Blaming the unemployed for being unemployed.
For some odd reason, the realities about unemployment at times seem to take a backseat to anecdotal events, opinions and small data sets. What follows are a couple of examples of how the unemployed are pictured as wanting an unemployment check instread of a job.
First there’s the anecdotal from Holland, MI:
As job picture brightens, some still content with unemployment checks
With thousands still unemployed in the area, Workforce Management President Ruben Juarez management thought he would have at least a few hundred people come to a job fair with 25 job listings. Instead he got 30 or 40.
“I’d figured we’d be swamped for as many people that should be out there looking for work,” he said. “We’ve been having a hard time filling these positions even though you’d think people would be coming to us.”
This phenomenon was most visible in November, when federal unemployment benefits were in jeopardy.
“We had hundreds that applied in that week when everybody thought they were going to run out of unemployment,” said Kristen Netzler, a customer service specialist at EmploymentGroup in Holland.
“After it got extended again, it went right back down and many of them didn’t return phone calls.”
The reporter, PETER DAINING,should have asked a few follow-up questions that would have made this report more credible. What kinds of jobs were being offered? Were these temprary part-time jobs that would end shortly? Did these jobs require a special skill-set?
Many unemployment offices contact unemployed individuals who meet certain job requirements for particular jobs. Why doesn’t the state have a rule where an unemployment check can be delayed if an unemployed person doesn’t return a call to the unemployment office? How was this particular job fair advertised to the unemployed?
There are too many unanswered questions to simply determine that the unemployed weren’t interested in a job. What I’ll determine with the lack of information provided in this article is that the unemployment office was lax in getting the job fair information to the unemployed. The office was incompetent and lacks the ability to communicate effectively, which is very similar to the reporter’s headline slant.
Unemployment data from the 1980s that distorts today's reality
Another fallacy is that unemployment benefits are consistently abused and lead to much higher unemployment rates. James Sherk of the Heritage Foundation repeatedly argues that unemployment benefits are not economically simulative and that they lead to higher unemployment rates because the unemployed don’t look for work seriously until unemployment benefits are nearly exhausted. He’s correct to a point, but his presentation leads to the conclusion that all unemployment extensions counterproductive.
- Longer unemployment
- The consequences of extended unemployment benefits are some of the most conclusively established results in labor economic research. Extending either the amount or the duration of UI benefits increases the length of time that workers remain unemployed.[2] UI benefits reduce the pressure to make difficult choices—such as moving or switching industries—to begin a new job.
- Roughly one-third of workers receiving UI benefits find work immediately once their benefits expire. This happens both when unemployment is high and when unemployment is low.[3]
- Economic research shows that each 13-week extension of UI benefits increases the average length of time workers receiving benefits stay unemployed by approximately two weeks.[4]
The study that Mr. Shrek refers to was performed in Pittsburgh, PA from 1980-1985 and it shows that many unemployed found jobs as soon as their benefits expired. In fact almost 1/3 of all unemployed found work just as their unemployment ended. I am not in a position to argue with those findings, but here’s what a recent Federal Reserve study showed about how extended unemployment benefits are affecting employment during the Great Recession:
Although economists have shown that extended availability of UI benefits will increase unemployment duration, the effect in the latest downturn appears quite small compared with other determinants of the unemployment rate. Our analyses suggest that extended UI benefits account for about 0.4 percentage point of the nearly 6 percentage point increase in the national unemployment rate over the past few years. It is not surprising that the disincentive effects of UI would loom small in the midst of the most severe labor market downturn since the Great Depression.
It’s obvious that the study quoted by Mr. Shrek is in conflict with the Federal Reserve study. Comparing 1980s to the 2010s job market is unfair, since they are quite different animals. The Federal Reserve study is more recent and details the job market of the Great Recession, while the Shrek referenced study is from the 1980s job market.
I won’t go into all the comparison between the 1980s and 2010s job market, but there are some major differences:
The average length of unemployment during the 1980s was 10 weeks compared to 25 weeks today. The 1980s offered manufacturing jobs that returned once the recession ended. Today, millions of manufacturing and other professional jobs have been outsourced to other countries. Those laid off during the Great Recession can no longer can count on manufacturing jobs to return and therefore their length of unemployment is going to increase.
EPI produced an excellent report about job losses and recessions and pointed out this interesting comparison concerning total nonfarm employment at the start of each recession over the last 50 years along with employment 17 months later. Employment has decreased much more during this recession — 4.3% — than in prior recessions. In particular, during the first seventeen months of the recession of 1981/1982, employment declined by only 3.1%.
In the 1980s the BLS did not keep statistics about jobs available per unemployed person, but it’s highly unlikely that there were as few opening per unemployed/underemployed as there are today:
There were 2.8 million job openings on the last business day of January 2011.
There are 24.7 million unemployed and underemployed, which means there are 8.8 unemployed/underemployed per job opening! After all, the underemployed are looking for full-time work and should be included in any discussion about those looking for work.
While there are likely some unemployed who would rather collect an unemployment check than work for a living, the unemployment facts concerning this Great Recession don’t indicate that a large number of unemployed are abusing the system.
99er advocates:
If you are interested in seeing videos about the 99er experience and how some feel about the American economic system today, you may enjoy visiting concernedinKY at YouTube. A video of his work is also attached to this post.
Quite a few 99ers are trying to help tell the 99er story. A few of those efforts follow
- Unemployed but Organized for the 21st Century
- POPVOX appears to be an excellent resource for keeping track of legislation:
The Daily List
Congress.org has a great media contact list:http://www.congress.org/congressorg/dbq/media/ as does http://www.fair.org/index.php?page=111
You can find your representatives contact information at: http://conservativeusa.org/mega-cong.htm, or at http://www.congress.org/congressorg/directory/congdir.tt.
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Huffington Post
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