The unemployment rules discouraged me from working.

Nearly three years ago, I signed up for New York State unemployment insurance.

It was easily one of the most humiliating experiences in my life, and it changed the way I think about unemployment and the economy — an insight particularly relevant now, as President Obama and congressional Democrats pitch the continued extension of unemployment benefits for up to 99 weeks.


I lost my job in January 2011. It was my first permanent job out of college, and losing it was mentally and financially traumatic. I spent the cab ride home, box in hands, fighting tears, and then worrying that I should have taken the subway instead because taxis are expensive and my income source had just vanished.

The Internet consensus is that unemployment isn’t welfare, but it felt like it to me. But my name was on a lease, my bank account was dwindling, and there was no telling when I’d find new work, so I reluctantly signed up, thoroughly hating it.

I got the maximum unemployment payment for New York: $405 a week. That would be plenty back in Wyoming, where I grew up. But it disappears almost supernaturally in Manhattan, even with the most rigorous of budgeting. I couldn’t afford to go out, but I was so deathly sick of sitting at home, sending out cover letters and résumés that nobody bothered acknowledging. A $1.50 cup of black coffee was a true indulgence, in part because it bought me an afternoon out. It was a miserable time.


Critics of long-term unemployment benefits say they provide a disincentive to work. Like many who are receiving unemployment, I wanted absolutely nothing more than to be gainfully employed again. Yet that disincentive to work defined my experience in a way I never would have expected.


Tired of being broke, I decided to amp up my efforts at freelance writing while I applied for jobs. It would bring in some extra income, and it would let me demonstrate to prospective employers that I had some personal hustle, that those gap months between jobs hadn’t been a total waste.

But unemployment makes freelancing complicated. According to the rules, “each day or part of a day of work will result in a payment of [only] a partial benefit.” If I worked one day, my unemployment payment would be only $303; two days meant only $202.50. If I earned more than $405 in a week, I got nothing.


That made freelancing costly for me, regardless of how much I wanted to spend my time productively. Say I earned $75 in one day of freelance work. I would then receive $303 in unemployment that week, and my total weekly haul would be $378 — less than the $405 in standard unemployment. In other words, if I couldn’t earn more than $100 in a day, I’d actually be losing money by working.


The unemployment rules also subjected me to a bizarre work schedule, because they stipulate that “you are considered employed on any day when you perform any services — even an hour or less — in self-employment, on a freelance basis, or for someone else.” In other words, taking two days instead of one to do an assignment meant I’d lose an extra hundred bucks. As a result, I tried to pack all my freelance writing and pitching into a single weekday, pulling the sort of late nights I’d once hoped I had left behind in college.

Moreover, the tough penalties made me think twice about sending out pitches. After all, though it might help me find permanent work faster, the unemployment rules defined work as “any activity that brings in or may bring in income at any time” (my emphasis). Sending out pitches could arguably be classified as work, even if an editor turned me down. And all work had to be reported, or I would be behaving fraudulently — which my unemployment packet warned “can lead to severe penalties, including CRIMINAL PROSECUTION and imprisonment” (their emphasis). So if an editor accepted my pitch, but said so in an e-mail sent the next day, was replying to him “work,” and was I risking stiff penalties if I failed to report it?


Figuring all this out felt shamefully like working the system. Unemployment benefits are supposed to tide people over between meaningful economic activity, but collecting them can be a job in itself. I wasn’t being “paid” $405 a week to be as productive as I possibly could. I was being paid to apply for jobs, and I risked losing pay by making the extra effort to provide for myself. For someone who doesn’t relish laziness, that’s an incredibly demoralizing choice.

A safety net can fast become a trap, and I wonder how many unemployed people who could be somehow engaged in the economy are waiting things out, taking their benefits and avoiding the risk of effort while they wait for something to open up. A shorter unemployment-benefit period would increase the pressure, awakening a creative work ethic in even the most reluctant. In retrospect, that would have been uncomfortable and stressful for me, but it would have changed my choices about how actively I tried to build a new, independent income source.

In the end, I took the risk and did as much freelance writing as I could manage. It paid off — in fact, it led to a job. After about two months, my somber tenure on unemployment came to an end. I had lost a lot of pride, and I had gained a lot of sympathy and admiration for my peers who were also struggling in the job market.

Though I felt alone at the time, I wasn’t. During the recession, unemployment peaked at 19.6 percent for 16-to-24-year-olds, my demographic at the time. And things haven’t gotten much better since. When those who have given up seeking a job altogether are factored in, the unemployment rate for 18-to-29-year-olds is now around 15.9 percent, according to Generation Opportunity’s Millennial Jobs Report, released in December. Underemployment is less often measured, but in 2012, Pew found that 49 percent of Millennials had taken jobs they would never have accepted otherwise because they needed the cash, and only 11 percent of 18-to-24-year-olds considered their job their career.


The economy clearly isn’t generating the jobs young people like me need — in large part because of the hostile and uncertain environment businesses face. From Obamacare to EPA overregulation to the proposed minimum-wage hikes, there are myriad well-intentioned policies that have resulted in less work for those who seek it.

Unemployment benefits are a temporary solution, one that helped me struggle through a rough patch. But extending them contributes to the underlying economic problem.

— Jillian Kay Melchior is a Thomas L. Rhodes Fellow for the Franklin Center for Government and Public Integrity.