Posted on 06/30/2014 7:54:07 AM PDT by reaganaut1
...
I met a recruiter—a man whose job it is to find employees for businesses and put unemployed people into new jobs—and he described the trade-off pretty well. Stacey Reece was his name, and he said that in 2009 his clients again had jobs to fill. But he ran into a hurdle he hadn't seen before. People would apply for jobs not with the intention of accepting it, but to demonstrate to the unemployment office that they were looking for work.
As Mr. Reece described it, the applicants would use technicalities to avoid accepting a position. The applicants would take Mr. Reece through the arithmetic of forgone benefits, taxes, commuting costs and conclude that accepting a job would net them less than $2 per hour, so they'd rather stay home.
People remain unemployed longer, as Mr. Reece saw with his own eyes.
...
Unlike state unemployment-insurance benefits that are sometimes a kind of liability for the employer writing the pink slip, the federal unemployment-insurance expansions were paid by taxpayers generally, which means that an employer could lay off as many people as he wanted without adding to his federal tax burden.
Maybe more vivid was the kind of ObamaCare experiment in the American Recovery and Reinvestment Act of 2009 that told unemployed people that "if you like the health plan you had on your old job, you can keep it," and the federal government will pay. Before the Recovery Act, many employers used to voluntarily help employees with their insurance after a separation; these were expensive benefit programs for their employees. The employers had to consider that laying somebody off was going to end the value created by the employee but wasn't going to end the health expenses the employee creates.
(Excerpt) Read more at online.wsj.com ...
I guess we could say America has a proletarian dictatorship ... IF we actually HAD employment at proper levels! :)
I worked at the unemployment office from about 1983 to 2000. This is not a new phenomenon.
Of course, employers would rather bring in cheap illegals than respond to the demands of the marketplace.
Note what the recruiter said: commuting, taxes and other fixed costs are what determined the unemployed person's decision. Even if you cut-off the unemployment benefits, that still won't give someone the means to pay $4.50/gallon for gasoline, unless you expect an employee to subsidize the employer by working for a net of nothing or even a loss.
Sorry if I don'y shed a tear for the (often) politically connected businessmen seeking to drive wages down even more.
Bump
Very true, but the 99 weeks is.
Bingo!
Non-sequetur. The proper statement is relative to the opportunity cost of the next best alternative. With a 99 week cushion, the market rate may not be enough until that cushion is removed. This is just another case where the gov't screws up the market. In terms of economics, the gov'ts role is twofold: 1) the policing of property rights (i.e., a standing military and a legal system), and 2) provision of social overhead capital (i.e., public roadways, egtc.) Our gov't now lets agencies like the EPA set laws that destroy our competitive advantage. The gov't now competes with private business (e.g., SBA, student loans, etc.) which was not the Constitutional intent. Read Charles Beard's An economic Interpretation of the Constitution for more examples.
Anyway, her job got downsized away in 2007 and she went on unemployment... and gradually her attitude toward working changed. And yes, she was a Democrat (she said she wasn't but she took their side on every issue) but she had worked for 20 years and if nothing else, had a very good work ethic. When she first went on unemployment, she was mortified, ashamed, would actually cry over it.
Then the weeks went on and she got used to getting "her check." It became sort of like a dividend payment to her. She interviewed for jobs, but started turning them down for reasons that never would have bothered her before. Eventually it came down to "I'm not giving up my check to drive 20 miles each way!" Man, she milked it to the end, practically. She finally got a job when she absolutely had to, but she didn't stay at it long. She went from one to another.... she had developed a spirit of dissatisfaction that she just didn't have before.
If the value added by the employee isn't worth the cost of employing (salary. benefits, overhead), the job goes unfilled. That's economics 101, too.
99 weeks....
Seems the longest I can remember in past recessions was 39 weeks. Basically a 50-60% increase over the normal 22 to 26 week period that normally applied.
That’s a sad story of government coercing a good working person into one wishing for a life where her living expenses are paid by other people.
There was a two-week waiting period with benefits running for but 10 weeks and with a $5 minimum and a $10 maximum. Requirements called for a 2-year State residence and 40 weeks of employment to qualify.
Now, people are sitting on their butts for almost 99 weeks before they even start looking for work. Most states require that you show "some effort" that you are looking for work, but the fact remains that employers and tax payers are giving a lot of people almost a two year paid vacation.
We should adopt the German model of Workfare. If you are receiving either welfare or unemployment benefits and can fog a mirror, you show up every day to clean the toilets in public buildings, sweep the streets, etc. They make the jobs bad enough that people WANT to really find a job, which is often not the case here. Personally, I'd adopt this system and max the benefits out at 12 weeks.
I find that attitude shocking. UI benefits wouldn’t cover my mortgage an utilities (smart phone included) so I would be working (in my field or a related one). She must have been getting some pretty awful interviews.
No, no. We import illegal people for those jobs. /sarc
You forgot to mention the labor market.
We legally issue or renew 750,000 work visas each year, most of them to low skill or medium skill workers.
We also issue more than 1 million new Green Cards each year, most of them to the low skill relatives of other Green Card holders.
Finally, we make no attempt to enforce existing laws against the 11 million illegal workers who live here.
Bottom Line - government policy has deliberately created a massive oversupply of low skill workers and has deliberately crushed the prevailing wage scale.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.