Saturday, May 12, 2012

Liberals on the Effects of Unemployment Insurance

"government assistance programs contribute to long-term unemployment by providing an incentive, and the means, not to work. Each unemployed person has a ‘reservation wage’—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase [the] reservation wage, causing an unemployed person to remain unemployed longer." Lawrence Summers, 1995............."Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker’s incentive to quickly find a new job." Paul Krugman, 2005.............“more generous unemployment insurance benefits have been found to be associated with longer spells of unemployment.......the job finding rate jumps up around the time benefits are exhausted. Most importantly, we find that job search intensity is inversely related to unemployment insurance benefit generosity for those who are eligible for it.".............Alan Krueger (President Obama's Assistant Secretary of the Treasury), 2002.

49 comments:

Will "take no prisoners" Hart said...

That, before it was a partisan political issue, these guys were singing a different tune of sorts.

Marcus said...
This comment has been removed by the author.
Will "take no prisoners" Hart said...

One thing that they could say, though, is that during such periods of high unemployment, the calculations do change somewhat. That in essence could be their "out".

Jerry Critter said...

Are you implying that we should not have unemployment insurance? Are you saying the bad outweighs the good?

Les Carpenter said...

From my perspective unemployment insurance is a good thing as it provides monetary resources for individuals and families while the unemployed worker is seeking employment.

The issue really is, at least in my view just how long unemployment should be extended and what the level of benefits should be. Under Obama these dynamics have changed somewhat. It is my personal belief, and I'm only speaking about what I view as occurring over the past three + years is that the nation is being guided into a greater dependency on Leviathan government.

I hope I'm wrong...

Jerry Critter said...

The problem is what do you do when unemployment insurance runs out, particularly when the economy is poor and jobs are at a premium. That question is never answered by those that want to end unemployment benefits after a set period of time. Letting people starve and/or lose their homes is not the answer.

Will "take no prisoners" Hart said...

I think that we should provide unemployment insurance but put in certain safeguards to make sure that people are actually looking for work and totally do away with this nonsense of letting people turn down work because it doesn't pay 100% of what they were making before.

Jerry Critter said...

When I was on unemployment many eons ago I had to supply a list of companies that I contacted for work every couple of weeks. Also the ability to turn down offers has several conditions on it, often if not always the salary requirement is less than 100%, and varies from state to state.

Rusty Shackelford said...

Unemployment payments are just one issue.Do you realize there are 10 million americans collecting disability benefits? Along with the monthly check they qualify for Medicare.Four years ago there were about 5 million on the disability rolls.

Eric Noren said...

The best policy keeps unemployment benefits in place, but for a short period of time. 26 weeks has been the standard for years, and it provides a reasonable safety net AND an incentive for recipients to find a job quickly.

As soon as benefits were extended to 99 weeks, recipients lost their incentive to find work. Their mental calculation of how much they want in a job offer goes up knowing they have up to 2 years of benefits coming.

Jerry Critter said...

I have no problem with 26 weeks of unemployment in normal economic times, but during a recession I think we need a longer period of time.

Eric Noren said...

But Jerry, the point is that extending unemployment benefits increases unemployment for a longer period of time. That results in a longer recession or a slower recovery. Why would you want any of those things?

Your compassion is overriding the economic reality. It's taking short-term results at the expense of the long-term good.

Jerry Critter said...

Using your argument, then in poor economic times we should shorten the time of unemployment insurance.

Eric Noren said...

That isn't my argument and you're obviously just playing dumb. I argued for the "normal" benefits, which have worked for many years.

I argued against increasing those benefits. That isn't the same as arguing for decreasing benefits. But you know that already.

The economics are simple to understand if you could get over your ideology and protecting the record of your dear leader. Will has shown that even liberals understood this when they didn't have to defend their political decisions.

Will "take no prisoners" Hart said...

Jerry, I've known scores of people on UI who simply sit on their arses and don't even look for a job until their benefits get close to running out. I mean, yes, they're supposed to make X number of contact per week but nobody ever really checks on it. Look, I actually was IN favor of extending the benefits (for the reasons that you cited) but there has to at some point be a stricter oversight.

Will "take no prisoners" Hart said...

And while I normally don't quote Newt Gingrich, the fellow did in fact make one good point. "99 weeks - that's an associate's degree."

Les Carpenter said...

Interesting comment thread. Almost as though there is agreement on principle. As they say, "the devil lies in the details."

Will "take no prisoners" Hart said...

I sense a fair amount of common ground, too, Les.

Jerry Critter said...

HR,
Myncomment didn't address your argument at all.

Dervish Sanders said...

I don't agree. And what happened to the comment by Marcus? He also did not agree. He said that in his experience people didn't "sit on their arse". It seems to have been erased without a trace.

Les Carpenter said...

wd - note that comment was removed by author. Must have changed his mind eh?

Will "take no prisoners" Hart said...

You don't agre with what, wd? Please be specific man.

Dervish Sanders said...

"The Senator from Arizona [Jon Kyl] argues that unemployment insurance is a disincentive to jobs. Nothing could be further from the truth. I don't know anybody who's out of work and is receiving some unemployment insurance believes that that payment is sufficient not to find a job. The payments are so much lower than any salary or wage would be, it's just ridiculous. I might add, there are five unemployed Americans today for every job opening in the economy... People are looking for work. They're not unemployed because of choice" -- Max Baucus, one of the Blue Dog Democrats Will SAYS he agrees with.

Also two of the three "Liberals" you quoted aren't Liberals.

Will "take no prisoners" Hart said...

I don't know how precise any of these labels are, wd, but I think that most people (sane, independent people, I'm saying) would probably think that Mr.s Summers and Krueger are at least a smidge or two to the left of center and that Mr. Krugman was just flat-out off the charts. I take it that you don't agree with Mr. Krugman on this one, wd.

dmarks said...

As measured from the political center, every single one of the liberals mentioned is indeed a liberal.

Will "take no prisoners" Hart said...

On a left-right continuum scale of -20 to +20, I would probably put Summers and Krueger at about a -2 - -3 and Krugman at about a -18. wd would probably be a -19.5.

Dervish Sanders said...

dmarks: As measured from the political center, every single one of the liberals mentioned is indeed a liberal.

You aren't measuring from the center. Summers and Kruege are Conservadems. Using the word "Liberal" to describe either of them is factually incorrect.

What dmarks is doing is a Conservative tactic, the purpose of which is to fool people into believing the center is further to the right than it actually is. Then anyone who really is a progressive seems more "extreme", and Progressive ideas to solve our problems are less likely to be considered.

Will: most people (sane, independent people, I'm saying)...

What you're saying is wrong. Most people aren't Independents. Also, not all Independents are conservative-leaning like you. Some Independents are actually Independent because they consider themselves further Left than the Democratic Party (so they would also qualify as "not sane" according to how Will sees things).

Also, wouldn't -20 be a Communist? I'm not a Communist, nor do I fall just short of being a Communist.

Will "take no prisoners" Hart said...

I didn't mean to say that most people are independents. What I was saying was that if you asked most sane, independent people (as opposed to asking insane, off the charts ideologues like you) what they thought of those 2 fellows, they'd probably put them a bit to the left.......Operationally, you're not all that far from a Communist; nationalize the banks, nationalize health insurance, nationalize all off-shore oil wells, break up Walmart (a company this is clearly NOT a monopoly), have people retire at age 55 with larger benefits, make it literally impossible for a person to make more per year than you, wd, deem appropriate, drastically reduce trade with other nations, a pure naivate regarding the government bureaucracy, having the unions take over as many businesses and industries as possible, etc., etc.. But, yeah, you're probably right, -18 would probably be a more appropriate score for you.

Jerry Critter said...

Wow! I'd sure like to see quotes where w-d advocated all,of those positions. I think there is a bit of exaggeration in your description of w-d thoughts. But then, it does stimulate discussion.

Dervish Sanders said...

1. nationalize the banks: what we should have done instead of bail them out. I'm not saying banks should be run by the government.

2. nationalize health insurance: Nope. I just think people should be able to buy into Medicare. If people are happy with the insurance they have I'm for them being able to keep it.

3. nationalize all off-shore oil wells: I don't think there should be any drilling in deep water, period. It's to dangerous. As for oil located on land owned by we the people... I think a national oil company would be something to consider. At least the amount we charge oil companies to drill our oil should be radically increased.

4. break up Walmart: Walmart is clearly a monopoly and breaking it up should be looked at.

5. have people retire at age 55 with larger benefits: This is a solution to the jobs problem. There aren't enough jobs, so if people choose to, they can retire early. Also, the COLA needs to be adjusted upward.

6. make it literally impossible for a person to make more per year than you, wd, deem appropriate: No, not me personally. Also, not "literally". But yes, I think ridiculous salaries (billions) is too much. It's detrimental to our economy for some people to be "making" so much.

7. drastically reduce trade with other nations: No, I think tariffs should be slowly raised, the trade agreements we are a part of should be re-evaluated (and we should probably withdraw), new agreements should be fair and balanced (and not free), and we should also probably get out of the WTO. People could still engage in trade. I wouldn't "outlaw" it.

8. a pure naivate regarding the government bureaucracy: No, I'm opposed to people being naive about government bureaucracy.

9. having the unions take over as many businesses and industries as possible: Union representation isn't a "takeover". But, if people want to form a union it should be easy for them to do so. Also, I'm for more employee-run companies (cooperatives). We need more of them.

Will: ...if you asked most sane, independent people... what they thought of those 2 fellows, they'd probably put them a bit to the left...

Most people probably wouldn't even know who these two people are.

Will "take no prisoners" Hart said...

Walmart is not a monopoly! You've never heard of Target, Kohl's, K-Mart, Peebles, etc.?......And the solution to the jobs crisis isn't taking people out of the work force when they're still in their prime and having them collect infinitely more than they ever put into the system (a purely socialistic notion if ever there was one). That is insane. The solution to the jobs crisis is to make the country more competitive with the rest of the world, not less competitive. And you do that by reducing the corporate tax rate, cutting down on the red tape that people need to go through to start a new business, and by developing our own domestic energy supply.......You don't think that we should do any more deep-water drilling at all? Great, wd. Put us at even greater disadvantage to all of the other countries without such a ban.......Tariffs? Yeah, let's have another Constitutional crisis like we had back in 1832, that's the ticket.

Dervish Sanders said...

Will: The solution to the jobs crisis is to make the country more competitive with the rest of the world...

I know you didn't list these solutions, but how about... dropping wages significantly so we're on par with low wage countries? So what if the cost of living in the US is higher? People can go without health care, live in their cars, eat cheap food/starve a little.

Also, how about getting rid of the EPA? Being able to freely pollute would really cut costs for businesses. Both of these are "advantages" that corporations who manufacture in 3rd world countries have over corporations that manufacture in the US.

A lot more money is saved via these 2 "solutions" over those you suggested... so WHY would companies move back to the US if we did what you THINK would make us more competitive?

And Walmart IS a monopoly. The existence of other stores does little to mitigate the damage Walmart does to our economy.

Will: Yeah, let's have another Constitutional crisis like we had back in 1832, that's the ticket.

You're referring to something that happened pre-civil war. The states were stronger then. The Federal government is stronger today. It couldn't happen.

Jerry Critter said...

w-d,
Your two "solutions" are exactly what corporations want. They won't help the job situation, but they will increase corporate profits which of course is what corporations are all about.

Will "take no prisoners" Hart said...

Your Armageddon scenario is bullshit. The vast majority of people in this country don't even work for the minimum wage and the jobs of tomorrow will pay even more than what these people make now. We just have to educate our citizenry to the point in which they'd be able to handle the workload (a big problem because of the disgraceful and anti-reform ladened teachers unions).............And you obviously don't even know what a monopoly is. If Walmart "WAS" a monopoly, there wouldn't even be a Target, for Christ. And there have been a lot of studies that have guaged the effect of Walmart on communities and a lot of them have shown that Walmart is actually a slight net plus. You don't like Walmart, wd - then you and your weak-willed and underachieving progressive friends DON'T GO THERE! Don't try and take away my options, pal.

Will "take no prisoners" Hart said...

"It couldn't happen." How in the fuck do you know, Kreskin? There's a secession movement in Vermont. There's another one in Texas. This whole bullshit line of yours that protectionism doesn't hurt anybody I blew out of the water with an historical reference that you didn't even know about until I brought it up. Live with it.

Jerry Critter said...

"We just have to educate our citizenry to the point in which they'd be able to handle the workload..."

People know how to handle the workload as evidenced by the continuing increase in productivity. Thoses that need educated are corporations, who have not paid for those productivity increases for the last 30 years.

Dervish Sanders said...

Jerry Critter: Your two "solutions" are exactly what corporations want. They won't help the job situation, but they will increase corporate profits which of course is what corporations are all about.

I'm not sure what you're referring to Jerry. My suggestion to drop the minimum wage and get rid of the EPA? If so, then YES, that is what the corporations want, and also why we can't compete with these low wage/low regulation nations. I wanted Will to explain to me why he thinks we can.

But I guess the only rebuttal he has is some nonsense concerning pre-civil war southern states objecting to tariffs.

Dervish Sanders said...

Will: ...I blew out of the water with an historical reference that you didn't even know about until I brought it up. Live with it.

Hahahahahahahaha. That's funny Will. States are going to secede due to the federal government taking steps to bring manufacturing jobs back to the US? That's laughable.

This is Rick Perry wackiness dude. And you call me nuts?

Will "take no prisoners" Hart said...

No, Jerry, they can't handle the workload for an increasingly complicated and high tech world, as evidenced by the fact that, despite the fact that we currently spend more per capita than any other country except for Switzerland on education, we score increasingly more and more pitiful on math and science scores. We're rapidly turning into a dumbfuck and pitiful society that has to scrounge to keep a bunch of jobs that a frigging chimpanzee can do.

Will "take no prisoners" Hart said...

Yeah, wd, I believe that Jerry was talking to you, the 2 "solutions" that I didn't bring up AT ALL but that you brought up in an effort to create a bunch of strawmen. NOWHERE did I mention anything about getting rid of the EPA and dropping wages.......And, you're right (though I believe that polling for secession rises quite high in Texas), nobody will probably go as far as to secede for the Union but the point was indisputable that tariffs in fact DO HURT certain segments of the economy and the crisis of 1832 (which you were obviously ignorant of - add it to the list) de fact proves it. Period.............And your breaking up Walmart idea is even more insane. The federal government doesn't go around destroying (or they shouldn't) American companies just because they offend certain peoples sensibilities. That in fact WOULD be fascism with a capital F (you don't even know what a frigging monopoly is LOL).

Jerry Critter said...

Yes, I was talking to w-d which is why I addressed the comment to him...and I interpreted his two "solutions" as sarcastic solutions to your efforts to reduce costs for corporations.

By the way, reduced business costs do not result in more jobs or higher salaries, only higher profits and big bonuses for the top execs.

Rusty Shackelford said...

Jerry,perhaps you've never actually run a business,but reducing cost is a constant battle.How else would you continue to cover higher energy cost,higher labor cost,higher benefit cost?In any business you have to do it faster,cheaper and better then your competition or you lose...plain and simple.All the hearts and flowers dont put a penny on the balance sheet.You cant make a widget for three dollars in cost and sell it for two.If you try that you'll be another Solyndra.

All your bitching and moaning about higher profits and bonuses makes you sound like a friggin crybaby...if you want a piece of that pie...go friggin get it.If you dont have the smarts or ambition to make a run at it STFU and let others who do have a crack at it.Nothing personal here Jerry...just the facts jack.

Jerry Critter said...

I noticed, Rusty, that you did not refute what I said. Of course, that's because jobs and higher salaries are created by demand not profit.

Will "take no prisoners" Hart said...

But increasing business costs can cause an economy to lose jobs if in fact that business, you know, bites the dust and goes out of business. And not everybody who benefits from a better bottom-line is a wealthy executive. A lot of middle class people (through their pension and whole life insurance policies) also benefit.

Rusty Shackelford said...

Jerry,just what the hell did you say that I did'nt refute?

Business is exactly that...its business.Its not a non-profit,its something people invest in...yes,even union pension plans....hell,even your 401.Business is here to generate profits for its shareholders....hell,if you have a 401 you may very well be one.

Jerry,if someone has invested capital in a business they did so to make a profit,not to make their employees feel warm and fuzzy.The employees are there to make the business successful...to do the job they are getting paid to do...the best they can.If the person who put up the capital to give them jobs makes 100 times what they do....so be it,it was his money that enabled them to have a job.If you want say in how the business is run save up and buy it,otherwise put your head down and go to work.

Jerry Critter said...

What's wrong, Rusty? You can't read?

Rusty Shackelford said...

I read quite well Jerry.Seems its you who has a problem understanding just how the bussiness community works.

I get the feeling you think a bussiness just appeared
and is here to accommadate its workers.Not so my friend...its here for one reason and one reason only....to make money for the people who invested in it.The workers are there earning a salary,they earn that salary for performing a function that will contribute profit for the investors.Now,I know you're going to bring up the profits made by the company and what share the workers should receive.If by contract they should recieve a certain ammount....then thats it...not a dime more...thats what they agreed to.If a job a worker does for the company is worth 15 bucks an hour....thats what they should be paid.

Jerry,Im guessing you're either a teacher or a government worker....If you are either I would;nt expect you to understand the real world.

Jerry Critter said...

It would appear that you agree with my comment where I said, "reduced business costs do not result in more jobs or higher salaries, only higher profits and big bonuses for the top execs."

Will "take no prisoners" Hart said...

The bottom 90% owns 19% of individual stocks and mutual funds, 41% of pension funds, and 45% of whole life policies. It isn't a purely rich versus poor or either versus or scenario, Jerry.