Unemployment benefits were paid to U.S millionaires during recession

Unemployment benefits of $80 million were paid by the U.S. government during the economic crisis to households with incomes over $1 million, of which $29.9 million was paid in 2010, according to U.S. tax authorities.

About 3,200 households, of which 20% were from New York, reported a gross income of over $1 million and received unemployment benefits of $12,600 a year on average in 2010, the latest year for which data are available, according to Bloomberg. The payments exceed the total income of about 25 million U.S. households.

The amount of $80 million represents less than 0.01% of the $845 billion U.S. budget deficit forecast for this year. However, unemployment benefits paid to millionaires reveal deficiencies of federal aid programs.

“So many people are taking advantage of government support that they probably feel like, why shouldn’t they take advantage of it, too?,” said George Walper, president of Spectrem Group, a consulting firm in Chicago, which keeps track of households with incomes over $1 million.

Congressmen have repeatedly tried to eliminate the payment of unemployment benefits to high-income families. House of Representatives approved in December 2011 a 100% tax on unemployment benefits to single filers with income over $1 million, or married people if the family income exceeds $2 million. The bill signed by President Barack Obama did not include this provision.

According to federal data, during the 2010 year, 810 millionaires that received unemployment benefits are from California and 610 are from New York.

32,000 jobs were eliminated in the New York financial sector between 2008 and 2012, where last year employees received benefits of $19.7 billion.

The total unemployment benefits paid last year have tripled to $94 billion compared with $33 billion paid in 2007. The budget for 2010 year recorded a peak of $150 billion payments in unemployment benefits.

The official unemployment rate was down to 7.6% from 7.7% In February, after adding 88,000 jobs in March. The real unemployment rate, taking into consideration discouraged and underemployed was at 13.8% in March, down from 14.3% in February.