Blog Post by: Doug Stone
- November 21, 2011 - 9:22 PM
A column in the StarTribune’s Monday Business Forum (Nov. 21) inexplicably lays the blame for being out of work on the millions of America’s jobless, not on our poor economy. And the author, Terry Larkin, says that extending unemployment benefits to the jobless is a disincentive for them to find work. “I see Americans’ desire to work being slowly euthanized with larger and longer unemployment benefits,” he writes.
This is the same argument we hear from a number of conservative politicians including Arizona Republican Sen. John Kyl who has argued against extending benefits because he claims it inhibits jobless people from looking for jobs. This is the same John Kyl who makes $175,000 a year as a senator and enjoys premier health insurance coverage, something unemployed people don’t have.
On a policy level Larkin and Kyl are wrong. A recent study by University of California economist Jesse Rothstein actually found unemployment insurance benefits increased the share of people who found work because it motivated them not to stop looking for work and stay in the labor force. He writes:
“Any negative effects of the recent unemployment insurance extensions on job search are clearly quite small, too small to outweigh the beneﬁts of transfers to people who have been out of work for over a year in conditions where job-ﬁnding prospects are bleak.”
Even conservative economist Ken Rogoff of Harvard told NPR last year that “today, we're in a once-every-50-years, once-every-75-years recession. There just aren't a lot of jobs. And it's hard to believe that that's really what's holding people back from getting them, that they can collect a modest unemployment check.”
There are five unemployed people for every one job in this economy. It’s easy for Larkin and others to wax nostalgic about how their parents worked their way through the Great Depression and how if some of the unemployed would be willing to take roofing jobs or work in restaurants or work in the demanding health care field, they wouldn’t need unemployment insurance. But the fact is that 14 million people are out of work and the unemployment rate is hovering around 9 percent not because of individual laziness or character flaws but because we have a poor economy and there simply aren’t enough jobs.
Anyone who has been on unemployment insurance (as I have during my career) can tell you, the few hundred dollars a week barely pay the grocery bill. The check does not cover the mortgage, gas money or even school fees for your kids. And it certainly is not enough to say, “I think I’ll stop the job search now and live off this fat government check.” That’s preposterous. The argument also shows an incredible lack of understanding of what it’s like to be out of work and how important that check is for an unemployed person trying to survive while looking for work.
The Obama administration has proposed extending unemployment insurance once again as part of the Jobs Bill at a cost of $44 billion, a figure many economists see a stimulus since the money is plowed back into the economy. The proposal also calls providing more flexibility to the states and work training programs for the jobless.
So far Congress has not approved the extension. At stake is a lifeline for some six million unemployed workers, our fellow citizens, who find themselves trying to stay afloat while searching for work in the toughest economy in 60 years. They face losing their meager unemployment check next year unless Congress acts. As the richest country in the world, don’t we have some moral obligation to help them?