plan. His summary – reasonable and nothing crazy, but probably not going to have a big impact.

    http://www.freakonomics.com/2011/09/09/obamas-jobs-bill-a-reasonable-plan/

    A piece to note – the bill ‘costs’ 3% GPD, but only grows the economy by 1.5% GDP (before any possible multipier effects). That sounds about right. Multiplier effects will be minimal – the infrastructure part is the only part that will have such an effect, and it’s a small one. There are a couple places in there where I would argue with Wolfers, but in general it’s a decent analysis.

  • WebMonk

    Just as some more fodder for discussion, here’s a brief article by an economist on the President’s plan. His summary – reasonable and nothing crazy, but probably not going to have a big impact.

    http://www.freakonomics.com/2011/09/09/obamas-jobs-bill-a-reasonable-plan/

    A piece to note – the bill ‘costs’ 3% GPD, but only grows the economy by 1.5% GDP (before any possible multipier effects). That sounds about right. Multiplier effects will be minimal – the infrastructure part is the only part that will have such an effect, and it’s a small one. There are a couple places in there where I would argue with Wolfers, but in general it’s a decent analysis.

  • WebMonk

    And just to put out the disclaimer, I have a couple more fundamental issues with Wolfer’s views, but in the world of real-politic, I tend to agree with his view.

    The fundamental issue of whether the govt should be doing some of those things is totally different. If the relationship between our society and government isn’t going to be put onto a wildly different basis than what it is now (which would be necessary to fit my views of the ‘ideal’), then given that things will operate vaguely along the lines they have been operating, this bill isn’t horrible.

    Yes, that’s a lot of caveats. That’s what real-world politics is.

  • WebMonk

    And just to put out the disclaimer, I have a couple more fundamental issues with Wolfer’s views, but in the world of real-politic, I tend to agree with his view.

    The fundamental issue of whether the govt should be doing some of those things is totally different. If the relationship between our society and government isn’t going to be put onto a wildly different basis than what it is now (which would be necessary to fit my views of the ‘ideal’), then given that things will operate vaguely along the lines they have been operating, this bill isn’t horrible.

    Yes, that’s a lot of caveats. That’s what real-world politics is.

  • Steve Billingsley

    Tom @ 22
    So of course this means you are in complete agreement with President Obama’s recommendation to immediately pass the free-trade agreements with Panama, Colombia and South Korea, correct? Because there’s no chance that jobs could ever get outsourced there.

    I think Dr. Veith’s essential point is correct. The large majority of the jobs plan is cribbed together small-ball proposals that could just have easily been proposed by a Republican President. There is no big idea in the mix, no game-changer. I think that more than anything, it was a calculated proposal of “Republican-lite” ideas that mostly won’t be acted upon so that the President can try and run a Harry Truman style, “Look I want to help but those evil Republicans in Congress won’t let me” campaign. Except Truman’s ideas were generally popular and he didn’t have the baggage of signature, unpopular legislation to carry around. He could also believably play the role of the underdog defending the little guy. I don’t know that Obama can really carry that one off.

  • Steve Billingsley

    Tom @ 22
    So of course this means you are in complete agreement with President Obama’s recommendation to immediately pass the free-trade agreements with Panama, Colombia and South Korea, correct? Because there’s no chance that jobs could ever get outsourced there.

    I think Dr. Veith’s essential point is correct. The large majority of the jobs plan is cribbed together small-ball proposals that could just have easily been proposed by a Republican President. There is no big idea in the mix, no game-changer. I think that more than anything, it was a calculated proposal of “Republican-lite” ideas that mostly won’t be acted upon so that the President can try and run a Harry Truman style, “Look I want to help but those evil Republicans in Congress won’t let me” campaign. Except Truman’s ideas were generally popular and he didn’t have the baggage of signature, unpopular legislation to carry around. He could also believably play the role of the underdog defending the little guy. I don’t know that Obama can really carry that one off.

  • Tom Hering

    “So of course this means you are in complete agreement with President Obama’s recommendation to …”

    Yeah. That follows. “Of course.”

  • Tom Hering

    “So of course this means you are in complete agreement with President Obama’s recommendation to …”

    Yeah. That follows. “Of course.”

  • Martin J.

    Mike, #17
    You’ve obviously not lost a job during this current recession period. Many people who have did not lose their jobs because of any reason brought about by their own performance. And many of the ones who have had to look for extended periods are getting somewhere between $330-400 per week (if they were top-tier earners to begin with). So essentially, the guy or gal who was making $40K + per year is now making about $18K. So, you’re wrong. Just because someone is long-term unemployed does NOT mean that they want to be.

    The whole point of emphasizing job creation right now is that if someone is qualified to work, the ideal solution is to have jobs for them to work in!!

    As far as “bribing employers” — that’s exactly the point (although, I wouldn’t say “bribe). I think you and most Americans are blind to the fact that one of the reasons why there is so much unemployment is because employers can just tap someone on the shoulder for no legitimate reason and say goodbye. They make the employee sign a legal document that they won’t sue them, in exchange for the employer’s consent to allow the employee to collect unemployment. It is a cheap, efficient way for companies to cut their payroll costs without any consequences. So, creating a tax incentive for them to hire more people (or perhaps better would be to keep people they have) is a very good idea.

    I guess I could go along with the idea of not specifically incentivizing hiring the long-term over the short-term unemployed, but I do think that an incentive is very wise at this time.

  • Martin J.

    Mike, #17
    You’ve obviously not lost a job during this current recession period. Many people who have did not lose their jobs because of any reason brought about by their own performance. And many of the ones who have had to look for extended periods are getting somewhere between $330-400 per week (if they were top-tier earners to begin with). So essentially, the guy or gal who was making $40K + per year is now making about $18K. So, you’re wrong. Just because someone is long-term unemployed does NOT mean that they want to be.

    The whole point of emphasizing job creation right now is that if someone is qualified to work, the ideal solution is to have jobs for them to work in!!

    As far as “bribing employers” — that’s exactly the point (although, I wouldn’t say “bribe). I think you and most Americans are blind to the fact that one of the reasons why there is so much unemployment is because employers can just tap someone on the shoulder for no legitimate reason and say goodbye. They make the employee sign a legal document that they won’t sue them, in exchange for the employer’s consent to allow the employee to collect unemployment. It is a cheap, efficient way for companies to cut their payroll costs without any consequences. So, creating a tax incentive for them to hire more people (or perhaps better would be to keep people they have) is a very good idea.

    I guess I could go along with the idea of not specifically incentivizing hiring the long-term over the short-term unemployed, but I do think that an incentive is very wise at this time.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “I think you and most Americans are blind to the fact that one of the reasons why there is so much unemployment is because employers can just tap someone on the shoulder for no legitimate reason and say goodbye.”

    That is as it should be. There is no reason to have an employee unless you have work for him to do. No work is a legitimate reason to say goodbye. Employers are not so irrational that they fire good workers that make them money while retaining non-productive folks that don’t please customers or clients.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “I think you and most Americans are blind to the fact that one of the reasons why there is so much unemployment is because employers can just tap someone on the shoulder for no legitimate reason and say goodbye.”

    That is as it should be. There is no reason to have an employee unless you have work for him to do. No work is a legitimate reason to say goodbye. Employers are not so irrational that they fire good workers that make them money while retaining non-productive folks that don’t please customers or clients.

  • Bob

    Mike: Congratulations on having all the compassion of a dried turd.

  • Bob

    Mike: Congratulations on having all the compassion of a dried turd.

  • P.C.

    I’m glad I was one of 5.1 million Southern Californians who had their electrical power cut last night so I didn’t have to listen to President Obama’s continuous driveling. It was so peaceful and quiet with nearly a full moon to light up the backyard. Thank goodness my daughter was able to text us the scores of the Super Bowl Champions Packers defeating the Saints.

  • P.C.

    I’m glad I was one of 5.1 million Southern Californians who had their electrical power cut last night so I didn’t have to listen to President Obama’s continuous driveling. It was so peaceful and quiet with nearly a full moon to light up the backyard. Thank goodness my daughter was able to text us the scores of the Super Bowl Champions Packers defeating the Saints.

  • Martin J.

    SG: You also have no real experience with what employers do to employees now-adays.
    If the employer wants to cut the payroll, they ask the directors, dept leads, supervisors (whatever title) who to let go of. As I stated, in most cases the decisions of which people to let go are not based upon performance. Those days are LONG gone. It’s about who’s got who’s back, who goes out for drinks with you, and who goes along with the bosses every whim. If you think the decisions are mostly based on performance, you’re living in a dream state from 20 years ago, not reality.
    Why else do you think that every employer has a legal team to draft up a “will not sue” letter that agrees to allow the employee to collect umemployment?? We’re talking about most states being “at will employment” yet they feel compelled that they need these legalities to keep their butts out of court. Meanwhile, they’re using the UE dole to keep people’s mouths hushed.

  • Martin J.

    SG: You also have no real experience with what employers do to employees now-adays.
    If the employer wants to cut the payroll, they ask the directors, dept leads, supervisors (whatever title) who to let go of. As I stated, in most cases the decisions of which people to let go are not based upon performance. Those days are LONG gone. It’s about who’s got who’s back, who goes out for drinks with you, and who goes along with the bosses every whim. If you think the decisions are mostly based on performance, you’re living in a dream state from 20 years ago, not reality.
    Why else do you think that every employer has a legal team to draft up a “will not sue” letter that agrees to allow the employee to collect umemployment?? We’re talking about most states being “at will employment” yet they feel compelled that they need these legalities to keep their butts out of court. Meanwhile, they’re using the UE dole to keep people’s mouths hushed.

  • DonS

    Many good comments above.

    1. EMPLOYEE TAX CUTS — cost $175 billion. Temporary tax cuts, particularly payroll tax cuts, do nothing to stimulate permanent job growth, as should be obvious. This tax cut will put an extra $500 or so in workers’ pockets next year over what they’re getting this year. It’s nice, and might goose some consumer spending a little bit, but it won’t move the unemployment or GDP needle, and will harm future growth because of the increased national debt.

    2. EMPLOYER TAX CUTS. This is a new proposal. So, businesses having $5 million or less in payroll get a one year payroll tax cut. That’s nice for me — I fall in that category. However, a business doesn’t hire permanent employees based on temporary tax policy, and particularly because of a temporary payroll tax cut. See point 1 above for its marginal temporary benefits, and its cost of $65 billion is further debt for our kids and a drag on future growth.

    3. PUBLIC WORKS. — Here we go again. Our infrastructure is still a wreck, after spending $1 trillion on our first stimulus, which was supposed to address this problem. Another $105 billion added to our national debt probably isn’t going to solve it. A fraction of our kids will get some new school construction, and the bill. Whatever happened to the notion that the primary function of government is to provide and maintain infrastructure (public works)? Now it takes extraordinary measures and outrageous debt to get the job done, because our government spends almost all of its resources now on transferring wealth from disfavored people to favored people. Sad.

    4. UNEMPLOYMENT BENEFITS — at this point, we should just put ‘em all on Social Security, and make their retirement official. Seriously, I understand the issue of chronic unemployment, which is particularly acute in certain industries and includes many highly educated and motivated people. But they don’t want more handouts as much as they want our government to focus on permanent tax and regulatory reform which will truly create good jobs, through renewed action of an invigorated private sector. Government has become the bane of business, particularly small business, and that is a shame.

    5. LOCAL GOVERNMENT AID — support your local public employee union. We need desperately to reform our bloated and highly overcompensated public employee sector — they are taking excessive resources out of the private economy, costing private sector jobs, and sucking off resources from the truly needy. Propping up this sector for another year by borrowing more from our kids is ludicrously unproductive. We need reform, not a band-aid.

    6. EMPLOYER TAX CREDITS — no employer is going to hire a permanent employee because of a $4,000 tax credit. It will stimulate nothing. If they are hiring, they will hire whom they judge to be the best candidate, regardless of any temporary or one time tax boosts. Most hiring managers aren’t owners, and/or have no knowledge of complicated tax law, and this credit will certainly not be on their radar when making a hiring decision, anyway.

    7. EQUIPMENT DEDUCTION — depreciation tax law should be done away with permanently, not for one year.

  • DonS

    Many good comments above.

    1. EMPLOYEE TAX CUTS — cost $175 billion. Temporary tax cuts, particularly payroll tax cuts, do nothing to stimulate permanent job growth, as should be obvious. This tax cut will put an extra $500 or so in workers’ pockets next year over what they’re getting this year. It’s nice, and might goose some consumer spending a little bit, but it won’t move the unemployment or GDP needle, and will harm future growth because of the increased national debt.

    2. EMPLOYER TAX CUTS. This is a new proposal. So, businesses having $5 million or less in payroll get a one year payroll tax cut. That’s nice for me — I fall in that category. However, a business doesn’t hire permanent employees based on temporary tax policy, and particularly because of a temporary payroll tax cut. See point 1 above for its marginal temporary benefits, and its cost of $65 billion is further debt for our kids and a drag on future growth.

    3. PUBLIC WORKS. — Here we go again. Our infrastructure is still a wreck, after spending $1 trillion on our first stimulus, which was supposed to address this problem. Another $105 billion added to our national debt probably isn’t going to solve it. A fraction of our kids will get some new school construction, and the bill. Whatever happened to the notion that the primary function of government is to provide and maintain infrastructure (public works)? Now it takes extraordinary measures and outrageous debt to get the job done, because our government spends almost all of its resources now on transferring wealth from disfavored people to favored people. Sad.

    4. UNEMPLOYMENT BENEFITS — at this point, we should just put ‘em all on Social Security, and make their retirement official. Seriously, I understand the issue of chronic unemployment, which is particularly acute in certain industries and includes many highly educated and motivated people. But they don’t want more handouts as much as they want our government to focus on permanent tax and regulatory reform which will truly create good jobs, through renewed action of an invigorated private sector. Government has become the bane of business, particularly small business, and that is a shame.

    5. LOCAL GOVERNMENT AID — support your local public employee union. We need desperately to reform our bloated and highly overcompensated public employee sector — they are taking excessive resources out of the private economy, costing private sector jobs, and sucking off resources from the truly needy. Propping up this sector for another year by borrowing more from our kids is ludicrously unproductive. We need reform, not a band-aid.

    6. EMPLOYER TAX CREDITS — no employer is going to hire a permanent employee because of a $4,000 tax credit. It will stimulate nothing. If they are hiring, they will hire whom they judge to be the best candidate, regardless of any temporary or one time tax boosts. Most hiring managers aren’t owners, and/or have no knowledge of complicated tax law, and this credit will certainly not be on their radar when making a hiring decision, anyway.

    7. EQUIPMENT DEDUCTION — depreciation tax law should be done away with permanently, not for one year.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @32

    Actually, I do have experience, and I disagree. Just because the competent folks go out for drinks or go fishing together doesn’t mean that they aren’t the competent folks. Nothing is 100% perfect, but no, employers are not shooting themselves in the foot by keeping the unproductive over the productive. Now, all things being equal, sure, they would keep friends over uh, non friends. So, folks who are have higher social function have an advantage. No surprise there.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @32

    Actually, I do have experience, and I disagree. Just because the competent folks go out for drinks or go fishing together doesn’t mean that they aren’t the competent folks. Nothing is 100% perfect, but no, employers are not shooting themselves in the foot by keeping the unproductive over the productive. Now, all things being equal, sure, they would keep friends over uh, non friends. So, folks who are have higher social function have an advantage. No surprise there.

  • Martin J.

    sg: I don’t care to engage in going back and forth with a bunch of comments that amount to nothing more than “uh huh” ‘nuh uh.”
    The truth is that, yes, employers are shooting themselves in the foot, because moral relativism has taken over in the private sector and also because, as I have already made clear, the decisions are not made base on productivity as your naive view of the world would have it. The decisions are made based on personal favorites played by mid to lower level management. And even in the rarer cases where corporate looks at spreadsheet data to determine who’s getting cut, performance is NOT the top criteria they are looking at. They’re much more concerned with total cost to the company. For instance, how close to retirement if there is a pension? how much are the person’s benefits costing the company? etc… Those things outweigh performance at the corporate level. But in the final analysis personal favorites is the top deciding factor. Performance is one of the last things that really matter.

    It’s amazing the level of justification that someone with an entrenched view has to go to trying to defend a pet ideology. Really, people whose common bond is going out and getting drunk are assumed to be “more competent”? Really???

    Bottom line/key to this dicussion that you need to understand: If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits!!!

  • Martin J.

    sg: I don’t care to engage in going back and forth with a bunch of comments that amount to nothing more than “uh huh” ‘nuh uh.”
    The truth is that, yes, employers are shooting themselves in the foot, because moral relativism has taken over in the private sector and also because, as I have already made clear, the decisions are not made base on productivity as your naive view of the world would have it. The decisions are made based on personal favorites played by mid to lower level management. And even in the rarer cases where corporate looks at spreadsheet data to determine who’s getting cut, performance is NOT the top criteria they are looking at. They’re much more concerned with total cost to the company. For instance, how close to retirement if there is a pension? how much are the person’s benefits costing the company? etc… Those things outweigh performance at the corporate level. But in the final analysis personal favorites is the top deciding factor. Performance is one of the last things that really matter.

    It’s amazing the level of justification that someone with an entrenched view has to go to trying to defend a pet ideology. Really, people whose common bond is going out and getting drunk are assumed to be “more competent”? Really???

    Bottom line/key to this dicussion that you need to understand: If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits!!!

  • Lou

    ding, ding, ding…

    “If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits”
    Martin – exactly. All the haters who think folks “living on the unemployment dole” are lazy, incompetent, and unemployable totally miss this fact. If someone is fired with cause, they can’t collect unemployment benefits.

    People collecting unemployment have either been laid off or let go “without cause.” A person let go “with cause” would have to go to court to fight it in order to receive unemployment.

  • Lou

    ding, ding, ding…

    “If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits”
    Martin – exactly. All the haters who think folks “living on the unemployment dole” are lazy, incompetent, and unemployable totally miss this fact. If someone is fired with cause, they can’t collect unemployment benefits.

    People collecting unemployment have either been laid off or let go “without cause.” A person let go “with cause” would have to go to court to fight it in order to receive unemployment.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “It’s amazing the level of justification that someone with an entrenched view has to go to trying to defend a pet ideology.”

    Indeed.

    “Really, people whose common bond is going out and getting drunk are assumed to be “more competent”? Really???”

    No. Never said that. I assumed going out for drinks was a euphemism for socializing not getting drunk. And yes, the competent folks tend to get along with one another more than they do with the incompetent. Do you hang out with the slackers? If you were a manager, would you dump the competent and keep the slackers and incompetents? If not, then why such a low view of others? I just don’t see what you see, although it probably exists in a minority of cases. It is a losing strategy and therefore can’t be dominant for long.

    “Bottom line/key to this dicussion that you need to understand: If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits!!!”

    This is not true. Their performance would have to be extremely poor and well documented to avoid legal hassles in enough cases to make employers confident enough to do it. It is a trade off. How much does it cost to document and fire for cause vs. what it costs to layoff and let them collect unemployment.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “It’s amazing the level of justification that someone with an entrenched view has to go to trying to defend a pet ideology.”

    Indeed.

    “Really, people whose common bond is going out and getting drunk are assumed to be “more competent”? Really???”

    No. Never said that. I assumed going out for drinks was a euphemism for socializing not getting drunk. And yes, the competent folks tend to get along with one another more than they do with the incompetent. Do you hang out with the slackers? If you were a manager, would you dump the competent and keep the slackers and incompetents? If not, then why such a low view of others? I just don’t see what you see, although it probably exists in a minority of cases. It is a losing strategy and therefore can’t be dominant for long.

    “Bottom line/key to this dicussion that you need to understand: If the decision was based on performance, the ex-employee would not be able to collect unemployment benefits!!!”

    This is not true. Their performance would have to be extremely poor and well documented to avoid legal hassles in enough cases to make employers confident enough to do it. It is a trade off. How much does it cost to document and fire for cause vs. what it costs to layoff and let them collect unemployment.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “All the haters who think folks “living on the unemployment dole” are lazy, incompetent, and unemployable totally miss this fact. If someone is fired with cause, they can’t collect unemployment benefits.”

    It isn’t hate.

    And the “lazy, incompetent, and unemployable” is a straw man.

    People are laid off because there is not enough money to pay them and make a profit. The least productive go first on average. That doesn’t make them lazy or incompetent, but when you have to let people go because you can’t pay them, you keep the best ones you can. It isn’t malicious. It is just a rational decision in the general case.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “All the haters who think folks “living on the unemployment dole” are lazy, incompetent, and unemployable totally miss this fact. If someone is fired with cause, they can’t collect unemployment benefits.”

    It isn’t hate.

    And the “lazy, incompetent, and unemployable” is a straw man.

    People are laid off because there is not enough money to pay them and make a profit. The least productive go first on average. That doesn’t make them lazy or incompetent, but when you have to let people go because you can’t pay them, you keep the best ones you can. It isn’t malicious. It is just a rational decision in the general case.

  • Martin J.

    SG: Just cut your losses and stop. Just stop.
    I already said that they have their legal teams write documents that the employees have to sign promising not to sue, in exchange for the employer to allow them to collect umemployment. It’s a quid pro quo arrangement and they know it. It’s a quick, cheap, and risk free way for companies to chop payroll without consequences.
    (layoffs are a different animal than letting go without cause.
    I’m telling you, your pollyanna view of employers is no longer valid. (what do you do again, a housewife, is that right?)

  • Martin J.

    SG: Just cut your losses and stop. Just stop.
    I already said that they have their legal teams write documents that the employees have to sign promising not to sue, in exchange for the employer to allow them to collect umemployment. It’s a quid pro quo arrangement and they know it. It’s a quick, cheap, and risk free way for companies to chop payroll without consequences.
    (layoffs are a different animal than letting go without cause.
    I’m telling you, your pollyanna view of employers is no longer valid. (what do you do again, a housewife, is that right?)

  • DonS

    Wow, Martin J. @ 39. Talk about cutting your losses — “what do you do again, a housewife, is that right?”

    That’s a pathetic slur. And you are dead wrong about the law as well. If you are laid off or fired without cause, you are entitled to unemployment compensation. No employer agreement required. The only time you typically sign an agreement with an employer upon termination is to receive severance over and above what you have otherwise earned, or perhaps to avoid being terminated for cause, so that you are eligible for unemployment compensation.

  • DonS

    Wow, Martin J. @ 39. Talk about cutting your losses — “what do you do again, a housewife, is that right?”

    That’s a pathetic slur. And you are dead wrong about the law as well. If you are laid off or fired without cause, you are entitled to unemployment compensation. No employer agreement required. The only time you typically sign an agreement with an employer upon termination is to receive severance over and above what you have otherwise earned, or perhaps to avoid being terminated for cause, so that you are eligible for unemployment compensation.

  • Lou

    SG: People who are laid off typically belong to some type of union where workers are let go based on seniority, not productivity. The lay off can be categorized as temporary or permanent, but if the workers are to be brought back, it will be based on seniority.

    People who are let go without cause can and will sue if the employer doesn’t “CYA”. Let go with cause cannot collect unemployment without going to court.

  • Lou

    SG: People who are laid off typically belong to some type of union where workers are let go based on seniority, not productivity. The lay off can be categorized as temporary or permanent, but if the workers are to be brought back, it will be based on seniority.

    People who are let go without cause can and will sue if the employer doesn’t “CYA”. Let go with cause cannot collect unemployment without going to court.

  • Martin J.

    “If you are laid off or fired without cause, you are entitled to unemployment compensation. No employer agreement required.” Right – that’s what I said.

    “to avoid being terminated for cause, so that you are eligible for unemployment compensation.”
    Exactly my point. The employer is setting up a quid pro quo so that the employee doesn’t sue because of a lack of cause for termination. The government pays the unemployment benefit in exchange for the employee not suing — that is expressly stated in the agreement.
    So, you actually just proved my point.

  • Martin J.

    “If you are laid off or fired without cause, you are entitled to unemployment compensation. No employer agreement required.” Right – that’s what I said.

    “to avoid being terminated for cause, so that you are eligible for unemployment compensation.”
    Exactly my point. The employer is setting up a quid pro quo so that the employee doesn’t sue because of a lack of cause for termination. The government pays the unemployment benefit in exchange for the employee not suing — that is expressly stated in the agreement.
    So, you actually just proved my point.

  • DonS

    Lou @ 41: Outside of government, very few private sector employees are unionized anymore. I would say it is far more typical for small employers to lay off based on merit. They need to get the same job done with a smaller workforce, were typically leaner to begin with, so must ensure that they retain their best workers. Larger employers sometimes use merit-based layoffs, but oftentimes are more focused on seniority because it’s easier and the safest course legally.

  • DonS

    Lou @ 41: Outside of government, very few private sector employees are unionized anymore. I would say it is far more typical for small employers to lay off based on merit. They need to get the same job done with a smaller workforce, were typically leaner to begin with, so must ensure that they retain their best workers. Larger employers sometimes use merit-based layoffs, but oftentimes are more focused on seniority because it’s easier and the safest course legally.

  • DonS

    Martin @ 42: How is that what you said? Here is what you said @ 32:

    If the employer wants to cut the payroll, they ask the directors, dept leads, supervisors (whatever title) who to let go of. As I stated, in most cases the decisions of which people to let go are not based upon performance. Those days are LONG gone. It’s about who’s got who’s back, who goes out for drinks with you, and who goes along with the bosses every whim. If you think the decisions are mostly based on performance, you’re living in a dream state from 20 years ago, not reality.
    Why else do you think that every employer has a legal team to draft up a “will not sue” letter that agrees to allow the employee to collect umemployment??

    You’re talking about layoffs — cutting payroll — not firing for cause. You DON’T need to sign a “will not sue” letter, as you put it, to collect unemployment UNLESS you are fired for cause.

  • DonS

    Martin @ 42: How is that what you said? Here is what you said @ 32:

    If the employer wants to cut the payroll, they ask the directors, dept leads, supervisors (whatever title) who to let go of. As I stated, in most cases the decisions of which people to let go are not based upon performance. Those days are LONG gone. It’s about who’s got who’s back, who goes out for drinks with you, and who goes along with the bosses every whim. If you think the decisions are mostly based on performance, you’re living in a dream state from 20 years ago, not reality.
    Why else do you think that every employer has a legal team to draft up a “will not sue” letter that agrees to allow the employee to collect umemployment??

    You’re talking about layoffs — cutting payroll — not firing for cause. You DON’T need to sign a “will not sue” letter, as you put it, to collect unemployment UNLESS you are fired for cause.

  • Martin J.

    Don, I appreciate your coming to SG’s defense with regard to my question about the housewife issue, even though I do believe it is relevant to the conversation. I can see how it may have been personally hurtful and apologize for the way I stated it.

    But I have not made one untrue statement about the law. Everything I’ve said has been in perfect agreement with what the law states, I have merely talked about how employers manipulate the law to keep themselves out of court, while cutting their payrolls in a way that risk-free, cheap and highly inequitable. Nothing that you’re referenced in the law differs from what I’ve said, or would keep this from happening as I’ve described it.

  • Martin J.

    Don, I appreciate your coming to SG’s defense with regard to my question about the housewife issue, even though I do believe it is relevant to the conversation. I can see how it may have been personally hurtful and apologize for the way I stated it.

    But I have not made one untrue statement about the law. Everything I’ve said has been in perfect agreement with what the law states, I have merely talked about how employers manipulate the law to keep themselves out of court, while cutting their payrolls in a way that risk-free, cheap and highly inequitable. Nothing that you’re referenced in the law differs from what I’ve said, or would keep this from happening as I’ve described it.

  • Martin J.

    Don s. I’ve written more than that one paragraph. You need to read my comments, as this has been a long discussion. Also, Lou covered it as well. Neither one of us deny what you’ve stated.

  • Martin J.

    Don s. I’ve written more than that one paragraph. You need to read my comments, as this has been a long discussion. Also, Lou covered it as well. Neither one of us deny what you’ve stated.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Martin J.

    If you were a manager, would you dump the competent and keep the slackers and incompetents? If not, then why such a low view of others?

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Martin J.

    If you were a manager, would you dump the competent and keep the slackers and incompetents? If not, then why such a low view of others?

  • DonS

    Martin @ 45: We all say things we regret. Certainly, I hope, you don’t think that a woman who chooses to answer God’s calling to disciple her children by sacrificing outside career and staying in the home for a period of time is somehow disqualified to discuss issues of employment, or somehow in some other way has any less expertise or awareness of the world than anyone else. So, chalk it up to poor judgment, and apologize to sg, since she’s the one you wronged.

    As for the law, I disagree. You asserted, @ 32, that, during layoffs, companies force employees to sign indemnity letters so that they can collect unemployment compensation. That is patently untrue. In such cases, the employee is entitled to unemployment. I suspect that you are confusing the fact that, during layoffs, companies typically offer unearned severance (i.e. one week of pay for each year worked), and require, in exchange, the employee to sign a letter promising not to sue for wrongful termination.

    Might that be it?

  • DonS

    Martin @ 45: We all say things we regret. Certainly, I hope, you don’t think that a woman who chooses to answer God’s calling to disciple her children by sacrificing outside career and staying in the home for a period of time is somehow disqualified to discuss issues of employment, or somehow in some other way has any less expertise or awareness of the world than anyone else. So, chalk it up to poor judgment, and apologize to sg, since she’s the one you wronged.

    As for the law, I disagree. You asserted, @ 32, that, during layoffs, companies force employees to sign indemnity letters so that they can collect unemployment compensation. That is patently untrue. In such cases, the employee is entitled to unemployment. I suspect that you are confusing the fact that, during layoffs, companies typically offer unearned severance (i.e. one week of pay for each year worked), and require, in exchange, the employee to sign a letter promising not to sue for wrongful termination.

    Might that be it?

  • DonS

    Martin @ 46: We are cross-posting. That one paragraph, @ 32, was a wrong statement of the law, thus negating your statement @ 45, that “I have not made one untrue statement about the law. Everything I’ve said has been in perfect agreement with what the law states”.

    UNLESS, you are alleging that employers induce terminated employees, under false pretense by falsely representing that they will otherwise not be eligible for unemployment compensation, to sign letters they don’t need to sign. Are you alleging widespread fraud, on the part of employers? That would be most cynical, and those employers would be in huge legal trouble, as such things would certainly have been exposed by now.

  • DonS

    Martin @ 46: We are cross-posting. That one paragraph, @ 32, was a wrong statement of the law, thus negating your statement @ 45, that “I have not made one untrue statement about the law. Everything I’ve said has been in perfect agreement with what the law states”.

    UNLESS, you are alleging that employers induce terminated employees, under false pretense by falsely representing that they will otherwise not be eligible for unemployment compensation, to sign letters they don’t need to sign. Are you alleging widespread fraud, on the part of employers? That would be most cynical, and those employers would be in huge legal trouble, as such things would certainly have been exposed by now.

  • Lou

    DonS. – But layoffs in the private sector have become an endangered species. Corporations (non-unionized) mostly engage in what is now called “Right-sizing” (formerly known as downsizing). They use the let go without cause category for accomplishing this and it lets them off the hook in that they don’t have to bring the person back, if the work ramps up again.
    It is a misnomer perpetuated by the media that when a company announces massive cuts that they are “lay offs”, because technically they are not. Although, a mass cutback is closer to an actual layoff, than say, a small more randomized cutback (which is more like the type of thing Martin is talking about, I think).

  • Lou

    DonS. – But layoffs in the private sector have become an endangered species. Corporations (non-unionized) mostly engage in what is now called “Right-sizing” (formerly known as downsizing). They use the let go without cause category for accomplishing this and it lets them off the hook in that they don’t have to bring the person back, if the work ramps up again.
    It is a misnomer perpetuated by the media that when a company announces massive cuts that they are “lay offs”, because technically they are not. Although, a mass cutback is closer to an actual layoff, than say, a small more randomized cutback (which is more like the type of thing Martin is talking about, I think).

  • Martin J.

    “one paragraph, @ 32, was a wrong statement of the law” — Wrong. I was not making a statement of the law. Within the context of the discussion, I was describing what happens to a lot of employees these days.

    “UNLESS, you are alleging that employers induce terminated employees, under false pretense by falsely representing that they will otherwise not be eligible for unemployment compensation, to sign letters they don’t need to sign. Are you alleging widespread fraud, on the part of employers? ” – That’s exactly what I was saying. And I stand by it.
    (Just sit in the waiting room of the DOL for a few days and talk to some people. You’ll be shocked.)

  • Martin J.

    “one paragraph, @ 32, was a wrong statement of the law” — Wrong. I was not making a statement of the law. Within the context of the discussion, I was describing what happens to a lot of employees these days.

    “UNLESS, you are alleging that employers induce terminated employees, under false pretense by falsely representing that they will otherwise not be eligible for unemployment compensation, to sign letters they don’t need to sign. Are you alleging widespread fraud, on the part of employers? ” – That’s exactly what I was saying. And I stand by it.
    (Just sit in the waiting room of the DOL for a few days and talk to some people. You’ll be shocked.)

  • Martin J.

    “widespread fraud, on the part of employers”
    Technically, they acting completely within the bounds of the law, so it’s not fraud at this point (which actually makes it worse, I think)

  • Martin J.

    “widespread fraud, on the part of employers”
    Technically, they acting completely within the bounds of the law, so it’s not fraud at this point (which actually makes it worse, I think)

  • DonS

    Lou @ 50: All right. We’re talking about nomenclature. I think the common usage of the term “layoffs” nowadays reflects the fact that we are in a largely post-union culture — no future re-hiring rights typically apply. But, if you want to call it headcount reduction, or “right-sizing”, I guess you can.

  • DonS

    Lou @ 50: All right. We’re talking about nomenclature. I think the common usage of the term “layoffs” nowadays reflects the fact that we are in a largely post-union culture — no future re-hiring rights typically apply. But, if you want to call it headcount reduction, or “right-sizing”, I guess you can.

  • DonS

    Martin @ 52: Well, I guess I can’t say such a thing would never happen, but I suggest that you not believe everything you hear in a DOL waiting room. That is a room full of disgruntled and beaten-down people, and they are understandably bitter, and prone to stretch the truth a lot. There are far too many under-employed labor lawyers around for it to be at all credible that such gross fraud could occur on a widespread basis without publicity, criminal prosecution, and civil suits abounding.

    I am quite certain that you are thinking of the kinds of letters which are required in order to receive severance over and above earned pay, vacation pay, and the like.

  • DonS

    Martin @ 52: Well, I guess I can’t say such a thing would never happen, but I suggest that you not believe everything you hear in a DOL waiting room. That is a room full of disgruntled and beaten-down people, and they are understandably bitter, and prone to stretch the truth a lot. There are far too many under-employed labor lawyers around for it to be at all credible that such gross fraud could occur on a widespread basis without publicity, criminal prosecution, and civil suits abounding.

    I am quite certain that you are thinking of the kinds of letters which are required in order to receive severance over and above earned pay, vacation pay, and the like.

  • DonS

    Martin @ 52: “Technically, they acting completely within the bounds of the law, so it’s not fraud at this point (which actually makes it worse, I think)”

    NO!!!!! If an employer is telling an employee terminated because of a workforce reduction that they must sign a letter covenanting not to sue for wrongful termination, in exchange for being eligible for unemployment compensation, they are committing criminal fraud. Plain and simple.

  • DonS

    Martin @ 52: “Technically, they acting completely within the bounds of the law, so it’s not fraud at this point (which actually makes it worse, I think)”

    NO!!!!! If an employer is telling an employee terminated because of a workforce reduction that they must sign a letter covenanting not to sue for wrongful termination, in exchange for being eligible for unemployment compensation, they are committing criminal fraud. Plain and simple.

  • Martin J.

    “terminated because of a workforce reduction ”
    terminated without cause.

  • Martin J.

    “terminated because of a workforce reduction ”
    terminated without cause.

  • Lou

    I’d be interested in finding out just what the percentages are.
    How many people are technically classified as “laid off” vs. “let go without cause” vs. (fired)”let go with cause’ in the past two years.
    It could be a revealing study. Or it might not.

    I agree that DOL conversations probably should be taken with anecdotaly, not statistically reliable.

  • Lou

    I’d be interested in finding out just what the percentages are.
    How many people are technically classified as “laid off” vs. “let go without cause” vs. (fired)”let go with cause’ in the past two years.
    It could be a revealing study. Or it might not.

    I agree that DOL conversations probably should be taken with anecdotaly, not statistically reliable.

  • Lou

    oops. “should be taken anecdotally” (that time it wasn’t the keyboard; it was the opertor;)

  • Lou

    oops. “should be taken anecdotally” (that time it wasn’t the keyboard; it was the opertor;)

  • Martin

    SG: #47. Because that’s how it is, sorry to say. Think High School Politics on steroids. That’s what the modern workplace has become in most private sector industries.

  • Martin

    SG: #47. Because that’s how it is, sorry to say. Think High School Politics on steroids. That’s what the modern workplace has become in most private sector industries.

  • DonS

    Martin @ 56: Yes. Same thing.

  • DonS

    Martin @ 56: Yes. Same thing.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Don,

    Martin J. was just making the point that I am not out there right now in the environment he describes and that my views are probably outdated. That’s fair. I don’t consider housewife an insult.

    My point is just that he over generalizes his observations, not that that they are baseless.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    Don,

    Martin J. was just making the point that I am not out there right now in the environment he describes and that my views are probably outdated. That’s fair. I don’t consider housewife an insult.

    My point is just that he over generalizes his observations, not that that they are baseless.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @57 interesting idea. We could probably find those numbers, or proxies for them.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    @57 interesting idea. We could probably find those numbers, or proxies for them.

  • DonS

    You’re very charitable, sg.

    None of us have the broad-based experience in the market necessary to make the kinds of generalizations he was making, especially when he was accusing people of committing criminal fraud. Your viewpoints are at least as valuable as those of anyone else.

  • DonS

    You’re very charitable, sg.

    None of us have the broad-based experience in the market necessary to make the kinds of generalizations he was making, especially when he was accusing people of committing criminal fraud. Your viewpoints are at least as valuable as those of anyone else.

  • Cincinnatus

    Martin J.: Hold on a second. The employees who get ahead have, to some extent, always been those who are good at socializing, schmoozing, and networking. I’m not saying that competence is irrelevant–not in the least–but popularity has always been a significant factor in the career success of many, at the expense of those who don’t have it even if they are competent. Nothing has changed. So what? Why are you whining about it? The world isn’t and never has been a “fair” place if your sole standard of fairness is rewarding sheer competence (unless networking is included in the purview of competence!). Deal with it.

    So what’s your point? Are you implying that the government should prohibit companies from firing certain employees? How? Why? What exactly are you aiming at here?

  • Cincinnatus

    Martin J.: Hold on a second. The employees who get ahead have, to some extent, always been those who are good at socializing, schmoozing, and networking. I’m not saying that competence is irrelevant–not in the least–but popularity has always been a significant factor in the career success of many, at the expense of those who don’t have it even if they are competent. Nothing has changed. So what? Why are you whining about it? The world isn’t and never has been a “fair” place if your sole standard of fairness is rewarding sheer competence (unless networking is included in the purview of competence!). Deal with it.

    So what’s your point? Are you implying that the government should prohibit companies from firing certain employees? How? Why? What exactly are you aiming at here?

  • helen

    Martin @ 59
    Thanks for persisting, because you are right and “High school politics on steroids” is the most succinct description I have ever read for the phenomenon.

    Some people learn and do their jobs well, taking pride in their work.
    Others major in sucking up to management and are promoted.
    [I'm not saying that every promotion is undeserved; I know very good people who are going up, too.]

    But I have listened to the difference between the way an individual talks to those superior in rank, and the way she talks to those she perceives to be “inferior” . Managers who get the ‘butter treatment’ simply don’t believe it happens. So “incompetence” gets the promotion!
    I suppose the “Peter principle” will eventually go into effect, but meanwhile devotion to doing a good job seems futile sometimes. (You do it because those are your values and you have to respect yourself.)

    sg: Sometimes “who did the work around here” is only evident by work not getting done when he’s gone.
    And sometimes the “manager” got there by the sucking up method and promotes others no better than himself.

  • helen

    Martin @ 59
    Thanks for persisting, because you are right and “High school politics on steroids” is the most succinct description I have ever read for the phenomenon.

    Some people learn and do their jobs well, taking pride in their work.
    Others major in sucking up to management and are promoted.
    [I'm not saying that every promotion is undeserved; I know very good people who are going up, too.]

    But I have listened to the difference between the way an individual talks to those superior in rank, and the way she talks to those she perceives to be “inferior” . Managers who get the ‘butter treatment’ simply don’t believe it happens. So “incompetence” gets the promotion!
    I suppose the “Peter principle” will eventually go into effect, but meanwhile devotion to doing a good job seems futile sometimes. (You do it because those are your values and you have to respect yourself.)

    sg: Sometimes “who did the work around here” is only evident by work not getting done when he’s gone.
    And sometimes the “manager” got there by the sucking up method and promotes others no better than himself.

  • helen

    The point, Cincinnatus, is that it is not necessarily the “incompetent” who get laid off, so the unemployed should not be looked at or written about as “the slackers” as was being done.

    Yes, at one point, an employer gave me a ticket to the unemployment office in lieu of severance, and yes, I met people there who were not doing more than the necessary minimum to collect the check to its limit. But most of us were out of there long before we ran out of eligibility. It was possible to find another job then!

  • helen

    The point, Cincinnatus, is that it is not necessarily the “incompetent” who get laid off, so the unemployed should not be looked at or written about as “the slackers” as was being done.

    Yes, at one point, an employer gave me a ticket to the unemployment office in lieu of severance, and yes, I met people there who were not doing more than the necessary minimum to collect the check to its limit. But most of us were out of there long before we ran out of eligibility. It was possible to find another job then!

  • Cincinnatus

    helen: I still don’t understand the point, assuming that was even Martin’s point. There’s a difference between opposing all support for the unemployed altogether–which is something few (or no one) here are asserting–and opposing an effectively interminable window of time during which the unemployed can collect substantial tax dollars. And none of that has anything to do with whether unemployment insurance goes to the competent or incompetent.

    Yeah, so the stereotype about most unemployment compensation recipients being bums is oversimplistic. So what? No one should be living on the dole for three years if he is physically capable of doing literally anything else.

  • Cincinnatus

    helen: I still don’t understand the point, assuming that was even Martin’s point. There’s a difference between opposing all support for the unemployed altogether–which is something few (or no one) here are asserting–and opposing an effectively interminable window of time during which the unemployed can collect substantial tax dollars. And none of that has anything to do with whether unemployment insurance goes to the competent or incompetent.

    Yeah, so the stereotype about most unemployment compensation recipients being bums is oversimplistic. So what? No one should be living on the dole for three years if he is physically capable of doing literally anything else.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “sg: Sometimes “who did the work around here” is only evident by work not getting done when he’s gone.
    And sometimes the “manager” got there by the sucking up method and promotes others no better than himself.”

    Yeah, I agree, especially with the “sometimes” qualifier.

    Sometimes highly qualified productive folks are laid off, downsized, whatever, like, when there is no work. And yes, interpersonal skills do count for something. But no, on balance the more competent, conscientious folks are not at a disadvantage in securing or maintaining employment and promotions. In fact it is the opposite.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “sg: Sometimes “who did the work around here” is only evident by work not getting done when he’s gone.
    And sometimes the “manager” got there by the sucking up method and promotes others no better than himself.”

    Yeah, I agree, especially with the “sometimes” qualifier.

    Sometimes highly qualified productive folks are laid off, downsized, whatever, like, when there is no work. And yes, interpersonal skills do count for something. But no, on balance the more competent, conscientious folks are not at a disadvantage in securing or maintaining employment and promotions. In fact it is the opposite.

  • Lou

    Don S.:
    “terminated because of a workforce reduction ” and “terminated without cause” are clearly not “The Same thing” (#60) And that disstinction is WHY what employers are doing is not currently considered illegal.

    The case workers at DOL get a copy of the letter and can read for themselves exactly what is stated, so obviously it can’t be illegal.

  • Lou

    Don S.:
    “terminated because of a workforce reduction ” and “terminated without cause” are clearly not “The Same thing” (#60) And that disstinction is WHY what employers are doing is not currently considered illegal.

    The case workers at DOL get a copy of the letter and can read for themselves exactly what is stated, so obviously it can’t be illegal.

  • Martin J

    Lou @69: I agree. Terminated because of …. excludes Terminated without cause, by definition.

    Cincy: This is the crux of my point. I believe that the majority of people who are currently collecting unemployment in this country over the past two years fall into this spurious category of “terminated without cause” or (let go without cause as it is sometimes called.
    But but like Lou stated, I have not confirmed it statistically. I think I’m right on this, and if I am I think it gets at a root problem that could and should be addressed.
    Gotta run…

  • Martin J

    Lou @69: I agree. Terminated because of …. excludes Terminated without cause, by definition.

    Cincy: This is the crux of my point. I believe that the majority of people who are currently collecting unemployment in this country over the past two years fall into this spurious category of “terminated without cause” or (let go without cause as it is sometimes called.
    But but like Lou stated, I have not confirmed it statistically. I think I’m right on this, and if I am I think it gets at a root problem that could and should be addressed.
    Gotta run…

  • Lou

    Helen, “it is not necessarily the “incompetent” who get laid off, so the unemployed should not be looked at or written about as “the slackers” as was being done.” AMEN!!

  • Lou

    Helen, “it is not necessarily the “incompetent” who get laid off, so the unemployed should not be looked at or written about as “the slackers” as was being done.” AMEN!!

  • Lou

    Here is an intersting related article that I just found that I thought was illuminating:

    Private Sector Employees

    In most states, the law presumes that private sector employees are employed “at will.” The employment-at-will doctrine is that both employer and employee can end the employment relationship at any time without notice or reason. This means that your employer has the right to terminate your employment at any time, for any reason, or for no reason at all or for a bad reason, so long as the reason is not illegal — even if your performance has been outstanding. The other side of the “at will” coin is that you, as an employee, can quit your job for any reason at any time. You cannot be forced to work for an employer. You don’t have to give your employer a reason for quitting.

    The presumption for most non-union, non-governmental employees is that employment continues only at the will, whim, and discretion of the parties. If you are fired from your employment without just cause, you will be entitled to unemployment compensation benefits, but nothing more. Because of the employment-at-will doctrine, an unfair or unjust termination, without more, does not necessarily mean that your employer has done anything illegal.

    Being fired because your boss just doesn’t like you, or wants to hire her cousin to take your job, or has set impossible standards without giving you a chance to prove yourself, doesn’t mean that your employer has necessarily done anything illegal. None of these bad motives alone is illegal. Also, the fact that you have worked hard for many years and were a good performer does not, standing alone, protect you from termination.

    Most people believe an employer has a legal duty to treat employees fairly. Many people think an employer cannot fire an employee without just cause. Unfortunately, the general law is to the contrary. Because of the “employment-at-will” doctrine, employees have no general protection against unfair treatment. There is no “just cause” protection for non-union, non-government employees in the United States. This lack of protection is now the exception among highly industrialized countries. For example, all the countries of Western Europe have legislation prohibiting employers from discharging workers without just cause. In this country, the state of Montana, Puerto Rico, and the Virgin Islands have statutes prohibiting unjust termination. However, as of this writing, no other states have similar laws protecting employees. As a result, each year thousands of employees in the rest of the country are terminated unfairly and have no legal remedy to correct the injustice.

    –from Job Rights and Survival Strategies by Paul H. Tobias and Susan Sauter.

  • Lou

    Here is an intersting related article that I just found that I thought was illuminating:

    Private Sector Employees

    In most states, the law presumes that private sector employees are employed “at will.” The employment-at-will doctrine is that both employer and employee can end the employment relationship at any time without notice or reason. This means that your employer has the right to terminate your employment at any time, for any reason, or for no reason at all or for a bad reason, so long as the reason is not illegal — even if your performance has been outstanding. The other side of the “at will” coin is that you, as an employee, can quit your job for any reason at any time. You cannot be forced to work for an employer. You don’t have to give your employer a reason for quitting.

    The presumption for most non-union, non-governmental employees is that employment continues only at the will, whim, and discretion of the parties. If you are fired from your employment without just cause, you will be entitled to unemployment compensation benefits, but nothing more. Because of the employment-at-will doctrine, an unfair or unjust termination, without more, does not necessarily mean that your employer has done anything illegal.

    Being fired because your boss just doesn’t like you, or wants to hire her cousin to take your job, or has set impossible standards without giving you a chance to prove yourself, doesn’t mean that your employer has necessarily done anything illegal. None of these bad motives alone is illegal. Also, the fact that you have worked hard for many years and were a good performer does not, standing alone, protect you from termination.

    Most people believe an employer has a legal duty to treat employees fairly. Many people think an employer cannot fire an employee without just cause. Unfortunately, the general law is to the contrary. Because of the “employment-at-will” doctrine, employees have no general protection against unfair treatment. There is no “just cause” protection for non-union, non-government employees in the United States. This lack of protection is now the exception among highly industrialized countries. For example, all the countries of Western Europe have legislation prohibiting employers from discharging workers without just cause. In this country, the state of Montana, Puerto Rico, and the Virgin Islands have statutes prohibiting unjust termination. However, as of this writing, no other states have similar laws protecting employees. As a result, each year thousands of employees in the rest of the country are terminated unfairly and have no legal remedy to correct the injustice.

    –from Job Rights and Survival Strategies by Paul H. Tobias and Susan Sauter.

  • steve

    Hey guys, how about those 1,100 new additions to the unemployment rolls that Solyndra just contributed after receiving a half-billion dollar loan guarantee from the Department of Energy (a guarantee that I’m sure is completely unrelated to the fact that the 35% shareholder in the company was a major Obama contributor and fund-raiser).

    Just something to think about while we’re considering what the government will do to spur job growth. Meet the new boss…

  • steve

    Hey guys, how about those 1,100 new additions to the unemployment rolls that Solyndra just contributed after receiving a half-billion dollar loan guarantee from the Department of Energy (a guarantee that I’m sure is completely unrelated to the fact that the 35% shareholder in the company was a major Obama contributor and fund-raiser).

    Just something to think about while we’re considering what the government will do to spur job growth. Meet the new boss…

  • DonS

    Lou @ 69: When I said “same thing”, I didn’t mean precisely the same thing in every respect. I meant that it is the same from the point of view that in both cases, since the employee is terminated without cause (i.e. because of his/her documented poor performance or other malfeasance), he/she is by law entitled to claim unemployment benefits. That was the context of the discussion. Yes, obviously, there are non-legal distinctions between being terminated without cause, and being terminated as part of a workforce reduction. The latter looks better to future employers, for example. You may also be entitled to some re-training/outplacement benefits from your employer or the state if you are part of a workforce reduction. A larger employer may have to give you more notice if the workforce reduction is sufficiently large, or, alternatively, severance benefits. But those distinctions aren’t really relevant to this discussion, which was concerning eligibility for unemployment benefits.

    Your post @ 72 is a good summary of at-will employment law, and is in line with what I have posted here.

    The case workers at DOL get a copy of the letter and can read for themselves exactly what is stated, so obviously it can’t be illegal.

    I have no idea what you mean by this. What letter? Certainly not a letter wherein the employee agrees not to sue the employer for wrongful termination in exchange for unemployment compensation. That would be illegal, per se. Perhaps you are talking about a letter documenting that a workforce reduction is in process, and the employee presenting the letter is a part of it, and therefore entitled to unemployment benefits? And perhaps the employee signed the letter acknowledging receipt? I can see that happening, but not the employee signing away his rights under the law to bring a wrongful termination suit, for unemployment eligibility.

  • DonS

    Lou @ 69: When I said “same thing”, I didn’t mean precisely the same thing in every respect. I meant that it is the same from the point of view that in both cases, since the employee is terminated without cause (i.e. because of his/her documented poor performance or other malfeasance), he/she is by law entitled to claim unemployment benefits. That was the context of the discussion. Yes, obviously, there are non-legal distinctions between being terminated without cause, and being terminated as part of a workforce reduction. The latter looks better to future employers, for example. You may also be entitled to some re-training/outplacement benefits from your employer or the state if you are part of a workforce reduction. A larger employer may have to give you more notice if the workforce reduction is sufficiently large, or, alternatively, severance benefits. But those distinctions aren’t really relevant to this discussion, which was concerning eligibility for unemployment benefits.

    Your post @ 72 is a good summary of at-will employment law, and is in line with what I have posted here.

    The case workers at DOL get a copy of the letter and can read for themselves exactly what is stated, so obviously it can’t be illegal.

    I have no idea what you mean by this. What letter? Certainly not a letter wherein the employee agrees not to sue the employer for wrongful termination in exchange for unemployment compensation. That would be illegal, per se. Perhaps you are talking about a letter documenting that a workforce reduction is in process, and the employee presenting the letter is a part of it, and therefore entitled to unemployment benefits? And perhaps the employee signed the letter acknowledging receipt? I can see that happening, but not the employee signing away his rights under the law to bring a wrongful termination suit, for unemployment eligibility.

  • Betty

    And the Republicans are sure praying that their great white hope, whoever he is can knock out the black champion. I doubt whoever he is will. Teapublicans are too ignorant. I mean look at Bachmann and Perry (the greatest white hope). They will scare the general population once their views are known in the general election. And Romney is just a white Obama!

  • Betty

    And the Republicans are sure praying that their great white hope, whoever he is can knock out the black champion. I doubt whoever he is will. Teapublicans are too ignorant. I mean look at Bachmann and Perry (the greatest white hope). They will scare the general population once their views are known in the general election. And Romney is just a white Obama!

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “And Romney is just a white Obama!”

    Or more accurately, Romney is just an all white Obama!

    Sorry, couldn’t resist.

  • http://www.biblegateway.com/versions/Contemporary-English-Version-CEV-Bible/ sg

    “And Romney is just a white Obama!”

    Or more accurately, Romney is just an all white Obama!

    Sorry, couldn’t resist.

  • steve

    Wow, Betty, #75, was that sarcasm?

  • steve

    Wow, Betty, #75, was that sarcasm?

  • Martin J.

    Don @74, yes, the agreement between the employee and the employer that the employee has consented to termination without cause, whatever severance was agreed upon and his or her waiver of the right to legally contest the termination, thereupon being eligible for unemployment benefits. The signed copy of that document is in the ex-employee’s DOL case file to justify the reason for termination. This is the exact point that I have been trying to make.
    It IS legal. The fact that it offends your sensibilities just confirms the injustice of the situation.

  • Martin J.

    Don @74, yes, the agreement between the employee and the employer that the employee has consented to termination without cause, whatever severance was agreed upon and his or her waiver of the right to legally contest the termination, thereupon being eligible for unemployment benefits. The signed copy of that document is in the ex-employee’s DOL case file to justify the reason for termination. This is the exact point that I have been trying to make.
    It IS legal. The fact that it offends your sensibilities just confirms the injustice of the situation.

  • John

    Martin J., I’ve read through your comments, and I have some disagreements with your assessment of the situation. I work for a F500 and have personally fired over a dozen employees in the last three months. Our business serves other businesses, and our contract is set up so that we are paid by a driver (business talk for getting paid a set amount of money for a set amount of work, e.g. “$0.05 per unit”). In turn, we expect our employees to produce enough to pay their own wages and return a small profit. The people I fired were all failing to meet the standard and losing money for the rest of our team, for the building, for the corporation, and for the stakeholders. Retaining them would have been immoral, besides just bad business (and of course, present performance also dictates future contracts, so if we lose money everyone will be out of a job, not just the under-performers).

    And yet, when it comes to unemployment, almost all of them are collecting unemployment – because the legal requirements are arbitrary. For example, If I hire someone to do a certain job and they never put forth the effort achieve that goal, they will still receive unemployment – because in my state at least a business has to prove that an employee was capable of achieving before termination of employment is considered performance based. So if I hire you to paint seven widgets an hour, and you paint three, I am losing money – and the longer I keep you on, the more money I lose. If I terminate your employment, however, you get to collect unemployment because you never achieved the expected rate. I am sorry to say that we have hired many people who intentionally take advantage of this.

    As someone who is constantly hiring and firing for the sake of maintaining a profitable business, I find your comments a bit out of touch. In all my experience in logistics management I have only ever witnessed firings based upon one factor: engineering metrics created to measure performance against cost. I understand that my experience represents one sector of the economy, but it happens to represent the kinds of jobs that most blue-collar workers have. Perhaps white-collar jobs are different.

  • John

    Martin J., I’ve read through your comments, and I have some disagreements with your assessment of the situation. I work for a F500 and have personally fired over a dozen employees in the last three months. Our business serves other businesses, and our contract is set up so that we are paid by a driver (business talk for getting paid a set amount of money for a set amount of work, e.g. “$0.05 per unit”). In turn, we expect our employees to produce enough to pay their own wages and return a small profit. The people I fired were all failing to meet the standard and losing money for the rest of our team, for the building, for the corporation, and for the stakeholders. Retaining them would have been immoral, besides just bad business (and of course, present performance also dictates future contracts, so if we lose money everyone will be out of a job, not just the under-performers).

    And yet, when it comes to unemployment, almost all of them are collecting unemployment – because the legal requirements are arbitrary. For example, If I hire someone to do a certain job and they never put forth the effort achieve that goal, they will still receive unemployment – because in my state at least a business has to prove that an employee was capable of achieving before termination of employment is considered performance based. So if I hire you to paint seven widgets an hour, and you paint three, I am losing money – and the longer I keep you on, the more money I lose. If I terminate your employment, however, you get to collect unemployment because you never achieved the expected rate. I am sorry to say that we have hired many people who intentionally take advantage of this.

    As someone who is constantly hiring and firing for the sake of maintaining a profitable business, I find your comments a bit out of touch. In all my experience in logistics management I have only ever witnessed firings based upon one factor: engineering metrics created to measure performance against cost. I understand that my experience represents one sector of the economy, but it happens to represent the kinds of jobs that most blue-collar workers have. Perhaps white-collar jobs are different.

  • DonS

    Martin @78: But Martin, my whole point is that any letter an employee signs, waiving a legal right to sue, is only binding on him/her if the waiver is in exchange for unearned severance benefits. He/she is automatically entitled to unemployment if dismissed without cause. That’s the law, throughout the U.S.

  • DonS

    Martin @78: But Martin, my whole point is that any letter an employee signs, waiving a legal right to sue, is only binding on him/her if the waiver is in exchange for unearned severance benefits. He/she is automatically entitled to unemployment if dismissed without cause. That’s the law, throughout the U.S.

  • Martin J.

    John, I don’t doubt that there are many good companies out there trying to do the right thing. However, the way the system is set up it is ripe for abuse, especially in the case of white collar workers.

    There are two many issues in what you’ve described.
    1) As you mention, your situation is not applicable to white collar jobs. “So if I hire you to paint seven widgets an hour, and you paint three, I am losing money”. In the US marketplace, there are very few widget makers left in the workforce. The majority of jobs are in the knowledge/service/clerical fields, where subjectivity rules and clearly defined performance objectives are not upheld. As with just about every other sphere of American life, accountability is nearly non-existent in the corporate world.

    2) you wrote: “and the longer I keep you on, the more money I lose. If I terminate your employment, however, you get to collect unemployment” — not so easy . In order to collect unemployment, a worker must have been employed for at least two quarters in most states. Some states have the minimum at one year. In addition, the unemployment benefit is base on a percentage of income over the previous two years (or one year in some states) of earning. So, the earlier you terminate someone, the less opportunity there is for them to qualify for unemployment benefits.

    “because you never achieved the expected rate.” If a person has so blatantly not upheld the agreed upon performance standard, then the only truly just thing for you to do is to legally document it and terminate the person with cause (ie, fire them). In this case, they would not be eligible for unemployment and you would not have the problem of increasing your UE claims — or the additional expense of having to supplement their COBRA payments. That is unless they take you to court, but that should only be a problem if there is a dispute about their performance. However, you seem to make it a clear cut, cut and dry case.

    So, the real question still is the same one as before, why are coampanies terminating so many people “without cause”?? I have told you my hypothesis… I have yet to hear something more convincing

  • Martin J.

    John, I don’t doubt that there are many good companies out there trying to do the right thing. However, the way the system is set up it is ripe for abuse, especially in the case of white collar workers.

    There are two many issues in what you’ve described.
    1) As you mention, your situation is not applicable to white collar jobs. “So if I hire you to paint seven widgets an hour, and you paint three, I am losing money”. In the US marketplace, there are very few widget makers left in the workforce. The majority of jobs are in the knowledge/service/clerical fields, where subjectivity rules and clearly defined performance objectives are not upheld. As with just about every other sphere of American life, accountability is nearly non-existent in the corporate world.

    2) you wrote: “and the longer I keep you on, the more money I lose. If I terminate your employment, however, you get to collect unemployment” — not so easy . In order to collect unemployment, a worker must have been employed for at least two quarters in most states. Some states have the minimum at one year. In addition, the unemployment benefit is base on a percentage of income over the previous two years (or one year in some states) of earning. So, the earlier you terminate someone, the less opportunity there is for them to qualify for unemployment benefits.

    “because you never achieved the expected rate.” If a person has so blatantly not upheld the agreed upon performance standard, then the only truly just thing for you to do is to legally document it and terminate the person with cause (ie, fire them). In this case, they would not be eligible for unemployment and you would not have the problem of increasing your UE claims — or the additional expense of having to supplement their COBRA payments. That is unless they take you to court, but that should only be a problem if there is a dispute about their performance. However, you seem to make it a clear cut, cut and dry case.

    So, the real question still is the same one as before, why are coampanies terminating so many people “without cause”?? I have told you my hypothesis… I have yet to hear something more convincing

  • Martin J.

    DonS: “is only binding on him/her if the waiver is in exchange for unearned severance benefits” Not true. Severence benefits are typically paid in lieu of notice, since companies are required to give employees a certain amount of notice before terminating without cause.By paying severence, in essence the company is paying the worker for that period of time, but telling them that they are not to return to work during the period. So, from the DOL’s perpective, the employee’s period of employment would continue until the end of the period of severence, and during that period of severence they would not be eligible for an unemployment benefits. The severence period varies from state to state.
    Point being, the letter/agreement/waiver that companies have the terminated employee sign is a CYA for them legally, because even though most states are “at will employment”, they also recognize the company’s employee handbook or other official commnications as an implied contract between the employer and employee, which historically has come back to bite the employer in cases deemed ‘termination without cause”.

    You are correct, though, in that an employee who is terminated without cause is defacto eligible for unemployment. The lynchpin is that employers have the terminated employee sign the waiver/letter/agreement so that they will not be sued later on.

    So, in reality, if people were wiser about the situation, they wouldn’t sign and leave the door open for a lawsuit later on. The only trouble is they would most certainly have to go thru litigation before ever receiving any severence or unemployment benefit. Most poeple don’t want that kind of headache.

  • Martin J.

    DonS: “is only binding on him/her if the waiver is in exchange for unearned severance benefits” Not true. Severence benefits are typically paid in lieu of notice, since companies are required to give employees a certain amount of notice before terminating without cause.By paying severence, in essence the company is paying the worker for that period of time, but telling them that they are not to return to work during the period. So, from the DOL’s perpective, the employee’s period of employment would continue until the end of the period of severence, and during that period of severence they would not be eligible for an unemployment benefits. The severence period varies from state to state.
    Point being, the letter/agreement/waiver that companies have the terminated employee sign is a CYA for them legally, because even though most states are “at will employment”, they also recognize the company’s employee handbook or other official commnications as an implied contract between the employer and employee, which historically has come back to bite the employer in cases deemed ‘termination without cause”.

    You are correct, though, in that an employee who is terminated without cause is defacto eligible for unemployment. The lynchpin is that employers have the terminated employee sign the waiver/letter/agreement so that they will not be sued later on.

    So, in reality, if people were wiser about the situation, they wouldn’t sign and leave the door open for a lawsuit later on. The only trouble is they would most certainly have to go thru litigation before ever receiving any severence or unemployment benefit. Most poeple don’t want that kind of headache.

  • kerner

    This conversation may be winding down, but I have a couple observations. I am a self employed professional (well, technically I am an employee of my own sub-S LLC, but anyway) but there are reasons for that.

    I was never a very good “fit” in the professional firm world. Advance ment there required being a social and personal “fit” with both partners/shareholders, AND clients with money. I was never the kind of person who was very good at shmoozing the money clients, nor very good at churning files to produce maximum billable hours, nor kissing the butts of the higher-ups.

    To be fair, I was also not very good at communicating with higher-ups, nor with delegating important duties to underlings. So I run a largely one man show, and I run it my way. My client base tends to be middle to lower class people who will take my advice; whom I seem to be able to make comfortable without the shmoozing (or the kind of shmoozing) that wealthier people seem to need. I have had to organize the internal economics of my practise to accomodate that reality. Ironically, I’m doing better in this economy because my rates are very competitive and people have less to spend.

    Anyway, I completely understand the statements of Martin J and Lou to the effect that white collar jobs have standards of performance that are different from pure “widgets painted per hour”.

    When I was in school, I had a lot of blue collar jobs, and my experience was that cost vs. input was all management really cared about. In white collar land that was much less true.

    But as to this discussion of unemployment benefits vs. agreements not to sue, I think there are, in a lot of cases, tacit understandings that both employers and departing employees accecpt. The employers have to downsize. The employees have to have some kind of income after they go.

    Both sides recognise that, if they have to fight each other, their lives will be difficult and uncertain, and the discomfort of having to be constanly in a fight will be perpetual. But the UC system is there to be worked and they each agree to an arrangement that works the UC system in such a way that provide advantages and a level of certainty to each side that each side finds very valuable.

  • kerner

    This conversation may be winding down, but I have a couple observations. I am a self employed professional (well, technically I am an employee of my own sub-S LLC, but anyway) but there are reasons for that.

    I was never a very good “fit” in the professional firm world. Advance ment there required being a social and personal “fit” with both partners/shareholders, AND clients with money. I was never the kind of person who was very good at shmoozing the money clients, nor very good at churning files to produce maximum billable hours, nor kissing the butts of the higher-ups.

    To be fair, I was also not very good at communicating with higher-ups, nor with delegating important duties to underlings. So I run a largely one man show, and I run it my way. My client base tends to be middle to lower class people who will take my advice; whom I seem to be able to make comfortable without the shmoozing (or the kind of shmoozing) that wealthier people seem to need. I have had to organize the internal economics of my practise to accomodate that reality. Ironically, I’m doing better in this economy because my rates are very competitive and people have less to spend.

    Anyway, I completely understand the statements of Martin J and Lou to the effect that white collar jobs have standards of performance that are different from pure “widgets painted per hour”.

    When I was in school, I had a lot of blue collar jobs, and my experience was that cost vs. input was all management really cared about. In white collar land that was much less true.

    But as to this discussion of unemployment benefits vs. agreements not to sue, I think there are, in a lot of cases, tacit understandings that both employers and departing employees accecpt. The employers have to downsize. The employees have to have some kind of income after they go.

    Both sides recognise that, if they have to fight each other, their lives will be difficult and uncertain, and the discomfort of having to be constanly in a fight will be perpetual. But the UC system is there to be worked and they each agree to an arrangement that works the UC system in such a way that provide advantages and a level of certainty to each side that each side finds very valuable.

  • steve

    kerner, #83,

    “…I was never the kind of person who was very good at shmoozing the money clients, nor very good at churning files to produce maximum billable hours, nor kissing the butts of the higher-ups.

    To be fair, I was also not very good at communicating with higher-ups, nor with delegating important duties to underlings. So I run a largely one man show, and I run it my way.”

    Man, that could have been written about me word for word. I guess that’s my own personal felix culpa. I never felt very good about those shortcomings but they did force me into the position I’m in now.

  • steve

    kerner, #83,

    “…I was never the kind of person who was very good at shmoozing the money clients, nor very good at churning files to produce maximum billable hours, nor kissing the butts of the higher-ups.

    To be fair, I was also not very good at communicating with higher-ups, nor with delegating important duties to underlings. So I run a largely one man show, and I run it my way.”

    Man, that could have been written about me word for word. I guess that’s my own personal felix culpa. I never felt very good about those shortcomings but they did force me into the position I’m in now.

  • kerner

    I suspect that the way I do things is more compatible with 21st century economics. I have no unemployment insurance. I cannot be fired, per se, from my own business. On the other hand, I have to be constantly searching for new sources of income, or I will have no income.

    In one way I am an ultimate “at will” employee (nobody has to find a reason not to employ me, and I have no “the man” to resent if nobody does). Nobody pays me to go on vacation.

    On the other hand, by not being beholden to “the man”, I never have to sit around a DOL office wondereing what hit me.

    I think many businesses want a lot more workers to be like me (available when they need me, out of sight and mind when they don’t). How many companies want to work with subcontractors rather than hire new employees these days? A lot more than there used to be, I’ll bet. I realize that I have a prodession that has traditionally lent itself to independent contracting, but I am seeing independent contracting is areas where I never expected it. For example, I have a client who delivers packages for fedex. But he doesn’t work for fedex. He works for a small company that is a subcontractor for fedex. This company doesn’t provide health insurance, but it will direct him to a website that will help him purchase his own high deductable health insurance.

    What I’m gettng at is that companies don’t want to “take care” of their employees anymore. They want employees to learn to take care of themselves. As someone who has to largely take care of myself, I know the pros and cons of having to do that. So, is it a bad thing if other people have to learn to take care of themselves, not expecting an employer to do it for them, too? I don’t know. I don’t know if that many people are cut out to do things the way I do.

  • kerner

    I suspect that the way I do things is more compatible with 21st century economics. I have no unemployment insurance. I cannot be fired, per se, from my own business. On the other hand, I have to be constantly searching for new sources of income, or I will have no income.

    In one way I am an ultimate “at will” employee (nobody has to find a reason not to employ me, and I have no “the man” to resent if nobody does). Nobody pays me to go on vacation.

    On the other hand, by not being beholden to “the man”, I never have to sit around a DOL office wondereing what hit me.

    I think many businesses want a lot more workers to be like me (available when they need me, out of sight and mind when they don’t). How many companies want to work with subcontractors rather than hire new employees these days? A lot more than there used to be, I’ll bet. I realize that I have a prodession that has traditionally lent itself to independent contracting, but I am seeing independent contracting is areas where I never expected it. For example, I have a client who delivers packages for fedex. But he doesn’t work for fedex. He works for a small company that is a subcontractor for fedex. This company doesn’t provide health insurance, but it will direct him to a website that will help him purchase his own high deductable health insurance.

    What I’m gettng at is that companies don’t want to “take care” of their employees anymore. They want employees to learn to take care of themselves. As someone who has to largely take care of myself, I know the pros and cons of having to do that. So, is it a bad thing if other people have to learn to take care of themselves, not expecting an employer to do it for them, too? I don’t know. I don’t know if that many people are cut out to do things the way I do.

  • DonS

    Martin @ 82:

    “is only binding on him/her if the waiver is in exchange for unearned severance benefits” Not true. Severance benefits are typically paid in lieu of notice, since companies are required to give employees a certain amount of notice before terminating without cause.By paying severance, in essence the company is paying the worker for that period of time, but telling them that they are not to return to work during the period. So, from the DOL’s perpective, the employee’s period of employment would continue until the end of the period of severance, and during that period of severance they would not be eligible for an unemployment benefits. The severance period varies from state to state

    Martin, what did I say that is “not true”? Employment laws vary from state to state, but I am an employer in California, a very pro-worker state, and even here there is no requirement for notice when terminating an employee, even without cause. The only exception is for large-scale reductions in force, affecting only very large employers, who, under the WARN Act, must give 60 days notice (or equivalent severance) for these large scale reductions. But even for those cases, what I said was absolutely true. An employee cannot legally waive his right to sue in exchange for unemployment compensation eligibility or EARNED severance benefits (benefits required by the law are earned).

    Severance benefits that are paid in lieu of notice which is not legally required, or based on a formula (one week of pay per year of service, etc.), or any other unearned (i.e. not unused vacation or other leave, or pay for services) payment, i.e. voluntary payments, CAN be conditioned on a waiver signed by the employee. That is the ONLY kind of permissible waiver. Any employee who has been made to sign such a waiver in order to get his employer to pay legally required severance, or to somehow gain eligibility for unemployment insurance, unless they are co-participants in a fraudulent attempt to gain eligibility for benefits to which they are not entitled, has an outstanding legal case to bring against his employer.

  • DonS

    Martin @ 82:

    “is only binding on him/her if the waiver is in exchange for unearned severance benefits” Not true. Severance benefits are typically paid in lieu of notice, since companies are required to give employees a certain amount of notice before terminating without cause.By paying severance, in essence the company is paying the worker for that period of time, but telling them that they are not to return to work during the period. So, from the DOL’s perpective, the employee’s period of employment would continue until the end of the period of severance, and during that period of severance they would not be eligible for an unemployment benefits. The severance period varies from state to state

    Martin, what did I say that is “not true”? Employment laws vary from state to state, but I am an employer in California, a very pro-worker state, and even here there is no requirement for notice when terminating an employee, even without cause. The only exception is for large-scale reductions in force, affecting only very large employers, who, under the WARN Act, must give 60 days notice (or equivalent severance) for these large scale reductions. But even for those cases, what I said was absolutely true. An employee cannot legally waive his right to sue in exchange for unemployment compensation eligibility or EARNED severance benefits (benefits required by the law are earned).

    Severance benefits that are paid in lieu of notice which is not legally required, or based on a formula (one week of pay per year of service, etc.), or any other unearned (i.e. not unused vacation or other leave, or pay for services) payment, i.e. voluntary payments, CAN be conditioned on a waiver signed by the employee. That is the ONLY kind of permissible waiver. Any employee who has been made to sign such a waiver in order to get his employer to pay legally required severance, or to somehow gain eligibility for unemployment insurance, unless they are co-participants in a fraudulent attempt to gain eligibility for benefits to which they are not entitled, has an outstanding legal case to bring against his employer.

  • John

    @Martin J.-
    “In this case, they would not be eligible for unemployment and you would not have the problem of increasing your UE claims”

    That depends on the legal precedent set in one’s state. In my state, the legal precedent is that if the employer cannot prove the worker’s ability to achieve goal, then the (former) employee is eligible for unemployment benefits, although, again, my experience is in the “blue-collar” realm.

  • John

    @Martin J.-
    “In this case, they would not be eligible for unemployment and you would not have the problem of increasing your UE claims”

    That depends on the legal precedent set in one’s state. In my state, the legal precedent is that if the employer cannot prove the worker’s ability to achieve goal, then the (former) employee is eligible for unemployment benefits, although, again, my experience is in the “blue-collar” realm.

  • DonS

    Hmm. So, now we know the rest of Obama’s plan — to “stimulate” jobs and economic growth using permanent income tax INCREASES, offset by temporary payroll tax cuts. This guy has no clue about economics.

  • DonS

    Hmm. So, now we know the rest of Obama’s plan — to “stimulate” jobs and economic growth using permanent income tax INCREASES, offset by temporary payroll tax cuts. This guy has no clue about economics.


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