Stimulus is the only way to create jobs
Five myths about the unemployed
By Rick McGahey and Teresa Ghilarducci, WashPost, Friday, December 7, 9:36 AM
Rick McGahey and Teresa Ghilarducci are professors of economics at the Schwartz Center for Economic Policy Analysis at the New School in New York.
New numbers on Friday showed an estimated 146,000 jobs were added to the economy in November. But the unemployment rate remains stuck above 7.5 percent. Should Congress renew the emergency unemployment benefits program that is set to expire at the end of the year? Listening to the debate could result in more confusion than clarity, so let’s take a look at the misconceptions that often arise when the unemployed take center stage in Washington.
1. People who receive unemployment benefits are slow to search for work.
This oft-repeated statement might have a chance of being true if benefits were unduly generous. They aren’t. Weekly unemployment insurance payment averaged $300 in 2010 and 2011, federal statistics show.
It’s important to understand that unemployment benefits aren’t intended to replace a worker’s income. They provide support so financial hardship doesn’t interfere with a newly unemployed worker’s job search. Think of these payments not as handouts but as investments; warding off long-term unemployment saves money in the long run, or so the theory goes.
There’s evidence to back up the theory. According to a 2011 report by Congress’s Joint Economic Committee, people who receive unemployment benefits search harder and smarter for jobs than people who aren’t covered. They tend to make better job matches — that is, they find long-term positions that suit them and may pay more. With a better job match, people stay in their jobs longer, reducing turnover costs, layoffs and firings.
(More here.)
Rick McGahey and Teresa Ghilarducci are professors of economics at the Schwartz Center for Economic Policy Analysis at the New School in New York.
New numbers on Friday showed an estimated 146,000 jobs were added to the economy in November. But the unemployment rate remains stuck above 7.5 percent. Should Congress renew the emergency unemployment benefits program that is set to expire at the end of the year? Listening to the debate could result in more confusion than clarity, so let’s take a look at the misconceptions that often arise when the unemployed take center stage in Washington.
1. People who receive unemployment benefits are slow to search for work.
This oft-repeated statement might have a chance of being true if benefits were unduly generous. They aren’t. Weekly unemployment insurance payment averaged $300 in 2010 and 2011, federal statistics show.
It’s important to understand that unemployment benefits aren’t intended to replace a worker’s income. They provide support so financial hardship doesn’t interfere with a newly unemployed worker’s job search. Think of these payments not as handouts but as investments; warding off long-term unemployment saves money in the long run, or so the theory goes.
There’s evidence to back up the theory. According to a 2011 report by Congress’s Joint Economic Committee, people who receive unemployment benefits search harder and smarter for jobs than people who aren’t covered. They tend to make better job matches — that is, they find long-term positions that suit them and may pay more. With a better job match, people stay in their jobs longer, reducing turnover costs, layoffs and firings.
(More here.)
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1 Comments:
Every dollar of Stimulus' has to either be borrowed or come out of the private sector. Both constrict jobs. Are their unicorns and rainbows at the Schwartz Center?
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