Posted on 03/09/2010 10:22:37 PM PST by 2ndDivisionVet
Temporary safety net or permanent entitlement program? That’s the question some conservative voices are asking as Congress eyes yet another filing extension for federal unemployment benefits. The Washington Post reports:
[C]omplaints that extending unemployment payments discourages job-seeking have begun to bubble into the political debate. [...]
[Arizona GOP Sen. Jon] Kyl told the Senate he questioned why anyone would see unemployment benefits as helpful to the economy, or to the job market. ”If anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work,” Kyl said. “I am sure most of them would like work and probably have tried to seek it, but you can’t argue it is a job enhancer.”
Conservative employment experts are now weighing in with a similar message. James Sherk, a labor economist at the Heritage Foundation, for example, told the Post that the extension of emergency benefits — which now run for 99 weeks in high-unemployment states — have turned a safety net program into something more like welfare.
“It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is,” Sherk said. “But by quadrupling it, it is no longer an unemployment insurance program but a welfare program.”
Two thoughts:
1) The critics aren’t wrong to question the very human motivational effects that indefinite federal payments could have on some workers. (No doubt there are folks out there only too happy to be paid for doing nothing — and would continue to do so as long as they could.) Yet there’s also a general agreement among economists of all stripes that the current jobs crisis has endured because businesses simply aren’t hiring — not because of some pandemic of laziness among workers receiving emergency help. Indeed, the average UI check is just 36 percent of a worker’s previous salary, according to the National Employment Law Project — hardly enough for many recipients to pay mortgages, make car payments, keep the kids in Nikes, and generally sustain the type of consumptive lifestyle that the nation’s economy hinges on. To say that folks would be satisfied enough with such a pay cut to retire on UI checks is to wholly misunderstand the motivations that make our very system of capitalism click.
As Peter Morici, economist at the University of Maryland, wrote last week: “When dollars leave the United States to purchase imports and do not return to purchase exports, Americans cannot sell all they make — be it manufacturers, software makers, movie producers, or clean shirts from the corner laundry.” It’s these trade imbalances, Morici argues, that are exacerbating the jobs crisis, which has left 16.8 percent of workers either without a job or underemployed. Not that Congress shouldn’t be addressing such deeper structural problems in the economy, of course. But meantime, critics of a UI extension should be called out when they try to shift the blame to the unemployed simply because American companies have found higher profit margins in outsourcing. (Kyl, for one, seems to recognize some of this. Despite his reservations with the UI extension, the Arizona Republican eventually voted last week in favor of a short-term filing extension.)
2) Kyl’s claim that UI benefits aren’t a job enhancer flies in the face of economic experts who point out that those payments provide more bang for the buck than nearly all other forms of economic stimulus. Analysts at Moody’s Economy.com, for example, estimate that every $1 that Washington spends on UI benefits returns $1.61 to the larger economy — a far cry from the 21 cents per $1 returned by the corporate tax break (popular among conservatives like Kyl) that Congress enacted in the name of stimulus last fall.
“Without this extra help,” the Moody’s analysts wrote of UI benefits, “laid-off workers and their families would be slashing their own spending, leading to the loss of even more jobs.”
hell I should go for unemployment in a few years. At the rate its going it’ll start paying more than I actually made for years.
99 weeks worth of entitlement......
And when politicians like the Clintons supposedly “cut the welfare rolls”, they didn’t really - they just re-named programs and recipients.
Unemployment insurance is paid for by taxes on employers, not workers.
I’m getting sick and tired of hearing unemployment benefits being extended. It’s obvious that we are sinking further into to debt to pay for these entitlements, for which we will have to pay interest. That means that in the future, we will have either a tax increase, a significant reduction in government spending, or both. All the idiots that keep voting for this know this, but chose to ignore it. We are so focused on healthcare, but we are ignoring the rest of the crap Washington is shoving down our throats. Absolutely sickening.
I think this ‘safety net’ curbs creativity and effort.
I think it gives cover to the terrible job our fearless leaders are doing.
Without this ‘safety net’ people might actually get angry with gov’t and demand gov’t get out of the way of job creators and perhaps create work themselves.
Remove this fig leaf ‘safety net’ from the law makers deck and watch them get honest with the problems of our country.
It’s more of a safety net for THEM!
Yep, our government is hooking them alright. Wonder what the penalty will be.
I couldn’t believe my ears when I heard unemployment benefits can last over 90 weeks! How many of these people are really looking for work in every possible way? How many of these people could at least be mowing lawns or flipping burgers?
I know someone whose wife got laid off and he nonchalantlyt old me that she was going to take a 6 month vacation if she qualified for unemployment. I almost wanted to say that he wasn’t welcome to my house anymore I was so disgusted.
Mark Levin said on his show that 60% of this country receives more benefits than they pay for, how is that sustainable? Politicians are bankrupting this country to buy votes, and then they wonder why there is little incentive for entrepreneurs to create jobs.
A country crumbles when half its citizens feel like they don’t have to work and can be subsidized by the upper half and then the upper half feels that there is no point of working because their earnings are taken away. It is a viscous cycle that will be very hard to reverse because of special interests and politicians needs to be reelected.
One day the tables will turn though, instead of the Jim Bunnings being demonized we will be calling for the head of the people that mortgaged our children’s future.
Don’t know about other states but anyone who thinks the benefit in Texas, for anyone with any skills at all, is likely to lead to dependency is crazy. It couldn’t even feed a family let alone help with housing costs etc.
Been there, thank heaven I had some savings.
It's surprising how many people don't believe that....I'd even bet it's the majority.
Nam Vet
Heh. Social workers, public school teachers, regulatory employees,...
The sooner the default, the better.
That is true however depending on the state you are from you also pay as a worker. Alaska for example.
If your family’s food is covered by food stamps, you get a check for each kid, your housing is Section 8, and the gov’t is providing you a free cell phone and subsidies on the already-subsidizes trains and buses, what costs do you really have?
Add to it that their useless 36% “average” unemployment check comes from the fact that if you made 100k your unemployment is a small fraction of that, but if you your income is low you get almost the whole thing (think it’s 80% or more here), it’s enough for plenty of people to keep living comfy, hood-rich lifestyles funded by our paychecks.
Well... if bank bailous are entitlements...
I worked as a veterans career counselor/rep. at a state unemployment office from 1988 to 2000. Although I never worked on unemployment insurance, 12 years someplace you learn things from osmosis.
One day the tables will turn though, instead of the Jim Bunnings being demonized we will be calling for the head of the people that mortgaged our children’s future.
_______________________________________________________
I think that day had arrived.
Complaints that extending unemployment payments discourages job-seeking
Geeeee, ya think?
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