These are well-paid white collar professionals, they should be saving up emergency funds.
I'm more worried about the safety net for low- and mid-income workers, as well as the fact that health insurance is tied to your employment.
And yes, people should have emergency funds... but when you were a few years out of college, did you have 3-6 months of salary saved up? I certainly didn't.
because as a taxpayer i have been covering mortgage of somebody unemployed. So i expect (due to social contract of safety net) that if i happen to be unemployed than some other taxpayer(s) will cover my mortgage.
ALG1 comes out of the mandatory unemployment insurance (that you and your employer have paid for every month) and they will pay you 60% of your previous take-home salary + health insurance for half of the timespan that you'd been employed. That comes out to 1500-2000€/m in your pocket and insurance taken care of, which is really not so bad (a lot of people working full time make less than that). Can be more if you made north of 50K a year. Unless you have a crazy mortgage, you can make things work for a while. Also, if you hadn't had a pretty solid job for years, you wouldn't have gotten a mortgage anyway.
After 24 months max and still no job you would fall back to ALGII though. That's is taxpayers' money and essentially rent for a cheap place, health insurance and 400 € in your pocket, which sucks. Plus you have to liquidate any assets you may have left (including life insurance) first and they will make you take a shitty job.
Anecdotal, but one of my older buddies was laid off. He's been earning north of $250k for over 30 years. He had savings, but assuming he didn't, his max withdrawal would be $698 a week, and only for 6 months, which is a max withdrawal of ~$18k, which is right around what he paid in to unemployment in a year. Ignoring that he'd been paying in ~$15k for years (or, I guess, half of that for awhile, as the pay-in percentage used to be lower), then he's not taking taxpayer dollars, he's taking his own money back. Or at least, a fraction of it, because the state made a lot more off of him than he made off of the state.
If he shouldn't be able to profit off of the state, then the state shouldn't be able to profit off of him.
Otherwise though, the compelling reason that unemployment should be enough to cover one's mortgage is because it is specifically designed to prevent homelessness, as the taxpayer cost of allowing him to go homeless because he had a few week lapse between employment and unemployment benefits is substantially higher than simply giving him more of his own money back.
That's not how "social safety nets" work. They tend towards being zero-sum in monetary terms, which means that some people will "win" (those worse off, hopefully) and some will "lose". The idea is that such devices help balance and stabilize society, which means we all actually win.
If the caps are so short and arbitrary, unless I'm missing something, the state is pocketing a ton. Perhaps that's okay, because it does definitely defend against the "everybody's out of work" scanario that we haven't really had in awhile, despite the recession. Or maybe it just means that there are more people who need it more than I'm envisioning, or that it disproportionately favors the lower incomes, or any other number of factors.
The point though, which I've perhaps done a poor job of illustrating, is that it still behooves the state to ensure that earners with high wage potential aren't made homeless as a result of those caps.
If the higher wage earners get less benefit from the system, then so be it, but that means that the system needs them more than they need it, and as a result, should probably not be bankrupting those with high income potential, just because "we shouldn't be debt servicing their assets".
FUTA is only paid on the first $7,000 of an employee's income. The state portion of unemployment insurance is generally similarly capped, just like FICA (Social Security/Medicare) tax.
So your point is invalid.
It's to ensure basic needs are met.
If you want to remain wealthy, you should probably not count on unemployment to play a role in that.
This is to ensure that people don't have to sell or move immediately after being fired. Which makes sense.
If someone wants to make the commitments of mortgages or dependents, then that's on them and they still need to have that 3-6 month emergency fund, except the amount will be higher because of the added responsibilities.
Absolutely. This was my first priority. This is personal finance 101 (though I'd replace 'salary' with 'expenses'). I realize not everybody is able to do it, but for many in this forum it would be an issue of prioritization.
Actually, I did and it was a top-priority for me.