Posted on 04/18/2010 7:55:20 PM PDT by 2ndDivisionVet
Do unemployment benefits cause unemployment? Do long term benefits prolong the length of unemployment? If you ask President Obama's Chief Economic Adviser Larry Summers the answer would be yes. He outlined his case in a paper currently on line at the Library of Economics and Liberty. To be fair he has stated he no longer holds these opinions. Seems he has changed his mind since getting his current job in the Obama admistration. Before joining the administration Summers was the Charles W. Elliot University Professor at Harvard University. He was previously the president of Harvard University. Prior to that he was Secretary of the U.S. Treasury. Still he makes some interesting points. Here are some quotes from the article:
..."unemployment insurance extends the time a person stays off the job."
..."another cause of long term unemployment is unionization. High union wages that exceed the competitive market are likely to cause job losses in the unionized sector of the economy."
..."There is no question that some long term unemployment is caused by government intervention and unions that interfere with the supply of labor."
..."by providing an incentive, and the means, not to work. Each unemployed person has a "reservation wage"- the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing the unemployed person to remain unemployed longer."
Here are some important points Summers makes in the paper:
unemployment insurance extends the time a person stays off work.
unemployment benefits are expensive for taxpayers According to Summers taxpayers as a group are paying $8.25 per hour in unemployment benefits to the unemployed.
Unemployment rates are higher in states with high unionization. The rate is on higher 1.2 percentage points higher than states with low unionization rates.
Congress will decide this week whether to extend benefits. For some these benefits have already extended 99 weeks. These benefits no doubt are providing a safety net to those in some cases desperately looking for work. There are some other things to consider:
How will we pay for these extended benefits? We are already running record deficits that will cause long term economic problems. It is time to start making some tough choices to cut spending.
The longer you are out of a job the tougher it is to find a job. Employers start to believe your skills have eroded. Keeping people on benefits for extended periods of time may make them forever dependent on government assistance.
Long term benefits change behavior. Will we ever go back to the old program of 24 weeks of benefits? We need Americans to set aside money in an emergency fund for an event like unemployment. Workers need to be prepared to help themselves through job loss.
Perhaps in exchange for extended benefits we require those getting benefits to provide community service or other volunteer work. We would get something of value for their benefits and they could be doing work that will keep their skills active. That may be a win win for both sides.
The current issue is not adequate skills, but government so regulatory that it kills business confidence. There can be no "Recovery" until Obozo is out of office. Impossible for it to happen under these circumstances.
We are facing the consequences of the "elitists" in the Dem Party and some "elitists" in the Republican ranks who have sold us out to the forces of Corporate Globalism. They are Traitors. All who voted or will vote for Cap & Trade are Traitors or simply too stupid to hold public office. They must ALL be removed, NO EXCEPTIONS! Yes, you too Lindsey Graham.
Unemployment, unemployment. What a happy day!
Paid vacations, Greyhound stations full of people on their way.
Headin' south to Ol' Miami and that old sun deck.
Thank you boss for pork and beans and unemployment checks.
- Burl Ives, "Unemployment check"
I agree with you 100%, especially the TREASON part - Correcto Mundo!
The only time I ever collected unemployment was for a week one time about twentyfive years ago. Too much hassle, IMO. I decided to take a temp job that paid less than the unemployment and that required me to make a 40 mile (each way) commute through city traffic. I never had any regrets on that decision to take the temp job.
If you and I knew what has been promised to cretin like Lindsey Graham for supporting this sell-out we would already be on our way to DC to evict them from their office. When this all comes out, there WILL be Criminal Charges.
Treason! is a very serious matter.
I agree with you 100%
the catch here is, in your words, “ ... when this all comes out ... ‘, and the ‘when’ may indeed be Judgement Day!
The “Big Lie” of Global Warming is exposed for what it is. There is no repackaging that will put it back.
Now for those who still insist on trying to dance around the evidence and sell this snake oil, they only expose their reasons for prostituting themselves. That should bring out the question, WHY? It is obvious that they have been promised something VERY BIG to get this done.
Do you remember the last time the High Pressure Salesman tried to sell you something you knew you did not want? That is where we are Gentlemen.
I agree, that’s why I said I’m of two minds. I was a veterans career counselor from 1988 to 2000 at a state unemployment office, so I’m very familiar with the subject. This is the worst economy I’ve seen in my 50 years and will soon approach what my late father told me about the Great Depression if it continues on.
I disagree. The solution is to cut the benefits off altogether, not to push indentured slavery.
I was working on my own as a consultant for a few years and that is a constant search for the next job. Nobody pays you until you're already doing the work. There were lean times when I was not finding much but no checks from the government when you're on you own. When my wife had some medical problems I had to go back to a salaried position as I couldn't afford the medical insurance any more.
I guess I'm lucky but mostly I'm ready for whatever comes. If I'm not working, I'm still working my ass off for the next job.
What part of "Moral Hazard" do they not understand?
My guess is the two major causes of continued unemployment in the face of economic recovery are (1) uncertainty about the effect of a commie congress and an anti-American president on the economic future and (2) Summers's point: why take a less-than-perfect employment opportunity when you can relax on welfare for 99 weeks?
Barring a serious turnaround next November, we are all stranded in Europe, volcano or not.
I would say no in this instance. I would say that democraps and the Obama adminstration prolong unemployment.
You know, I think if it were not for food stamps, we would be seeing the traveling hungry as in the Great Depression.
This is one time that I am glad there is a safety net for people in that regard. In our area, the entire industry fell out (moved out of the country) after 150 years. The whole local economy relied on the employment that is no longer there. It’s just downright frightening.
I’m of two minds as well. I would say that it depends on how comfortable one can be on unemployment.
I have two anecdotes - one was a guy I knew several years ago. Lived in Ohio. He was a union bricklayer. He would work just long enough to gain his unemployment benefit, and then stop working and collect state unemployment for as long as he could. When it was ready to run out, he’d go back to work. During the course of his unemployment “vacation”, he’d pick up the occasional side job, working for cash instead. In other words, he milked the system. And, I bet he voted for Obambi.
I have another friend that is in the building trades in Ohio. He’s been laid off for a few months now. His unemployment runs out in May, but he’s going to get an extension at that point. He says that as long as he can get unemployment ($400 per week), he can continue to pay his bills for 2 years, with the help of his savings. However, he says that he really doesn’t want to do this too much longer, and would rather be at work. He can’t stand Obama, and knows that if someone like Reagan were in office, we’d already be seeing some real recovery.
Different states also have different benefit payout amounts also, ranging from $628-942 per week in Taxachusetts at the high end to $230 per week in Mississippi.
I would venture to say that folks in Massachusetts are more inclined to stay unemployed than folks in Mississippi.
Probably yes.
Unfortunately high taxes and “hidden” taxes do too.
I’ve been unemployed and underemployed for 13 going on 14 months...
Since February 2009, I’ve kept the radar up and running to find work, but no one is hiring in my field enough to make an impact...
I eventually took a job at a storage facility making less than I would if I stayed on unemployment, which by the way was going to run out entirely by July of this year I was told by the Texas Workforce Commission...
But since that short two weeks of working at that job I got sick (as some may know) and have not been able to be cleared to go back to that job by my doctors...So as of late last week I was told to sign a letter of resignation, and that when I do get cleared in the next couple of months by my doctors, they might hire me back, if they have a position open...
I cannot go back on unemployment, as you have to be able to work to receive those funds...
Social Security only covers long term disabilities, to the death, and I have not received a call back from the Texas HHS folks...
So where does that leave us???
Some might say screwed, but I say relieved...Something will come up eventually, but I am not pinning my hopes on anytime soon...
We’ll just have to manage...
Some family members have told me that I shouldn’t feel guilty about being on the unemployment rolls, because I paid into that...But when you have to pay taxes on even that money, to me, it just doesn’t feel like it’s due to me for some reason...So that is why I am relieved to be off the rolls...
And for anyone in the government to be relieved that I am in this condition, so that the unemployment numbers start looking better for them...Screw them!!! Everytime I see those numbers on any news outlet it is an absolute lie, obviously...
I have no incentive to go back to school, I have no reason to startup my own business, or change anything about the way I do things in my life, why should I, I did absolutely nothing to earn this condition other than be a business decision, based upon the environment created by our government which has screwed the pooch on everything it touches...
I’m glad to be off the government teet now...Especially now with what is running the show now...
/Monday Morning Rant
it’s not indentured slavery if your receiving payment for your services rendered. But yes, cutting it off completely would be the better option. And technically all of us are slaves to our jobs, if you think about it.
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