Stop punishing the jobless
There was a time when everyone took it for granted that unemployment insurance, which normally terminates after 26 weeks, would be extended in times of persistent joblessness. Itwas, most people agreed, the decent thing to do.
But that was then. Today, American workers face the worst job market since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks. Yet the Senate went home for the holidayweekendwithout extending benefits. How was that possible?
The answer is that we’re facing a coalition of the heartless, the clueless and the confused. Nothing can be done about the first group, and probably not much about the second. But maybe it’s possible to clear up some of the confusion.
By the heartless, I mean Republicans who havemade the cynical calculation that blocking anything President Barack Obama tries to do — including, or perhaps especially, anything thatmight alleviate the nation’s economic pain — improves their chances in themidtermelections. Don’t pretend to be shocked: You know they’re out there, and make up a large share of the GOP caucus.
By the clueless I mean people like Sharron Angle, the Republican candidate for senator fromNevada, who has repeatedly insisted that the unemployed deliberately choose to stay jobless, so that they can keep collecting benefits. Asample remark: “You canmakemoremoney on unemployment than you can going down and getting one of those jobs that is an honest job, but it doesn’t pay asmuch. We’ve put in so much entitlement into our government thatwe really have spoiled our citizenry.”
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 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 playerswho are honestlymisinformed about what unemployment benefits do— who believe, for example, that Sen. JonKyl, R-Ariz., was making sense when he declared that extending benefits would make unemployment worse, because “continuing to pay people unemployment compensation is a disincentive for themto seek newwork.” So let’s talk aboutwhy that belief is dead wrong.
Do unemployment benefits reduce the incentive to seekwork? Yes: Workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightlymore choosy about accepting newjobs. The operative word here is “slightly.” Recent economic research suggests that the effect of unemployment benefits on worker behavior ismuch 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 sufficientwillingworkers 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 forwork— but they can’t take jobs that aren’t there.
Wait: There’s more. One main reason there aren’t enough jobs right nowisweak consumer demand. Helping the unemployed, by putting money in the pockets of peoplewho 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.
Butwon’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-runbudget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.
So, is there any chance these argumentswill get through? Not, I fear, to Republicans: “It is difficult to get aman to understand something,” said Upton Sinclair, “when his salary” — or, in this case, his hope of retaking Congress — “depends upon his not understanding it.” But there are also centristDemocratswho have bought into the arguments against helping the unemployed. It’s up to themto step back, realize that they have been misled— and do the right thing by passing extended benefits.
Flora Guan, left, and Jessica Yang, recent graduates of San Francisco State University, filled out forms at a career fair in San Francisco on June 28.