Policy: Entitlements

Don't extend unemployment benefits

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Opinion,David Freddoso,Columnists,Jobs,Entitlements,Economy,Welfare,Unemployment

People who find themselves unemployed today are no more lazy or unworthy than you or I. They've just fallen on hard times — as a lot of people have in recent years, and as more are sure to in the years to come. They don't want to go on unemployment benefits, which in most cases pay much less than nearly any job.

But that doesn't mean it's a good idea to maintain a permanent unemployment benefits regime that goes on for a year or even two.

As the new year began, Congress allowed its extended unemployment benefit program to expire. Depending on what state you're in, tens of thousands of people will probably lose benefits immediately, and many more will see them run out in the next few months. Depending on the state, benefits for the newly unemployed will go back to roughly 26 weeks.

Legislators may revisit the issue, and if they do, they should first look at what happened in North Carolina, a state that cut off extended benefits already and found that it doesn't end the world — it just hastens the inevitable.

In July, North Carolina became the first state to end extended unemployment benefits altogether. As John Hood notes in the Carolina Journal, the number of employed in the state jumped by 39,000 between July 1 and Nov. 30, after standing still for the entire first half of the year. The state's unemployment rate had taken more than two years to come down by 1.5 points to where it was in June (8.8 percent). Between July 1 and Nov. 30, it declined by roughly that amount (to 7.4 percent). During that same period, about 26 percent fewer workers were dropping out of the workforce each month than had been previously.

That's at least enough to conclude that the world didn't end. It may even suggest an upside to returning benefits to their normal duration. In a market with few good jobs available and long-term unemployment benefits, it was rational for earnest job-seekers to hold out for something better than what was there.

But when the issue is forced, some job is better than no job at all.

The supposed “new normal” is a permanently less dynamic economy. In that context, extended benefits are just adding months before people have to accept the disappointing, lower-paying jobs that eventually await them anyway. Nobody wants it to be that way — it just is.

Unemployment insurance is a good thing. If your employer wasn't required by law to pay for it, you'd consider buying it yourself. Jobs disappear even in the best of economic times, and it can take months to find a new one that's a good fit. Unemployment offers a modest short-term income stream while you look.

Unemployment isn't “welfare.” First, it's only available to those who have paid in. Second, it isn't meant as part of our safety net for those who cannot support themselves at all — which will still be there for those who need it when benefits end.

Congress extends unemployment benefits in hard times in hopes that it will tide people over until the job picture looks like it did before — betting that a recovery, though delayed, will materialize eventually.

But what if the good jobs just aren't coming back? What if, in the three and a half years since the number of jobs bottomed out, employment remains flat, near a 30-year low? In that case, you might start to think the employment picture just is what it is.

Sadly, that's where we are now.

David Freddoso, a Washington Examiner columnist, is the former editorial page editor for the Washington Examiner and the New York Times-bestselling author of "Spin Masters: How the Media Ignored the Real News and Helped Re-elect Barack Obama." He has also written two other books, "The Case Against Barack Obama" (2008) and "Gangster Government" (2011).

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