Unemployment Insurance Overpayments Rampant

The Wall St. Journal's Real Time Economics blog recently had a snippet on overpayments in the unemployment insurance system. According to Labor Department data cited by author Sara Murray, over $19 billion, or more than 10% of the total amount paid out in the three years to July, was paid out in error. Though some states count payments made under comparatively innocuous errors (like filling out two job searches rather than three) toward this total, some of the numbers, both absolute and in percentage terms, are nonetheless alarming. To compare and contrast the states, visit the Real Time Economics graphic based on labor department data here. Additionally, the Labor Department provides a heat map here as well as the base data here.

The federal government seems to be as concerned about this problem as many taxpayers are likely to be, and its response has been swift. According to a statement which can be found here, the Department of Labor has established a task force to explore why overpayments have been made and is working with 'high impact' states to 'aggressively address improper payments.'

While the unemployment insurance system has proven critical during the nation's economic downturn, it is important for the government to determine why and how the system has broken down. Overpayments put strain on an already overburdened system and provide ammunition for those who would see the scope of unemployment insurance programs scaled back. It behooves both taxpayers and proper recipients to ensure that the program is being utilized correctly. Here's hoping that the task force is able to accomplish more than meaningless studies.

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