200,000 about to lose unemployment benefits
Job seekers line up to apply for an opening with Major League Baseball's Miami Marlins on Nov. 15, 2011 in Miami, Florida. / Joe Raedle/Getty Images
(MoneyWatch) COMMENTARY Unemployment benefits are scheduled to end in many states Saturday, and about 200,000 people will lose their benefits, nearly half of them in California. Under the terms of a benefit extension agreement in Congress last year, benefits would be cut off if unemployment rates fell below certain thresholds, and despite the weak job market, rates have been falling.
With unemployment rates as high as they are, is cutting benefits a good idea? Will a cut in unemployment benefits motivate workers who have become dependent on the program to go out and find jobs?
Unemployment compensation creates both costs and benefits for the economy. On the benefit side, it promotes better matching of jobs with individuals, and it helps households avoid the difficult economic problems that come with unemployment. For example, we don't want an unemployed electrical engineer to be forced to take a job at McDonald's out of economic necessity. It is much better for the individual and for society to match the individual with what he or she does best, engineering. If that takes several weeks, we will still be better off in the long-run since the person will add much more to the economy working as an engineer than flipping burgers. In addition, the extra income that households receive (in benefits), which is mostly spent, creates more demand in the economy. This additional demand supports the employment of the people providing goods and services to these households. Thus, the cost of extending unemployment benefits is longer search time -- more unemployment -- and the benefit is better matching, less household suffering, and additional demand.
During a severe recession, the number of jobs available is far lower than the number of people searching for employment. The ratio of job seekers to job openings was as high as 7 to 1 at the peak of the recession, and it remains elevated at 3.4 to 1. (In normal times, the ratio is much lower, at around 2 to 1.) This means that most workers won't find jobs no matter how long or how hard they search -- which is why long-term unemployment is at record highs. In such a situation, extending unemployment insurance relieves household economic problems, so there is a benefit, and the benefit comes at very little cost in terms of extending search times.
Will cutting unemployment benefits now, as many states are about to do, produce net benefits for the economy? Probably not. With the ratio of job seekers to job openings still so far above normal, reducing unemployment benefits is unlikely to do much to lower the unemployment rate. Even if people search longer and harder once benefits run out, where will they work? Likely possibilities: They will enter the underground economy, go on long-term disability, or pursue other less than desirable means of supporting themselves. That's not what we'd like to happen.
When we get closer to full employment, the tradeoff will change. As jobs become more plentiful, the necessity for retaining extensions to unemployment compensation eligibility will fall. But we are not there yet, unemployment remains elevated while jobs remain scarce. Cutting unemployment benefits will make it harder for struggling households to survive while doing little to alleviate the unemployment problem, and the decline in demand from the benefit cuts will make it even harder for the economy to recover.
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The money taxed from business to pay unemployment benefits prevents job creation Professor Thoma. Maybe if economics professors stepped out of the ivory tower they would understand how the real world works.
If an engineer takes a temporary job as a burger flipper why can't he continue to look for a job ... a better match?
This economist received his degree from a cracker jack box. It's embarrassing that Oregon has this moron on staff.
If an engineer takes a temporary job as a burger flipper why can't he continue to look for a job ... a better match?
This economist received his degree from a cracker jack box. It's embarrassing that Oregon has this moron on staff.
Where did you get your degree?
Oh, right, you don't have one.
http://www.economicpopulist.org/content/great-worker-shortage-lie-alive-and-well
Excerpt:
***
The lies about worker shortage are coming in fast and furious. Like most things bought and paid for in D.C., the few Congress representatives trying to do something for the U.S. worker come in all political flavors. While the house passed a backdoor green card increase, Senator Chuck Grassley put a hold on the bill in the Senate. Why? Because Americans are being displaced by foreign workers and there still are no protections for Americans.
Longtime H-1B visa reformer Sen. Chuck Grassley (R-Iowa) is blocking Senate action on a bill to eliminate per-country caps on employment-sponsored green cards because "it does nothing to better protect Americans."
The bill, the "Fairness for High-Skilled Immigrants Act" (H.R. 3012), which sailed through the U.S. House late last month on a 389-to-15 vote, eliminated per-country caps on employment-sponsored green cards.
But Grassley, who has been fighting for major changes in the H-1B rules, didn't specify what changes he is seeking to the House bill. It's possible that he may be using the legislation to seek broader concessions in the use of all employer-sponsored visas, including H-1B.
Grassley, the ranking Republican on the Senate Judiciary Committee, last week placed a "hold" on the bill, putting it in a procedural limbo that may sink this effort.
College graduates cannot get jobs:
"I'm frustrated," said Sergey Savrasov, 21. Savrasov recently graduated from UC Santa Cruz with degrees in computational mathematics and business management economics. He now works for a Davis moving company.
Since the start of the recession, the number of new college graduates in California working as cashiers, office clerks, retail salespersons, bartenders, secretaries, child care workers, tellers and customer service representatives has jumped by 40 percent, or 12,000, according to a Bee review of census data.
Make no mistake, corporate lobbyists run think tanks are spewing out economic fiction daily and they have gotten to almost all Presidential candidates to parrot their nonsense. No folks, increased immigration does not help the economy. It does line the pockets of multinationals and especially Indian offshore outsourcers.
Infosys, a notorious Indian body shopper and user of H-1B Visas got the whistle blown on them and now they are coming under the eye of the Fed. Yes, this huge Indian body shopper is under criminal investigation for Visa fraud.
Granted, that's the most looney and cynical comment you'll ever read... and one I have not supplied any evidence to back up, unlike others in the past before people whined I was "spamming" despite their not realizing that not everybody looks up their own posts 100% of the time... so at least it was good to read that some saw some articles on a couple of occasions...
I've sent you enough links to prove that in the past, so before you claim anything you need to go back through rather a lot of articles to find what I had taken the time to show you and then you need to read and watch them.