With all the fussing and fighting about extending unemployment benefits, you’d think everyone gets them. Not so:
The fraction of people who are eligible for unemployment benefits and actually receive them varies significantly across states, and is only about 65 percent or 60 percent, on average, in the U.S. Now, that’s particularly striking when you compare it to the numbers in Europe, where that number is more like 95 percent or 97 percent.
Part of the reason is that companies have an incentive to challenge claims:
When you lay off lots of workers, as a company, you have to pay higher unemployment taxes. Employers have an incentive to try to contest individuals’ unemployment benefit claims, because they are paying part of the cost of — of those unemployment benefit claims.
So, of course, companies like Talx have sprung up to address the market demand for throwing sand in the gears of the unemployment system:
Indeed, years of e-mail messages, obtained through an open records law, show a continually exasperated Wisconsin staff. While a few cited improved performance, others complained that Talx “returned half-empty questionnaires,” sent back “minimal or ‘junk’ info,” reported in error that applicants were dead, filed “frivolous protests” and caused “the holdup of many claims.”
Where the less enlightened among you might see obstruction, I see entrepreneurs addressing a clear market need.