Unemployment Benefits Extension: Encouraging Unemployed to Be Slackers?
The debate over whether an unemployment benefits extension discourages people from looking for work is causing a Senate bill to languish that would extend benefits to people who have been out of work the longest.
Many people think 99 weeks -- the current maximum to collect benefits -- is enough time to find a job and another unemployment benefits extension is a disincentive to finding work. Others say that in this recession -- the worst since the Great Depression of the 1930s -- it's so difficult to find a job that benefits should be extended to keep people on their feet.
It depends on whom you ask, with some economists saying an extension is a hindrance, and others saying that turning away a helping hand will only cause greater despair for the unemployed and lead to more societal problems.
With five unemployed workers for every job opening, it's unlikely that jobs are going unfilled because people are at home sitting on the couch collecting their unemployment checks, even with the disincentive to find work, said economist Jodi Beggs, in an e-mail interview with AOL Jobs. Beggs also pointed out that unemployment benefits improve the ability of people to find work. The money allows job seekers to pay not only their household costs, but also job-seeking expenses such as child care, transportation, clothing and other expenses.
Instead of having to accept a lesser-paying job out of necessity, unemployment benefits allow workers to be choosy, Beggs said: "Unemployment benefits in part give workers a bit of leverage with employers and some freedom to find a good job match rather than take the first thing that comes along. This dynamic is potentially in the best interest of the economy in the long run, but its easy to see it in the short run as employees being lazy or too picky."
-- Applying for jobs? Find out what they pay.
Two ways of looking at it
Finding a job, even if it's below what a worker made before, is better than relying on the federal government for money, said Charlotte Hays, a senior fellow at the Independent Women's Forum in Washington, D.C.
"We're paying people not to work, and people have to be more resilient than that," Hays told AOL Jobs in a telephone interview.
Hays should know. In 1993 she was laid off at a newspaper and found a job a month after her six months of unemployment benefits expired. It was a different time in the economy, she admits, but losing an unemployment check was the kick start she needed.
"While you have benefits, I was looking for the ideal job. I was looking for something super," she said. She took a job outside her area of comfort -- editing -- and was happy to be learning a new skill. She admits the economy is much worse now than when she was out of work, but says the 99ers are getting enough aid.
"You can't have the government paying people to be unemployed for two years. You just can't have that," she said.
But it's not like the jobless are getting rich while waiting at home for unemployment checks to arrive, said Jill Pugh, an employment law attorney in Seattle. The maximum benefit in Washington state is $631 per week, and the lowest is $225 per week.
"These people are not sitting around going, 'Hey, I can pay my mortgage. I can live this wonderful life,' based on what unemployment pays," Pugh told AOL Jobs in a phone interview.
Pugh, who represents the unemployed in administrative hearings to get their benefits, has been working with such people for 16 years, and most can't turn their lifestyles around in a week and downsize after losing their jobs. A cushion is needed, sometimes for two years or so, or the jobless could lose their homes, require other government assistance, or commit crimes to get money, she said. Those are greater burdens on society than helping someone stay afloat during the worst economy since the Depression, she said.
"These people are absolutely going out there and making active job searches," she said of her clients, many who make 10 to 14 job contacts each week, well beyond the three per week required by the state.
Another thing to consider
The money going to the jobless helps the economy. The U.S. Department of Labor estimates that for every dollar in unemployment compensation that is paid out, an average of $2.15 in gross domestic product is generated.
Leslie Jacobs, a 99er who lost her job two years ago and had her unemployment benefits end in June, told AOL Jobs that the benefits didn't dissuade her in her job hunt, but they did make her more picky than if she didn't have them. She started her own business and is thankful for the unemployment benefits because it gave her something to fall back on while starting the business.
But her life has changed. She doesn't have health insurance and owes a hospital $78 for treating a broken rib in November. She made $27,000 last year on unemployment, but has made lifestyle cutbacks. "I do not go out to dinner, I do not have the latest computer and have not had a vacation in two years," she said in an e-mail exchange. "I also now shop for food in a totally different way. I used to not use coupons or call about the prices" and she now only buys food on sale.
And her job search continues.
Related Stories from Forbes.com