August 29, 2014

Republicans hate the unemployeed?

The Washington Monthly is running an article by Steve Benen titled, “Republicans just don’t like the unemployed.” Feel free to read the post, but the title really says it all. Democrats like Steve (generally) think that extending unemployment benefits will help ‘fix’ the jobs problem here in the United States. They suggest that if you oppose extending jobless benefits you are somehow mean or heartless. I think Democrats like Steve are missing the point, on purpose.

Republicans (generally) believe that by extending unemployment benefits you will reduce the incentive to find employment. Democrats argue there aren’t enough jobs as they cite their favorite (un-sourced) statistic: “Nationwide, there are five applicants for every one opening”. The truth is probably at lot more complex and perhaps distasteful. Over the past two years we have seen a severe contraction in the job market, but prevailing wages (i.e. the amount someone is willing to pay someone else for a given job) have declined.

Republicans assume someone earning $50,000 who loses his job is likely to hold out for a $50,000 position while utilizing his unemployment benefits. If his jobless benefits expire before he finds a position he may be forced to accept a lower paying job – say $35,000. Ironically, the job seeker will still make more than he made on unemployment and he is gaining valuable job experience and will likely be able to move back up the wage ladder as the economy grows and recovers. Extending jobless benefits may allow the job seeker to avoid accepting a lower paying job keeping him out of the employment market longer potentially making him less and less attractive to potential employers. It is hard for most workers to accept that they aren’t worth the $50,000 they made last year to accept that $35,000 position – but it is most likely the best economic decision they could make.

The new issue for many facing long term unemployment is that they created lifestyles they can no longer afford. Imagine earning $120,000 per year and spending every penny on your house and other non-discretionary expenses. Your biggest fixed cost is your house and you can’t sell it. What do you do if you lose your job? The bad news is that unemployment benefits don’t even come close to solving your problem – the real answer is for you to change your lifestyle. Giving you another six months of benefits won’t do you a bit of good.

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Comments

  1. Newt G says:

    Senators, if you have to turn down the extension then please do not appropriate funds for the other countries when they come to the door knocking. If the money isn’t here for the people of this country who ultimately pay the bills, then the money should not be there for anyone else outside the borders. Take care of those here before there!

  2. Jeff says:

    Hey Muse, since your Tea Party and Republican pig buddies started this whole business on kicking the unemployed of all political stripes while they’re down, why don’t you, Rush Limbaugh, Mark Levin, Sean Hannity, and Mitch McConnell have a circle jerk while Sarah Palin and Michele Bachmann watch and take pictures with their cell phones. Stand up for the jobless or this country will have revolution, you bastard!

    Signed – common sense breathes in Tampa, Florida

  3. boethius says:

    Jeff in the midst of your thoughtful, constructive reply, I missed a solution. What’s the answer then? Endless unemployment benefits? How do we fund that? I’ve been out of work 6 and 8 months at a time in ’02-’03 and ’09-’10. I’m not saying I wasn’t glad to have UI benefits but the first time around they did in fact run out. Somehow me and the family survived.

    And how do people survive without a government welfare state? How does the 95+% of the world who effectively has no support from the government survive? I understand the implications to the soul and spirit and psyche that grinding poverty has, but historically most Americans helped their neighbors when they were down. Mine have and I’ve helped my neighbors. Pretty much the same thing happens now, largely without the nanny state “helping” us out.

    Given that most conservatives envision limited government and liberals envision endless government entitlement programs as the hallmarks of a progressively Utopian/Communist social master plan it isn’t likely there will ever be any fundamental agreement on the topic of government welfare, among many others.

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