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January 17, 2014

Report: Unemployment Benefits Accomplish Nothing More Than Get Votes For Democrats

Topics: Political News and commentaries
According a report by the well respected National Bureau of Economic Research, the only people actually benefiting from unemployment insurance are Democrats who collect the votes:
[...] "Most of the persistent increase in unemployment during the Great Recession can be accounted for by the unprecedented extensions of unemployment benefit eligibility." The NBER calculates that these extensions have kept unemployment 3.6 percentage points higher than it would have been without the extensions. According to the study, "During the Great Recession, unemployment benefits have been on average at 82.5 weeks for approximately 16 quarters. ... Translating this to rates, we would predict a rise in unemployment from 5% to 8.6%. As the NBER further explains, extended benefits have two main effects on unemployment. First, the unemployed do turn down jobs they might otherwise take either because the wages aren't high enough or because they don't want to lose benefits. Second, because some number of the unemployed chose benefits over work, overall wages rise, suppressing employers' demand for labor -- when labor is more expensive, employers buy less of it. Of course, Democrats benefit most from this cycle because they're portrayed by the Leftmedia as the party that "cares" while evil Republicans only want to "slash benefits." Furthermore, most of the unemployed will never realize the macroeconomic reasons for their plight, leaving the Democrats' BIG Lie as the most plausible explanation. ...
This isn't to say that there aren't people who genuinely benefit from the unemployment benefits for some period of time, but according to the report, over the long run extending jobless benefits encourages more unemployment for those who are able and capable of working but choose to simply live off the government. As The Washington Examiner points out, unemployment is lower now than it was in 2009, but only because labor-force participation has declined 3.4 percent over the past 10 years. A few new jobs have been created as the economy stabilized, but the ratio of the employed to the working-age population remains where it was when the job market bottomed out in 2010. Blottom line, the very best unemployment benefit is a job.

Posted by Hyscience at January 17, 2014 4:50 PM

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