TIMOTHY NOAH FEBRUARY 1, 2012
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House and Senate negotiators have been meeting to work out an agreement on extending the payroll tax cut, which currently is due to expire at the end of February, through 2012. After last month's partisan battle over the issue, which proved costly to Republicans, everyone now is apparently on board with the extension. But disagreement remains on how to pay for it, with Republicans continuing to insist on "reforming" unemployment insurance by shortening its duration by 40 weeks and requiring recipients either to possess a high school degree or to be enrolled in a GED program and "making satisfactory progress in classes." (See my earlier blog post, "I'm Sorry, You're Too Stupid To Collect Unemployment" and Jon Cohn's followup,"Republicans v. the Unemployed, Cont'd.")
Today Heidi Shierholz of the Economic Policy Institute, a liberal nonprofit, weighs in with the news that right now would be a uniquely terrible time to cut unemployment benefits. That's because the share of the unemployed who have been out of work for more than six months is 42.5 percent. That's 25 percentage points higher than it was before the 2007-2009 recession, and about what it's been for the past two years. Some Republicans will contend that this is an argument not against unemployment reform, but for it, on the grounds that extending unemployment benefits creates a disincentive to work. But as the White House Council of Economic Advisers pointed out in December, economic studies have shown that this disincentive is quite small--even smaller during economic downturns--and more than outweighed by the elimination of "liquidity constraints" that can prevent recipients from finding the right job. Perhaps more to the point, we're talking about a benefit that typically amounts only to about $300 per week, which is $85 per week above the poverty line for a single-person household and $143 per week below the poverty line for a family of four. So unemployment insurance's effect on both work disincentive and liquidity constraints is nothing to write home about.
12 comments
Oh well, no unemployment benefits, no rent check for the landlord. Trickle up economics!
- Sophia
February 1, 2012 at 4:54pm
That you're writing about this as "unemployment reform" is yet another sad example of the success of the Republican propaganda machine. What you're talking about is gutting unemployment. As you are not a mindless conservative dittohead, refer to it as such, please.
- janus
February 1, 2012 at 4:55pm
It is absurd for republicans to focus on making people get a diploma/GED; they were earning a living that entitles them to UI without a diploma, the same as people with diplomas. There's nothing to say that completing a diploma at tthat point improves their chance of finding new employment. It will do more to prevent people from affording the basic necessities, by either having them pay for it out of pocket or reducing their UI amount accordingly, than it will to help find people new jobs. The smarter move is something like Vo-Tech training, based on regional needs; at least give them the opportunity to pick up a new skill or trade that makes them employable again.
- GSpinks
February 1, 2012 at 5:00pm
If Republicans are serious about eliminating disincentives to work, they should outlaw marriage. When you can't rely on a spouse to bring home the bacon, you're far more willing to climb on the job creators' treadmills.
- Fishpeddler
February 1, 2012 at 5:16pm
If someone gets about $15,000.00 a year, it is a discentive to work. But if their income after taxes is $21 million, well, they need tax cuts to motivate them. And don't forget, billionaires as a breed get very lazy if their kids have to pay estate taxes, but they'll work hard if the kids get it all. Why are we paying legislators anything if payment for nothing is a discentive to work?
- Nusholtz
February 1, 2012 at 5:47pm
Ah, but Fishy, if you've GOT a wife, and multiple kids because of no birth-control/abortion, THEN all you can do is work multiple jobs at sub-par wages to keep them fed and housed. See, Republicans are all about keeping Labor hungry, cheap, and fully motivated to stay employed. The worse they can make the conditions for the lower 1/3 of Americans, the happier they are. "Safety nets just make people lazy".
- AllanL5
February 1, 2012 at 6:05pm
Come on, execute the unemployed, think of the savings people. Although I tend to think Republicans would be opposed to this because it would lover the unemployment rate, so they will probably pay for it by executing the unemployed only after the election. And afterwards we can sell soylent green to the Cantonese (and Republicans like Romney) and use the proceeds to pay for upper class tax cuts. Don't forget, it was upper class tax cuts that killed bad Muslims like Osama Bin Laden.
- blackton
February 1, 2012 at 6:05pm
Also, this way you really encourage the folks who are CALLED to unemployment, I guess: http://nymag.com/daily/intel/2012/02/alabama-politician-only-wants-poor-teachers.html
- mldarby
February 1, 2012 at 7:18pm
Hilarious, Fish.
- liberalref
February 2, 2012 at 12:40am
People need to work for material and immaterial reasons. Material: put food on the table. Immaterial: provide purpose in a random, accidental, and purposeless universe. If you (whomever you are) don't provide reasonable work (whatever reasonable is), we will put people to work in class war and religious war. That's worked for humans throughout our miserable (how can we stand ourselves) existence; why should we change a good thing now?
- skahn
February 2, 2012 at 1:53pm
Come on, blackie. They only want to execute those who can no longer be useful as servants and slaves: the sick and elderly. That way the "real" unemployment rate won't actually fall, the pool of available, able-bodied slaves will stay fairly deep, and they can have weekly colliseum challenges to have the poor schleps fight over who gets to work for their food and clothing that week, and who gets to stay cold and hungry. They can offer consolation prizes to the losers, like cheap wool blankets infested with diseases and table scraps that the dogs refuse to eat; think of the money they'll save if instead of creating new landfills for all their waste, they repurpose things like table scraps and newspapers. The cardboard boxes that their new 100" plasma tv's come in can be reused as housing, and old news papers can be repurposed as bedding. Just think, the homeless could have a fresh and clean blanket every night!
- GSpinks
February 2, 2012 at 2:54pm
There are substantial lines of converging evidence that things are getting better in the world. I urge everyone to read The Better Angels Of Our Nature: Why Violence Has Declined, a 696- page book by the noted Harvard professor, Steven Pinker. I took out this tome in a few days, finishing it just over a week ago. Pinker's research comports with my reading for the last half a decade or so. We should be able to stand ourselves a lot better now than, say, a millenium ago.
- liberalref
February 2, 2012 at 2:58pm