Today an article from the Wall Street Journal confirms she’s right.
Management Recruiters of Sacramento, Calif., says it recently had a tough time filling six engineering positions at an Oregon manufacturer paying $60,000 a year—and suspects long-term jobless benefits were part of the hitch.
"We called several engineers that were unemployed," says Karl Dinse, a managing partner at the recruiting firm. "They said, nah, you know, if it were paying $80,000 I'd think about it." Some candidates suggested he call them back when their benefits were scheduled to run out, he says.
Rick Jewell has a different take on extended jobless benefits: He didn't want to be on the dole, but had no alternative. He has been out of work since he lost his $12-an-hour job driving a forklift for a cosmetics company in Greenwood, Ind., in December 2008. He collected $315 a week in benefits until early June—when Congress declined to renew the law that gave workers in Indiana and some other states up to 99 weeks of assistance.
Let’s do some math here. The guy was making $12 an hour. Assuming a 40 hour work week, that’s $480 a week. He now receives $315 in unemployment benefits. 480-315 = $165. So if Mr. Jewell went back to work at the same rate it would be for $4.13 an hour. If he found a job paying $7.50 an hour he'd actually lose $15 a week. No wonder he remains unemployed. Not even Mexicans would work for those wages.
In the long recession and the lackluster recovery, the government expanded unemployment payments more than at any time since the benefits were rolled out in the 1930s. And workers have gone jobless for longer than any time since official tallies began in 1967.
I’m sure those two facts are completely unrelated.
The debate remains pressing as Congress wrestles with whether to extend the expired benefit program. The House passed an extension renewal backed by President Barack Obama as part of a broader bill that died in the Senate, after skirmishes about the wisdom of enlarging the deficit. The House passed a scaled-down version last week, but the Senate won't revisit this issue until after its week-long recess.
Economists have argued for years about the extent to which government benefits prolong unemployment—and possibly augment the overall jobless rate. Most believe that expanding benefits does discourage some unemployed people from looking for work or taking available jobs. But they disagree on how acute that effect is, particularly at a time when jobs are scarce.
The recent recession was unusual in almost every respect. Compared to other post-World War II recessions, it was deeper, longer and put more people out of work. A year after the economy began growing, unemployment is still a very high 9.5%. Nearly half the jobless—6.8 million total—have been out of work for more than six months, and 4.3 million of those have been without work for more than a year. The typical unemployed person has been out of the job market for a median of 25.5 weeks.
The government response was also unusual, and not just in the big bank bailout. In normal times, the unemployed are offered up to 26 weeks of benefits, largely financed by a tax on employers. In recessions, state and federal governments often jointly finance up to an additional 20 weeks in hard-hit states. In this recession, Congress added up to another 53 weeks of federally funded benefits; in the deep crisis of the 1980s, the maximum total never exceeded 55 weeks.
The article goes on to describe studies showing that subsidizing doing nothing gets your more of doing nothing, proving a basic rule of economics (the classic case being when the federal government started subsidizing bastard children and the out-of-wedlock birth rate shot up).
This simple argument needs to be made no matter how much feminized liberals screech about how insensitive it is.