Tuesday, April 13, 2010

Paying for Unemployment

They are arguing in the Senate right now about whether to extend unemployment benefits to 99 weeks. And the Democrats are playing the compassion card. According to the Wall Street Journal:

Iowa Senator Tom Harkin recently roared, "Is there any compassion at all left with Republicans for people whose checks are going to run out?" New York's Chuck Schumer calls Republicans "inhumane."

Just a minute, senators. The science is settled on this. Long-term unemployment is devastating to workers. The research shows that workers start losing job skills immediately they get laid off. It is essential for them to get back to work at something as soon as possible.

And as the Journal points out, people only start to look for work when their benefits expire.

Alan Krueger of the Treasury Department, who concluded in a 2008 study that "job search increases sharply in the weeks prior to benefit exhaustion." In other words, many unemployed workers don't start seriously looking for a job until they are about to lose their benefits.

For male workers in their 40s, a spell of unemployment very often means that they never work again. That's what the research shows. I'm not quite sure how this happens, but it does. Perhaps these men live off women, who are more inclined to work--at all ages. Or perhaps they develop bad backs and go on disability.

It may be good politics to shower your supporters with government benefits. But it is "inhumane," Sen. Schumer. People need to work. Men need to work, or they go bad really quickly. So your little plan of extending unemployment benefits to two years means that hundreds of thousands--maybe millions--of laid-off workers will lose job skills and never work again.

Yes, but what do we do? Suppose there aren't any jobs? We've got to help people!

Certainly. But this is the time to think about all the things that the government does to make it hard to find a job. It starts with the government's penchant for gunning the economy with low interest rates and Fannie and Freddie. It continues with minimum wages and licensing and credentialism and job-killing taxes.

Maybe if you geniuses could stop screwing up the economy for a moment we wouldn't need all these government benefits.

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