Millionaires and unemployment: The guidelines need to be changed

Just more than a year ago, Amanda Clayton won $1 million in the Michigan state lottery and later was charged by the state’s Attorney General for welfare fraud because she continued to collect welfare benefits including food stamps. At the time, Clayton, who recently was found dead of a possible drug overdose, defended her actions saying she was entitled to the benefits because she still needed help.

People across the country were outraged. Clayton was found guilty of felony welfare fraud, ordered to repay the $5,500 she received in food and medical benefits after winning the lottery, and sentenced to nine months probation.


And now, according to IRS data and the Congressional Research Service, which is a non-partisan arm of Congress that provides policy and legal analysis, nearly 2,400 millionaires filed for, and received unemployment benefits in 2009. More than 1,000 of that figure had a household adjusted gross income of $1.5 million.

The report is titled “Receipt of Unemployment Insurance by Higher-Income Unemployed Workers”  and it found that a total of $20.8 million in unemployment benefits went to millionaires.

It must have been a good year for millionaires in 2009, though, because the number of millionaires collecting unemployment benefits was down from 2,840 in 2008.

Millionaires also reap the benefits of Social Security, too. In 2008, according to the IRS, nearly 57,000 taxpayers who reported more than $1 million in income also collected Social Security payments.

The report, and unemployment benefits, isn’t just limited to millionaires. According to the report, more than 8,000 tax filers making $500,000 to $1,000,000 received unemployment benefit income in 2009 and more than 900,000 tax filers that made $100,000 to $500,000 received unemployment benefit income.

Where’s the outrage now?

I know there are many who will feel the anger in these statistics, especially those in the middle and lower class who are struggling financially and still may be unemployed in this slow-to-recover economy.

I also know there are going to be those voices claiming the rich are doing nothing illegal: they paid into the system, they qualify under the legal guidelines, and they only are getting what is rightfully due them.

As Bill Brenzel, a guest scholar at the Brookings Institute and former Republican member of Congress, told ABC News, “It sounds scandalous when you hear that millionaires are going to collect unemployment insurance. On the other hand, millionaires get unemployed too and have made payments into the unemployment insurance.”

Maybe so.

But when people who earn a million dollars or more a year begin receiving unemployment benefits, social security and are able to take advantage of tax loopholes not financially available to middle and lower class folks who know the true meaning of economic strife, then something is wrong with the overall picture.

It might be on the up-and-up, but it just doesn’t pass the smell test especially when you look at what happened to Amanda Clayton: She was penalized for becoming a millionaire and collecting government assistance…something other millionaires apparently have been doing for years without penalty.

I’m thinking that all government benefits should be based on income rather than irrespective of income levels.

And there are some in Congress who think so, too.

Early last year, Sen. Tom Coburn, R-Oklahoma, introduced “Ending Unemployment to Jobless Millionaires Act of 2011,” a bill designed to stop payment of federal funds for unemployment compensation to individuals whose “resources in the preceding year” was $1 million or more.

The bill currently is drowning in the House of Representatives. And given the fact most politicians cater to the rich, it’s doubtful Coburn’s bill will come up for air anytime soon.

2 Responses

  1. Hi Chuck, great perspective! HuffPost Live is hosting a discussion about this very topic tomorrow (10/17/2012) at 2:30pm EST. Would you be interested in joining us via webcam? If interested, please email me at Thanks!

  2. I leave a response when I appreciate a article on a website or if I have something to contribute to the conversation.

    Usually it’s triggered by the passion displayed in the post I browsed. And on this post Millionaires and unemployment: The guidelines need to be changed � View From the Midwest. I was actually excited enough to post a thought 😉 I actually do have a couple of questions for you if it’s okay.
    Could it be just me or does it appear like a few of
    the responses look as if they are coming from brain dead
    folks? 😛 And, if you are writing at additional sites, I would like to follow you.

    Could you list every one of all your public pages like your twitter feed, Facebook page or linkedin profile?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: