theory vs. practice: inequity and inefficiency in govt programs for the unemployed

From Ianthe Jeanne Dugan in the WSJ...

The U.S. unemployment system is an uneven field of haves, have-nots and borderline cases, all found among the laid-off workers of a Maine company that makes wood products such as rolling pins and levers for reclining chairs.

When workers at a wholesale unit of Saunders Brothers lost their jobs in recent months, they qualified for Maine's standard state unemployment benefits of up to 26 weeks. Those laid off from a different Saunders plant qualified for a richer package -- two years of unemployment checks, health-care subsidies, free college and other perks.

And at the company's Fryeburg plant, once among the world's biggest rolling-pin producers, former general manager James Mains and dozens of co-workers got standard state benefits -- until they fought the government and got the more generous benefits, too....

The Saunders Brothers workers are the beneficiaries of an obscure federal program called Trade Adjustment Assistance....

The trade-adjustment program underscores broader problems with the way U.S. unemployment benefits are distributed. Critics say it's impossible to pinpoint who, exactly, is displaced by global trade. Moreover, they say, singling out a small class of unemployed Americans for richer benefits is discriminatory....

The U.S. unemployment-insurance system is a patchwork of state and federal programs. Each state administers its own benefits, doling out up to 26 weeks of checks based on the worker's former salary. In addition to TAA, there are federal programs for groups such as railroad workers.

"We don't run one unemployment program in this country. We run 53," says Howard Rosen, a fellow at the Peterson Institute for International Economics...

Most Americans who collect state unemployment benefits got a boost from the Obama stimulus plan signed in February. The federal government now offers an extra $25 a week to anybody drawing unemployment, and a tax credit to pay 65% of health insurance for up to nine months. The federal government also launched two emergency programs that potentially add 33 weeks for jobless who exhaust their benefits.

But the government sweetened the pot even more for TAA recipients...