You know the problem, surely, with unemployment insurance.
It’s so cushy, no one ever wants to go back to work. So trying to help people stay out of the poorhouse while they look for a job is simply counterproductive. Unemployment insurance actually creates unemployment.
You might have thought the unemployment rate was high because the economy was lousy. You could have erroneously concluded that we are living through an epidemic of joblessness. A record period of long-term fruitlessness for millions and millions of Americans.
In truth, what’s happening is one of those government things. The government takes money from productive members of society at gunpoint, and gives it to people who simply will not work.
Because why would they, if they can get that government check?
Don’t take my word for it. Here’s how a Fox News editorial explains it: “In reality, economists have shown that unemployment benefits actually increase unemployment because they increase the average duration of unemployment for individuals. There is less incentive to search for new employment when the government pays people as much as 60 percent of their previous salary to do nothing at all.”
Makes perfect sense. Who couldn’t survive easily on 40 percent less than they make right now? Who among us couldn’t see all the advantages to that, so long as you’re equipped with the weak moral fiber of a poor person? Which members of this society, I wonder, could arrive at the idea that the sudden, unexpected loss of half your income might actually be an incentive?
It’s always tricky to assert what “economists have shown.” They have shown so many different things, these economists, and oftentimes what they show is not so simple. Economists have shown that raising the minimum wage does not hurt employment, and yet you tend not to hear that one argued. One thing that economists are showing a lot of these days is a historic level of long-term joblessness.
In response, Congress has extended jobless benefits, from the 26 weeks to 99 weeks, and the debate will arise once again in February. We will certainly hear about lazy scammers. We will certainly hear about incentives to “do nothing at all.” We will certainly hear that if we help people with no jobs – help them buy ramen and pay rent – we are actually keeping them jobless.
I hear this rationale with some frequency, in the political press and from people who write to educate me about the economic realities. In the land of economic realities, certain truths are held to be self-evident, and one of them is this: There are jobs out there.
Maybe they’re not great jobs. Maybe they’re not what you’re hoping for.
But they are absolutely, positively there.
I wish I had started keeping track, months ago, of the number of times people wrote or called to assure me of this. Every time I wrote about someone who was looking without success for work, this would happen – emails and calls, assuring me that this person was simply choosy or lazy, simply too warmed up by the love and cush of all that wondrous unemployment insurance.
These people often share with me a story of how they once did a difficult, unappealing job. Mucked a stable. Served French fries. Case closed.
Never mind that, in reality, economists have shown that there are 13 million people officially out of work. There are 8 million “involuntary” part-time workers, who’d rather work full-time. There are 2.5 million more who have stopped looking.
What, in reality, do economists show? A report prepared in December by the chairman of the Senate Joint Economic Committee compiled some of the things.
“The problem,” according to the report, “is the jobs simply are not there. A string of 21 consecutive months of expanding private-sector payrolls has added nearly three million jobs; however, there are still more than 4 job seekers for every job opening, not including an additional 2.6 million individuals who would like to work but have given up looking for work because they do not believe there are jobs for them.”
About a third of the unemployed have been jobless more than a year. More than 40 percent have been without work beyond the normal six-month deadline for benefits. In February, more than 2 million 99-ers – people who’ve exhausted their unemployment benefits – will reach the end, unless Congress extends their benefits.
“Claims that extended UI benefits deter unemployed workers from looking for work are unfounded,” says the report, prepared for Sen. Bob Casey, the Pennsylvania Democrat. “On the contrary, beneficiaries of federal UI benefits have spent more time searching for work than those who were ineligible for UI benefits.”
That’s because jobless benefits require you to look for a job. An economist at the University of California-Berkeley has calculated that extended unemployment benefits accounted for no more than half a percentage point of the doubling of the unemployment rate during this recession.
“More importantly,” the report continues, “any increase in the unemployment rate because of federal UI benefits is most likely because the beneficiaries remain attached to the labor force and continue to search for work, not because they refuse employment or do not search for a job.”
That’s based on a Goldman Sachs employment report. It’s just one more of those things that economists show.