There’s been a lot of talk about how unemployment spoils folks and encourages them not to look for employment.
That’s a pile of bull poop.
NY Times Op-Ed columnist Paul Krugman gets it:
Now, I don’t have the impression that unemployed Americans are spoiled; desperate seems more like it. One doubts, however, that any amount of evidence could change Ms. Angle’s view of the world — and there are, unfortunately, a lot of people in our political class just like her.
But there are also, one hopes, at least a few political players who are honestly misinformed about what unemployment benefits do — who believe, for example, that Senator Jon Kyl, Republican of Arizona, was making sense when he declared that extending benefits would make unemployment worse, because “continuing to pay people unemployment compensation is a disincentive for them to seek new work.” So let’s talk about why that belief is dead wrong.
Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.
But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
But won’t extending unemployment benefits worsen the budget deficit? Yes, slightly — but as I and others have been arguing at length, penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.
It really bugs me when people say that those currently receiving unemployment benefits are abusing the system. Perhaps that is true when the economy is flourishing and jobs are abundant. But right now, today?
People receiving unemployment benefits are trying to survive.
Someone else who gets it is Eugene Robinson, op-ed columnist for WaPo:
The good news is that unemployment has fallen to “only” 9.5 percent. The bad news is that the jobless rate is down only because so many people have given up hope of finding work. Perversely, the jobless who aren’t actively looking for jobs are not counted as “unemployed.” Perhaps there should be a new category: “mired in existential despair.” If anyone in Washington wants to know why people in the hinterlands are angry, one simple answer is that our political leaders seem to be so calculating and unmoved about the parlous state of the economy.
…
The employment numbers aren’t just a monthly set of partisan talking points. They represent actual lives. They represent mortgages that might not be paid and college educations that have to be deferred; they tally mental health crises and broken marriages. Those sterile, emotionless figures speak of pain and anxiety. They mock our faith in the American dream.
Let me put it in terms that Washington understands: The party that begins to treat the unemployment crisis with the hair-on-fire urgency that it deserves is the party that will do well in November.
…
Republicans block an extension of unemployment benefits, rail about the deficit and complain that Democrats don’t understand that economic renewal will come when the private sector is unleashed. The problem is that since Republicans are in the minority, they have to work with the Democrats to get anything done. I suspect that their strategy — standing on the sidelines and yelling, “The Democrats are doing it all wrong!” — will not win as much favor from voters as the GOP hopes.
Democrats, on the other hand, do have the power to enact an agenda. But individual members of Congress act as if they are more concerned about their own electoral prospects than about bringing those unemployment numbers down. If a second economic stimulus is the answer, then that’s what Democrats should do. If the answer is something else, fine. But they should know that whether they call themselves progressives or Blue Dogs or whatever, voters see them as one party and will hold them accountable.
