Senate jobs bill: the perils of extended unemployment benefits
The Senate jobs bill eases hardship by extending unemployment benefits to the long-term jobless. But it also raises the question of whether these benefits have become another entitlement.
The Senate jobs bill, approved by a vote of 62 to 36, has touched off a couple of red-hot debates.
One is how to pay for its extension of unemployment benefits for qualified jobless who have been out of work for more than six months.
The other, more thought-provoking one, is whether jobless benefits, because of multiple extensions approved by Congress, have morphed into an entitlement.
The Depression-era program was originally intended as a temporary bridge to help the jobless until a recovery put them back to work – though nearly two-thirds of unemployed workers do not qualify. During a more normal downturn in the economy, states help people who have been laid off with jobless benefits lasting 26 weeks. But now, in some of the hardest-hit states, the long-term unemployed have been able to collect benefits for as long as 99 weeks – almost two years.
Some would argue that the long-term availability of unemployment insurance has turned it into something like welfare in the days before reform: open to abuse and not helpful in encouraging people to actually look for work. “Continuing to pay people unemployment compensation is a disincentive for them to seek new work,” said Republican Sen. John Kyl, of Arizona.
Others point to studies that show generous and longer-lasting jobless benefits lead to a longer duration of joblessness.
But states are hardly handing out checks that put the jobless on easy street. The average unemployment payment in the last quarter ($311 a week) amounts to about a third of the average weekly wage of American workers. Many of the studies that talk about the downside of generous jobless benefits examine other countries, such as Austria and Canada, with far greater largess.
The argument about a disincentive to look for work seems almost irrelevant, given the scope of the problem – 9.7 percent unemployment, in which there are about five unemployed Americans for every current job opening. Most Americans want to work.
