Unemployment Benefits Causing Unemployment

[Gaspar]

I guess the old phrase "Subsidize it and it will get bigger, regulate it and it will get smaller" holds true.  It looks

"A March 2010 economic report by Michael Feroli of J.P. Morgan Chase examined several studies and concluded that "lengthened availability of jobless benefits has raised the unemployment rate by 1.5% points."

"A 2006 NBER study by Raj Chetty of UC Berkeley on a related subject begins, "It is well known that unemployment benefits raise unemployment durations."

http://online.wsj.com/article/SB10001424052748703720504575377381727739058.html?mod=WSJ_Opinion_LEADTop

[nathanm]

I see the myth of the voluntarily unemployed is still alive and well.

[Gaspar]

I see the myth of the voluntarily unemployed is still alive and well.

Quote from my neighbor (someone that both I an Conan know  ).  He's been unemployed for over a year and a half.  Goes hunting or fishing almost every day.

Me: "So xxxx, any good job prospects on the horizon?"

Him: "I haven't been looking yet, my benifits don't run out for another month."

Every time I talk to him it reminds me of cousin Eddie from Vacation. . ."He's holding out for management."  He's literally had people offer him jobs (myself included, against my better judgment), and turned them down.

[nathanm]

Every time I talk to him it reminds me of cousin Eddie from Vacation. . ."He's holding out for management."  He's literally had people offer him jobs (myself included, against my better judgment), and turned them down.

Wow, what a jackass. It's one thing to take a week and get yourself together and ready to interview, but another thing entirely to sit around for months on end. (not to mention to get unemployment, you're supposed to actually be looking for work!)

[Gaspar]

Wow, what a jackass. It's one thing to take a week and get yourself together and ready to interview, but another thing entirely to sit around for months on end. (not to mention to get unemployment, you're supposed to actually be looking for work!)

Duh!

A drafter I used to work with has been collecting for almost a year now.  He's been drawing renovations and plans for a local builder and doing quite well for himself.  He told me he's not interested in working for anyone ever again after getting laid off.

He has almost another year of receiving benefits before he will need to find something else to support his family, and actually claim income.  He told me he was offered a position last week by a local landscape architecture firm and turned it down.  His reason was also the fact that he's doing quite well on unemployment with his side work.

I relayed the available position to another drafter and  landscape architect intern who is employed, and he accepted it because it was more money than he is currently making ($47K + Benefits).

[Conan71]

Wow, what a jackass. It's one thing to take a week and get yourself together and ready to interview, but another thing entirely to sit around for months on end. (not to mention to get unemployment, you're supposed to actually be looking for work!)

I don't usually comment out of my arse on issues.  I learned a lot about the underbelly of life working as a collector for a loan company in the late 1980's.  I was amazed at the number of people who would milk every opportunity to not have to work.  I even see it with shop help at my company.  Some people figure it's easier to milk unemployment or workers comp than to put in a hard day's work.

[nathanm]

Duh!

A drafter I used to work with has been collecting for almost a year now.  He's been drawing renovations and plans for a local builder and doing quite well for himself.  He told me he's not interested in working for anyone ever again after getting laid off.

He has almost another year of receiving benefits before he will need to find something else to support his family, and actually claim income.  He told me he was offered a position last week by a local landscape architecture firm and turned it down.  His reason was also the fact that he's doing quite well on unemployment with his side work.

I relayed the available position to another drafter and  landscape architect intern who is employed, and he accepted it because it was more money than he is currently making ($47K + Benefits).

You should report them for unemployment fraud. Morons like that give the legitimately unemployed a bad name.

I can certainly understand the guy's lack of interest in working for someone else, but that doesn't give him an excuse to collect benefits to which he is not entitled. Isn't he eligible for partial unemployment anyway, presuming he's not making more from his side work than the benefit amount to which he's entitled?

[Gaspar]

That's the point.  We've made unemployment an attractive sabbatical from work for many.

It used to be that when you received unemployment there was a sense of urgency to find a job.  That no longer exists. 

A secondary problem caused by this is employer perception.  When I'm interviewing and I talk to a guy that's been unemployed for two years, and another who has just lost his job, I am more inclined to hire the guy who's skills are still current.  Two years is a long time to be out of the loop.

The current proposed addition to the extensions are nothing more than a stop gap to save votes.  At this point, the administration is subsidizing votes.

[Conan71]

That's the point.  We've made unemployment an attractive sabbatical from work for many.

It used to be that when you received unemployment there was a sense of urgency to find a job.  That no longer exists. 

A secondary problem caused by this is employer perception.  When I'm interviewing and I talk to a guy that's been unemployed for two years, and another who has just lost his job, I am more inclined to hire the guy who's skills are still current.  Two years is a long time to be out of the loop.

The current proposed addition to the extensions are nothing more than a stop gap to save votes.  At this point, the administration is subsidizing votes.

I think we touched on the issue on another thread, but longer periods of unemployment are going to be a red flag to a potential employer who has a good field of candidates to choose from.

[nathanm]

Given the level of new claims, I'm not prepared to concede that there aren't a lot of people out there who are looking but can't find work. Possibly because of the reluctance of employers to hire someone who is unemployed that you both mentioned.

I don't think that extending unemployment benefits is just an exercise in buying votes. It would be nice if the abusers got reported, though.

Edited to add: Let's also keep in mind that unemployment is only $9300 a year; it's not as if these people taking "sabbaticals" are living high on the hog. That wouldn't come close to even covering my mortgage, much less the other bills.

[Dana431]

That's the point.  We've made unemployment an attractive sabbatical from work for many.

It used to be that when you received unemployment there was a sense of urgency to find a job.  That no longer exists. 

+1

It pissed me off when a friend of mine, who had always been happily employed, decided to "ride out" the unemployment benefits when he got laid off.  He was going to "allow Obama take care of him."  This guy is a conservative too.

[Conan71]

Just FYI, here's a chart on maximum benefits by state as of Feb. '09

http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/how-much-jobless-pay-would-you-get.aspx

[nathanm]

The maximum benefit amount for claims effective January 1, 2010 and after is $9300.00

http://www.ok.gov/oesc_web/Services/Unemployment_Insurance/Claimant_FAQs.html

[Conan71]

http://www.ok.gov/oesc_web/Services/Unemployment_Insurance/Claimant_FAQs.html

Do you know if any of the maneuvering at the Federal level has changed this with the state?

[nathanm]

Do you know if any of the maneuvering at the Federal level has changed this with the state?

As far as I know, the requirements handed down from on high only related to paying benefits longer and providing the COBRA subsidy. I haven't read that they also required an increase in benefit amounts.

Normally, $9300 would be the maximum you can draw in a year, no matter how much you make.