Maybe this 1099 reporting project is to keep track of an underground or cash economy. If there are fewer credit transactions, more cash changing hands, inventory being purchased for cash and sold for cash, tougher for the IRS to audit that second set of books. The 1099 will leave a trail.
Only if they're filed. Ya gotta wonder how many "street vendors" will comply with this. (No..I don't mean druggies.)
If you continue to rely on your faulty self-knowledge, you will have a hard life. The self-employed CAN get unemployment benefits; they just have to follow the proper procedures and rules. Basically, they are buying their own UI, and wallowing through the associated rules.