Senate jobs bill: the perils of extended unemployment benefits (Morphing into Entitlement)

Christian Science Monitor ^ | 03/11/2010 | Editorial Board

[SeekAndFind]

The Senate jobs bill, approved by a vote of 62 to 36, has touched off a couple of red-hot debates.

One is how to pay for its extension of unemployment benefits for qualified jobless who have been out of work for more than six months.

The other, more thought-provoking one, is whether jobless benefits, because of multiple extensions approved by Congress, have morphed into an entitlement.

The Depression-era program was originally intended as a temporary bridge to help the jobless until a recovery put them back to work – though nearly two-thirds of unemployed workers do not qualify. During a more normal downturn in the economy, states help people who have been laid off with jobless benefits lasting 26 weeks. But now, in some of the hardest-hit states, the long-term unemployed have been able to collect benefits for as long as 99 weeks – almost two years.

Some would argue that the long-term availability of unemployment insurance has turned it into something like welfare in the days before reform: open to abuse and not helpful in encouraging people to actually look for work. “Continuing to pay people unemployment compensation is a disincentive for them to seek new work,” said Republican Sen. John Kyl, of Arizona.

Others point to studies that show generous and longer-lasting jobless benefits lead to a longer duration of joblessness.

But states are hardly handing out checks that put the jobless on easy street. The average unemployment payment in the last quarter ($311 a week) amounts to about a third of the average weekly wage of American workers. Many of the studies that talk about the downside of generous jobless benefits examine other countries, such as Austria and Canada, with far greater largess.

[fatnotlazy]

Those benefits have morphed into an entitlement. This country is going to hell in a handbasket. We have to stop this madness.

[cotton]

I think I must live in the wrong area. The average income here is about $21,500 per year. That is no where near $3000.00 per month. People with Master's degree requiring positions and 20 years of experience are lucky to get $40000.00 per year.
$1500 a month for doing nothing does not sound like a bad deal. Folks, with 2 kids, on welfare here get about $450 a month plus other benefits like food stamps, so this sounds like “heaven” to them. I know expenses in some areas are very high, but is $3000.00 a month really the national average, mean, median???

[cotton]

Actually $311 per week is more like $4000.00 per month!

[cotton]

$4000 is 3 times $311 per week.

[C210N]

Show me a solid fixed ending to unemployment payments, and I’ll show you the end of a recession and beginning of economic recovery.

[SeekAndFind]

Actually $311 per week is more like $4000.00 per month!

$311/week X 4 Weeks/Month = $1244 per month.

$311/week X 52 weeks/year = $16,172/year

[Uncle Miltie]

Funny, I remember this same course of events in EVERY SINGLE RECESSION OF MY LIFE.

Extend the unemployment benefits, people stay on them. Cap the unemployment benefits and voila! People go get work.

“You mean there’s infinite demand for free money?” -
Congress

They have to re-learn every time.

[Ev Reeman]

This is the exact problem with government. When they see a problem, their only answer is to throw more money at it. Nevermind that that idea has never worked in the past and will never work. Government is most effective when it steps aside and gets out of the way of business, enterprise and entreprenurship. That is why socialism and communism never works. That is why Communist China is succeeding because they are adopting free market principles and capitalism even if their government is still repressive and tyrannical.

[Buckeye McFrog]

I had a friend who was living in Massachusetts and lost her job. She openly admitted to me that she chose to remain in the Bay State and exhaust her unemployment, rather than move and look for another job, because the benes were so generous. Eventually when she moved back to PA she got another job fairly quickly.

[ransomnote]

I think that the govt. is extending to keep the masses quiet while they ruin the economy. The economy is really alot worse than the govt. admits and if jobless benefits were not extended as they are, and if our generation did not have 401K’s to deplete in this recession, it really would look like the ‘Great Depression’. According to the bank handling my 401K, the existence of 401k’s is the only difference between the present and the 1930s - we really would be seeing bread lines/riots etc. and mass displacement of jobless persons if it weren’t for the fact that many people today are currently depleting their retirement benefits.

[SJSAMPLE]

Or, as they say;
“You always get more of what you subsidize.”

[flamberge]

Extended unemployment benefits are not enough to live on. We are talking about people getting 1/3 to 1/4 of what they used to make when working full-time.

Extending the time period for such benefits does not increase joblessness. Ending such benefits does not somehow cause people to be employed.

Taking a part-time temporary job that pays minimum wage (and no benefits) does not make “an end to the recession”.

The formerly middle-class people reduced to such measures will eventually end up homeless - and may tend to congregate in angry mobs around the homes of the wealthy politicians who discarded them.

Extending the benefit period buys a little time for everyone before nihilistic violence becomes an attractive alternative.

The long-term solution involves removing barriers to formation of small businesses and the consequent increase in job opportunities that pay a living wage.