November 15, 2010

Unemployment Benefits and Change

Justin Katz

Being unemployed for long periods is a terrible experience for those who lack the resources to survive an extended financial drain. Especially when a family is on the line, the hopelessness and fear of joblessness is one of modern life's greatest anxieties.

Still, at a certain point, unemployment benefits begin to become a weapon of dependency for government agents:

Thousands of out-of-work Rhode Islanders will start running out of unemployment benefits on Nov. 30 unless Congress acts to renew certain federal benefit programs.

About 30,000 unemployed people are collecting jobless benefits in Rhode Island, where the unemployment rate is 11.5 percent, fifth-highest in the nation.

If certain federal benefit programs expire as scheduled late this month, about 17,000 unemployed Rhode Islanders would run out of benefits sooner than they otherwise would, state figures show.

Short-term help is, I'd argue, a just and reasonable responsibility of state government, and during times of economic stress, the federal government should shift funds from other expenditures to help the states in their efforts. But when nearly two years of government subsidies come to be seen as a humanitarian necessity, the calculation begins to change.

After all, those who are kept afloat by such funds are less likely to make changes that might improve their circumstances while contributing to the economy. That's true on a personal level, with the decreased the likelihood that workforces will move from place to place or industry to industry as the economy requires, or reconfigure their living circumstances toward more sustainable expectations and better fortified family supports. It's also true on a political level, with the ire of unemployed voters focused on maintaining and extending their temporary benefits rather than pressuring politicians to cease their games and get out of the economy's way.

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The smart solution would be a one-time upfront cash payment in lieu of an extension. The cost would be the same, but the incentives to get back into the job market would be better, the unemployed would be better off, the impact to the economy would be faster and stronger, and since it isn't an ongoing service, it would be harder for people to argue for an extension in the future.

Posted by: Mario at November 15, 2010 2:24 PM

2 years? Isn't that about enough time to learn a whole new trade? Or work your way up to a regional manager position at McDonald's? Or take advantage of some of the vocational training the state offers? I would have thought that someone could find a job in their field somewhere in 2 years. If the options are to completely run out of money and be homeless and can't afford food, or find a job in Kansas, I would think a reasonable person would hitch up the UHaul and get to work.

Mario, if they enact your plan, the only winner will be Foxwoods and Mohegan Sun. Plus, it's never harder for people to argue for an extension, they keep doing it.

Posted by: Patrick at November 15, 2010 2:43 PM

The crazy thing is that many of those who are collecting are spouses of gainfully employed people, who have no problem surviving on one paycheck.
These government programs aren't made to keep people in a comfortable lifestyle they've become accustomed to - they are supposed to be a "safety net".
Once again, you have the unintended consequences of our good intentions with this gross abuse by so many of those collecting.
They get $550 a week to do nothing.(actually, many work under the table) When they are offered a job paying $40k a year, here's how they look at it: "Hmmmm, I get $550 for doing nothing, and if I take the job I get $800 a week for working 40 hours....that's and extra $250 to work 40 hours....NAHHHH!!. I'll keep collecting."
And that folks, is exactly what you should expect when the stupid government runs things.
Gut these programs!!

Posted by: Mike Cappelli at November 15, 2010 5:10 PM

The good news is that come January there will be no more "unemployment checks forever", no more stimulus, no more bailouts for the unions.
The legacy of 4 years of a Democrat Congress is that blacks, illegal aliens, government workers, cronies and other parasites have feasted while decent people have gotten raped.
On November 2 Obama, Reid, Pelosi and their co-conspirators got teabagged by middle America...
couldn't happen to a nicer crew.

Posted by: Tommy Cranston at November 15, 2010 7:04 PM

Have to disagree with you here, Justin. Welfare for the unemployed at taxpayer expense is not a legitimate function of government. Once you accept the idea that government can be in the business of redistributing income or wealth, you slide down the slippery slope of the Left.

Social "safety net" programs such as unemployment payments and Social Security have contributed to the borrow-and-spend mindset of the modern, consumption-focused society and to the destruction of the virtues of thrift and long-term planning by individuals. Why should someone manage his money or his career when the government will take care of everything? Might as well spend it all now. So now we have a society of borrowers and consumers, spending the legacy bequeathed them by generations of producers and savers.

Posted by: BobN at November 15, 2010 7:42 PM

I'd submit that it's more politically feasible to create a reasonable unemployment system than to maintain purity. I've watched too many contractors be reined in from arbitrary and exploitative behavior by the risk of seeing their unemployment insurance rates go up. Disallow the very principle, and you'll hand welfare-statists a huge cudgel with which to pound their political opposition.

Posted by: Justin Katz at November 15, 2010 8:18 PM

Do they owe us a living? Of course they do! (and the Founders knew it)

"Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right." --Thomas Jefferson to
James Madison, 1785.

Posted by: Russ at November 16, 2010 9:17 AM

Okay Russ-when are you going to start sharing more?
With people like you it's always "let's you and him pay more taxes".

Posted by: joe bernstein at November 16, 2010 9:27 AM

Once again, Russ misquotes Jefferson by taking a snippet out of context. Also, upholding a single Jefferson quote as the basis for the Founders' vision is dishonestly simplistic.

Jefferson, for all his genius, was one of the more undisciplined and inconsistent thinkers among the Founders. This is not necessarily a bad thing - creativity requires exploring a wide range of ideas that seem crazy at first glance. He believed that American society should remain forever an agrarian one, with many small farmers across the continent. Of course, that vision was not the path to creating a great society with a middle class whose wealth and living standards eclipsed those everywhere else in the world.

I find it odd that the Leftists here do only two things: make snarky, sarcastic comments like teenagers in the back row in high school; and dishonestly use false quotes such as the one above in a lame attempt to use our Constitutional authorities against us. They never affirmatively say what ideas they support or recommend. I guess they are afraid to stick their necks out and take a position.

Justin, while you may be right as a matter of political strategy in the near-term, I'd say that people have become addicted to government "aid" and eventually, if we want a healthy society, we will have to enter rehab. The moral rot caused by dependence on government is no different from the physical rot caused by heroin or crack.

Posted by: BobN at November 16, 2010 9:36 AM
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