Wednesday, December 8, 2010

Should we extend unemployment benefits again?

Lining up to build Fords
It's a political issue, as everything else in Washington is. Democrats are for it, Republicans against it. The federal extension kicks in when state unemployment checks stop.

It's a philosophical issue, because nobody is sure what an extension will do for the economy. Greg Mankiw, an economics professor at Harvard, writes that, "I have yet to see a compelling quantitative analysis of the pros and cons that informs me about how generous the optimal system would be."

Conservative commentators say unemployment benefits discourage the unemployed from taking jobs that are available, and by that they mean a well-paid white collar worker should get himself hired at Starbucks. I've no doubt that a check from the government keeps some people from taking minimum-wage jobs. I've also no doubt that the commentators have never themselves been unemployed.

Here's the question I have for them. How can you square that belief with the fact that for every job opening there are five unemployed people? So four of the five are worthless bums living on the state?

And how do you reconcile that belief with stories of thousands of people lined up for the few jobs opening up? This summer, thousands of people lined up for the chance to build Explorer SUVs for Ford in Chicago. 

Same thing happened in Sacramento, where 1,500 people -- some arriving as early as 4 a.m. -- lined up to apply for 100 temporary jobs paying $15.82 to $17.13 an hour at Campbell Soup's cannery.

It's tough out there.

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