I was working in my yard this past Saturday when I overheard my one Republican neighbor talking on his cellphone. (Aside: I really need to get some batteries for my headphones.) The conversation turned to Congress’ failure to extend unemployment benefits prior to the July 4 break, about which my neighbor said, “It’s a good thing it failed, too. Maybe now those people will get out and try to find jobs instead of running up our deficit some more.”
Now, for just a moment, let’s ignore the flaws in whining about the deficit, which we have covered ad nauseum of late. Even then, this remains one of the more ridiculous things I’ve heard in a very long time. He seems to be implying that unemployment is high because people are sitting around all fat and happy on their unemployment benefits and are refusing to look for work. Nevermind the fact that there are almost no jobs available because no one is hiring because the economy is crap; this guy and others of his ilk still expect the unemployed to go out and find something that simply does not exist.
The lack of critical thinking evident in this statement is mind-blowing, really.
UPDATE: I see that Krugman tackled this same idea on Monday.
Today, American workers face the worst job market since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks. Yet the Senate went home for the holiday weekend without extending benefits. How was that possible?
The answer is that we’re facing a coalition of the heartless, the clueless and the confused. Nothing can be done about the first group, and probably not much about the second. But maybe it’s possible to clear up some of the confusion.
But there are also, one hopes, at least a few political players who are honestly misinformed about what unemployment benefits do — who believe, for example, that Senator Jon Kyl, Republican of Arizona, was making sense when he declared that extending benefits would make unemployment worse, because “continuing to pay people unemployment compensation is a disincentive for them to seek new work.” So let’s talk about why that belief is dead wrong.
Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.
But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.