The end of unemployment benefits
As promised, I am going to try to start putting most of my political and social thoughts on a blog and allow people to come here from the various social networks optionally.
Forgive me in advance for not citing all of my sources or having my facts 100% correct. I will try to find resources as I can, but sometimes writing at 11pm makes one a bit lazy on the research front. Just know I do listen to various liberal and conservative media shows on my way to and from school, so hopefully I have retained some of what I have learned.
Now for the actual subject matter: I wanted to share some brief thoughts on the end of unemployment benefits for those called “99 weekers.” These are people reaching the limit of the very extended benefits Congress has provided to allow more time for people to find jobs in this tough economy. An initial extension was probably a good idea. I don’t know what the ideal amount of time is to extend these benefits considering the slow recovery of unemployment the last couple of years. However, I really do feel that at 99 weeks, we have reached an upper limit to these benefits.
Unemployment as it is set up by most states is a program that is supposed to be an insurance of sorts. Employers and employees pay into the system, and in certain circumstances people are allowed to collect benefits for up to 26 weeks until either they find another job or are rehired by their previous employer. States are actually supposed to stop paying benefits when the money runs out, which in this economy has happened almost everywhere. The federal government has provided some funds for these extensions, but the money is coming from the states’ general funds as well. This of course requires more deficit spending. Unemployment benefits are also based on your income before your separation (with some cap). This means if you make more money, your unemployment benefits are greater. This makes sense because you paid more in and your lifestyle is based on your income, there has to be some sort of scale.
The issue with extended benefits is you are encouraging people to turn down lower paying jobs. Several news organizations have provided anecdotal stories of people not looking for work outside their area or even turning down jobs because the money is better on unemployment. This seems like a bad way to run this system. This is also exacerbated by the fact that higher paying jobs are a much greater number of people on extended benefits. Some states are paying people as much as $900/week for unemployment benefits. I’ve been working for 18+ years and have never made that kind of money.
The real issue here is when do unemployment benefits become welfare payments. If someone is laid off for an extended period of time, they need to start making lifestyle changes. Maybe it is time to sell your house, downgrade your vehicle, or even consider more drastic measures like bankruptcy. These are difficult decisions, and I wouldn’t take them lightly. Yet, how long can you expect the government to support your lifestyle? I am not saying we should help these people, but we also need them to understand their lifestyle needs to change. We don’t want your or your kids to starve or be homeless, and I don’t think we will. But maybe it is time to sell your house, rent a small apartment. We can provide you with basic welfare assistance – but we can no longer afford to maintain status quo.
In the late 1970’s and early 1980’s, there was an extended slow down on the Iron Range of northern Minnesota. Many of my friends will probably remember or at least have heard about it. It was a tough time for all – some people lost their homes, home values fell, and people were in need. Yet, the Iron Range survived. President Reagan didn’t swoop in with extra benefits. Yet, Iron Rangers survived.
The same thing very well could happen in various pockets of the country if we start transitioning from lifestyle maintaining unemployment benefits to life sustaining welfare benefits. What I would hope would happen is it would help flush out some more of the troubled mortgages. Prices would fall. Felling prices in housing can provide benefits too. Housing becomes more affordable. Property taxes go down for families. Because those in homes are less likely to sell, they start treating their home more like a home and less like an investment. These can be long-term good outcomes for communities.
There are some that say that there are no jobs. I know things are slow. But even in the worst month of the last few years where there was approximately 900,000 jobs lost – that number is a net number. Roughly 4.8 million lost their jobs, but another 3.9 million were hired. It may take longer to find a job when there is a net loss, but it shouldn’t be impossible either.
It is time we start calling these extended benefits what they are – welfare. We need to encourage people to work. Is it fair for someone to make $15+/hour to sit at home on the government tab while someone goes to work everyday for a minimum wage @ $7.25/hour? I don’t want people to be on the street or starving, but we cannot afford to maintain everyone’s lifestyle forever. I think the right decision has been made, and will benefit the communities as a whole in the long term.