Monday, April 26, 2010
How long should we help the jobless?
This article discusses whether or not unemployment benefits should last longer than 99 weeks. The current period of 99 weeks is already the longest in history. But some unemployed workers are begging for more, saying they cannot find work in this economy. Unemployment checks have helped to keep food on the table and prevented more mortgages from defaulting. The checks also stimulate the economy because the unemployed tend to spend every penny they are given. However, it is a huge strain on the government to be sending millions of checks out each month. And some believe it lowers the incentives for the unemployed to find work. Lately, there have been promising signs in the employment market, like an increase in the amount of temporary workers. It seems as if most economists believe we should wait and see if this upswing will be permanent before we make any adjustments to the unemployment benefit period. This just reminded me about how difficult it is to remove government intervention once it has started. Although we studied it in relation to economies transitioning from socialism to capitalism, it can definitely happen in a market economy as well.
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5 comments:
I agree. Once people become dependant on the government, its hard for them to become self sufficient. This is a huge strain on the government when it already has a tight budget to help people out. Also, as Elizabeth said that if people are receiving unemployment benefits, they may not be very keen on finding a job. The government should help the unemployes population till the point where they have a place to stat and food to eat.
I have heard people talking as if they would get more money from getting unemployment benefits than getting a standard job, which is the only thing many can get lately. I do believe that unemployment benefits reduce incentives to find work, but it is hard to get people to work for less than they are used to. It seems like even people with a lot of experience who used to make a lot of money are having to settle for making less, which is a hard concept for some to grasp. I think that if the government is paying people to be unemployed, they should be more strict and find do something to help people find work.
In labor economics we learned that the longer people receive unemployment benefits the longer they will take to look for work. In the case of the economy right now, i believe people need the extra money because it is so hard to find work, and extending unemployment insurance will help struggling families. But if they do extend it I have to agree that it will take people longer to try harder to find work, since they have the cushion of unemployment insurance.
I feel like extending the length of unemployment benefits is absolutely necessary today. Sure it may be costly, but with a 9.7% unemployment rate, for most people it probably isn't that they aren't searching for a job, but rather that there is just so many people looking for one so that there are more people looking than jobs being created. When it comes down to that, it's not the people's fault and they deserve a chance to at least be able to pay their bills and eat. We are in too critical of a time to short change the unemployed, and sure it may be costly to pay for these extra benefits, but what's more important, getting help to those who desparately need it or saving the government some money.
I think everyone has made great points about the delicate balance between funding the unemployed in America with motivating them to find long-term jobs. No one can be certain about how long it will take until companies start hiring more individuals but we can only be patient. What people don't realize is that getting these people jobs as fast as possible will only save the government money when they start paying taxes but the real question is "How long is too long?"
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