Government itself contributes to long term unemployment by providing the means not to work.
Every person has a reservation wage – a minimum wage they insist on getting before accepting a position.
Unemployment benefits and other social assistance programs only increase the afore-mentioned reservation wage, allowing that person to remain unemployed for a longer period of time.
The U.S. Senate is debating whether to extend unemployment benefits for the fourth time since the recession began in early 2008.
The bill which is being pushed by the Democrats would allow benefits to continue for 99 weeks, that is nearly 2 years, at a cost of $7 – $10 billion dollars.
The Brookings Institution’s panel on economic activity reported in March that jobless insurance extensions “correspond to between 0.7 and 1.8 percentage points of the 5.5 percentage point increase in the unemployment rate for the current recession.”
Alan Krueger, a Treasury Department economist came to the conclusion in a study in 2008 that “job searches increase quite sharply in the weeks just prior to benefit exhaustion.”
It would appear that many unemployed workers don’t start seriously begin job hunting activities until they are about to run out of benefits.
The share of unemployed workers, who don’t have a job for more than 26 weeks, has increased steadily, reaching a record high of 44.1% in March.
Democrats seem to be ever so slowly converting the unemployment insurance program, into a welfare program hoping, I suppose, that no one will notice what is actually taking place.
I suppose in their warped way of thinking, they are creating one more hand out program so more people will get the idea that if they vote Democrat, there will always be more government largess available.
No one with half a brain should be surprised that when you subsidize people for not working, more people will choose not to work. Why should they?
Iowa Senator Tom Harkin recently yelled, “Is there compassion at all left with Republicans for people whose checks are going to run out?”
Charles Schumer (arguably the most conceited man in the senate) calls Republicans “inhumane.”
I wonder how politically smart is it for Democrats to wrap their arms around policies that keep the jobless rate higher than it needs to be?
Do the Democrats really think they can defend an unemployment rate that is at present 9.7% in the fall election campaign?
The Republicans are opposing these new extended benefits only because the Democrats refuse to pay for them and instead want to add to the deficit instead of living up to their fiscal promise of PAY AS YOU GO. These jobless benefits are now nearing $90 Billion dollars.
