Extended Unemployment Benefits Not Turning Jobless Into Slackers: Study

Extended unemployment benefits for the long-term jobless are not a major cause of the high U.S. unemployment rate, according to a new study that comes as lawmakers debate whether to keep extended benefits beyond their slated January expiration.

Many conservatives have argued that extended unemployment benefits encourage the jobless to sit on the couch instead of looking for work. Reauthorizing the benefits through next year would cost roughly $50 billion.

"This economy will not recover if we're going to continue to borrow money, put the debt on the heads of our grandchildren, and think that spending money solves anything," Rep. Steve King (R-Iowa) said during a Thursday speech on the House floor. "We've got to get this country back to work and get those people out of the slacker rolls and onto the employed rolls."

Conservative economists have said extended benefits could have increased the unemployment rate by as much as 2.7 percentage points, but Jesse Rothstein of the University of California, Berkeley found otherwise. According to his analysis (PDF), extended benefits "raised the unemployment rate by only about 0.2–0.6 percentage points, much less than is implied by previous analyses."

And Rothstein says more than half of that increase could be caused by benefits recipients searching for jobs -- thereby remaining part of the labor force -- instead of just giving up on their search. (Benefits recipients must look for work to qualify.)

"The evidence here thus supports the view that optimal [unemployment insurance] program design would provide for generous extensions of benefit durations in deep recessions that last until the labor market is strong enough to give displaced workers a realistic chance of finding new employment before their benefits expire," Rothstein concluded in the report.

In an interview, Rothstein said his work ought to change the course of the debate in Washington. "I wrote this paper because there are all these people arguing this was a big effect, and we just didn't know," Rothstein said. "What the results say is, [these people] don't have much of a point."

HuffPost readers: Send your tale of joblessness to [e-mail]. Please include your phone number if you're willing to do an interview.

In normal times people who lose their jobs through no fault of their own are eligible for six months of state-funded benefits, and in recessions since the 1950s, the federal government has always provided extra weeks of assistance. During the Great Recession, Congress gave the jobless as many as 73 weeks of aid, for a total of 99 weeks in some states -- more than during any previous downturn.

The federal benefits are set to expire in January. President Obama and congressional Democrats want to reauthorize the aid, but Republican leaders have been cool to the idea. The White House has added a sweetener, however, by proposing that states adopt "Bridge to Work" training programs that have been popular with Republicans.

According to the Labor Department, more than 3.5 million long-term unemployed currently receive benefits. State and federal benefits combined kept 3.2 million people out of poverty in 2010, the Census Bureau reported on Tuesday.

Arthur Delaney is the author of "A People's History of the Great Recession," HuffPost's first e-book.

Comments

[studiodanny55]

01:45 PM on 09/24/2011

I lost my job in July, 2008 and became a 99er. Attempts to find work were unsuccessful. If I managed to even get an interview, my work spoke for itself - I'm a talented, very qualified graphic designer - but being in my mid 50s made me less desirable than a newbie out of college who knows all the computer programs and is willing to work for starting or "intern" pay.

The real slackers are those pompous, arrogant overpaid stuffed shirts in the GOP that are as slackardly (my word) as they come. Doing nothing to further the betterment of our nation while enriching themselves with raises and living like royalty. They're seldom in session and exemplify the "class warfare" they so righteously accuse others of. They're handsomely paid to not do their jobs... followed by a golden parachute retirement plan and a job as a lobbyist for whatever corporation they pimped while in office.

That 99 weeks of unemployment kept me from using my IRA for food. They should be ashamed of themselves, but have made clear that shame isn't in their vocabulary except to blame and shame others.

Meanwhile, I've given up looking for work and am trying, with other unemployed friends, to start a small business in an effort to create an income stream to save our homes and become productive in our communities again.

[PatrickforO]

03:08 AM on 09/24/2011

In all, I would say the magnitude of the slacker problem does NOT justify ending extended benefits in times like these. To explain, the actual return on public investment from $1 public dollar spent on unemployment payments is around $1.67. Why? Because the people receiving the benefits go out and buy stuff when they otherwise would not. What this means is the demand is held relatively constant (though in this recession, unemployment payments could not replace demand lost by loss of wages through layoff; unemployment is seldom as much as the person formerly earned - it maxes at around $290 a week is most states). Anyway, crunch the numbers on the ROI from each $1 spent and you'll see that the benefit in retained demand for goods and services far outweighs what we're losing paying out to slackers.

[PatrickforO]

03:02 AM on 09/24/2011

There are some nuances, however, if you do go through the study. The U-3 unemployment rate (the one the press reports) is based on a monthly survey of around 60,000 households. Not all the people who count as unemployed are receiving unemployment insurance payments. The U-3 rate is affected if someone gives up between surveys and says, no I'm not looking any more, or conversely, they think their chances are better and are now looking when they weren't before. This study found that extended unemployment actually raised the number of 'exits' back into the rolls of the employed, because people who would otherwise have given up stuck it out those extra weeks provided by the extension and found work.

[PatrickforO]

02:55 AM on 09/24/2011

I read the study and it's pretty convincing. Right now, there are 13,967,000 out of work Americans. The unemployment rate is 9.1%. If the rate of abuse of unemployment benefits ranges between 0.2% and 0.6%, then without extended benefits, the unemployment rate would be between 8.5% and 8.9%. There are 153,594,000 people in the labor force. If this is the case, then out of 13.9 million unemployed, the number of slackers ranges from 307,000 to 921,000. At an average payment of around $240 per week, nationally, and an average duration of 40.3 weeks, taxpayers are spending between $3 and $8 billion. That said, slackers only number 2 to 6 people out of every thousand. It is amazing how many people are honest, and equally amazing how much the slackers are costing.

[Teresa Young]

05:41 PM on 09/19/2011

Lost my job it left and is not coming back and neither are thousands of jobs lost here in Southern Oregon that went by-by forever,,,,,,, lost my home and pretty much everything else,,,, why would I need an unemployment extension??????????????? hell I donate plasma and make $45.- a week and support 3 on it,,,,,, why would I need anything else.

[FBO2012]

02:01 PM on 09/19/2011

Amazing that the left can actually roll out a study that PROVES extending unemployment benefits does in fact increase unemployment but because it's "only 0.2 to 0.6%" it's somehow OK. Why in the world would we want to do anything that costs BILLIONS of dollars that increases unemployment at a time like this? How insane is it to ask for another 50 billion in unemployment benefits that in return we get MORE unemployment!!!

[BBackSoon]

12:27 PM on 09/19/2011

These are the exact same Right Wing talking points they have been using for what 80+ years?

[aNdYtm]

11:10 AM on 09/19/2011

yeah, 6 yr terms and no term limits are making some people extremely lazy besides being incompetent in their jobs.

[walkermv]

11:40 AM on 09/19/2011

We have term limits, they're called elections.

[loki]

08:20 AM on 09/19/2011

doesn't matter what you have proof of. The top 1% automatically thinks everyone else is lazy, and should never be helped out. You should only give trillions in hand outs to the top 1%, for they dont know how to work, and they need as much as they can get because of it. They can take, but they can make.

[studiodanny55]

01:50 PM on 09/24/2011

You started out making sense but ended up saying... what? I was with you all the way to the last sentence.

[Squirdlock]

01:01 AM on 09/19/2011

those loud bursting sounds are koch_roaches' bubbles

[Mister Grumpy]

12:38 AM on 09/19/2011

All baggers think people on unemployment are lazy slobs........ no survey, poll, or study will convince them otherwise..............

[Under Fed yet Fed Up]

09:56 PM on 09/18/2011

Typically a State will provide unemployment payments for 26 weeks. The federal government has added 73 weeks to that.

I've been unemployed for an extended period before. It;s not fun. And it's hard work looking for work. But it doesn't take 8 hours a day.

Why can't we ask for some small amount of community service in exchange for these payments beyond the first 26 weeks? Eight or ten hours a week picking up tracsh, painting over graffitti, tutoring students, volunteering at non-profit organizations or any number of tasks that would benefit the community really isn't too much to ask.

[MiddleMolly]

10:58 PM on 09/18/2011

Actually, if you want to apply for jobs and network for 8 or more hours a day, you can actually spend 8 hours a day applying for jobs and networking. It's unclear from your post if you were unemployed in this economy or not. People who have been unemployed before and who are unemployed now have said that this is a completely different economic environment. We've never so many people unemployed for so long since the Great Depression.

I have very mixed feelings about asking the unemployed to do anything other than just look for work. The first thing that many people (women and men) who become unemployed and have children at home do is to pull their children out of day care or let the nanny go so they can save money. They look for work when their kids are sleeping or when the other parent is home or they depend on neighbors, friends, family and occasional sitters when they have a job interview. I would think that they could be excused from such community service.

MORE>>

[MiddleMolly]

10:58 PM on 09/18/2011

Part 2...

Then there is the issue of setting up and administering such a program. How much would it cost to set up and administer? Where do cash-strapped states find that money? What about injuries? What if an unemployed person is run down while he or she is picking up trash.. or falls off of a ladder while painting over grafitti? And who does the background checks on people tutoring or working with kids? How do we determine that someone really is knowledgeable or competent enough to tutor? If your kid was in an after school program that involved homework help, for instance, wouldn't you want to be sure that the unemployed volunteers in that program were not pedophiles, addicts, or just plain d#mb?

We're talking about 7 million people receiving benefits. That's a pretty huge number.

Here's my "series" on how several unemployed people that I know are trying to hang on:

What is poverty and unemployment in America today?

http://mollysmiddleamerica.blogspot.com/2011/08/what-is-poverty-in-america.html

The unemployed people I know are pretty busy.

[MiddleMolly]

02:23 AM on 09/19/2011

(I want to make it clear that I do not believe that the unemployed are addicts, ped@ph iles or d#mb, but I think that background checks would need to be done on any person who works with kids.)

[studiodanny55]

02:15 PM on 09/24/2011

WOW! I went to your blog and your examples of lazy unemployed people struck a nerve on many levels. Being ADHD has compounded the difficulty in my efforts to be like "everyone else". Your examples show that no matter how hard one might work, unforeseen circumstances can simply sweep one helplessly into the gutter.

Without that data, or not even caring that it's there, the "job creators" callously send jobs overseas and continue their comfortable lives while continuing to look down their noses at those "lazy bums" who just don't want to pull their own weight.

[Michael Thornton]

07:56 PM on 09/18/2011

I guess if right wing think tanks say that unemployment benefits don't dramatically alter the unemployment rate, then it must be true. This is rehashed news, since the same conclusion was reached by the San Francisco Fed two years ago http://www.frbsf.org/publications/economics/letter/2010/el2010-12.html
The right keeps belittling the unemployed and making them the scapegoat of the right's failed economic policies. Instead of accepting the blame, the right tries to blame the less fortunate. It's like blaming rising poverty on the poor.

[MiddleMolly]

12:19 AM on 09/19/2011

Thanks for posting that, Mike. I had a few other good links that I will try to find, but I just saw this as well: A very recent article on the issue from our good friends at Heri.tage.o.rg.

http://www.heritage.org/research/reports/2011/09/extended-ui-payments-do-not-benefit-the-economy#_edn4

I've read several essays, most from the various branches of the Fed, that debunk the same sources that the Herit. uses. I also notice that Heri.org has no room for comments on its articles.

There are some recent (April) Fed articles that seem to support the idea that somehow jobs would miraculously appear if only we didn't have those n@sty unemployment extensions. While searching through them, I found this statement of method:

"They use questions from the Current Population Survey (CPS, conducted by the U.S. Bureau ofLabor Statistics) on the reason for unemployment to identify “involuntary job losers,” who comprise most of those who would be eligible for UI. The control group consists of “voluntary job leavers” and labor force entrants, most of whom would be ineligible for UI."

So.... the people who did this study assume that people who left their jobs (for whatever reason) and therefore don't get UI benefits can somehow be compared to people who were laid off and therefore are getting UI benefits?

MORE..

[MiddleMolly]

12:23 AM on 09/19/2011

Part 2..

It seems to me that people who leave their jobs in a severe recession either a) Have other financial resources, or b) Have a skill set that makes them more marketable when they elect to return to the job market, so they don't fear leaving. To compare these two groups and say that their findings are meaningful is completely bogus.

The only meaningful comparison would be to take people who have been laid off (not who have quit), control by the month in which they were laid off, age, industry, region of country, experience, type of job, etc., and compare those who get extended benefits up to 99 weeks with people who live in places where they don't get that many weeks of unemployment benefits (if the states have similar employment pictures). Then compare unemployment rates of people in the last 10-20 weeks with unemployment rates of people who have already stopped collecting. I don't believe we have that kind of data, as CPS doesn't inquire as to whether or not respondents are getting unemployment assistance.

And why aren't these pontificators and researchers looking at the JOLTS reports? It doesn't take much in the brains department to compare the numbers of job openings, the numbers of new hires vs. the number of separations to understand why we have such a high unemployment rate.

My blood pressure must be sky high today after reading some of this stuff.

[studiodanny55]

02:21 PM on 09/24/2011

AND, my new friend Molly, you aren't even mentioning that some of those so-called job search sites like Monster and CareerBuilder are discouraging the unemployed from signing up. They don't want you if you don't already have a job! They want people who are moving sideways and diagonally in the workforce. Don't have a job? Never had a job? Please don't waste our time.

Your posts have made my day. I just don't feel as alone as I did, say, when I woke up this morning. LOL Cheers to you!

[judiNJ]

12:48 PM on 09/18/2011

So, for those unemployed who are young enough, don't have family responsibilities and have imagination, why not join the Peace Corps or go "on the road".... We sure did when I was right out of college. Even my Dad took off to Europe by working his way over on a cattle ship back in the 30s and spent a year learning to speak French. Came home with a dollar in his pocket and tons of adventures. I had a plan: I would get a map and a dart and borrow $50 from my Dad, and then throw the dart at the map, go there in a bus and find a job as a waitress, work there for a while to earn enough money and then move on... then.... after a year of "on the road", come home and write a book. I didn't do it because I landed a job and chickened out, and have regretted it ever since. Just think, now you could even write a Blog from the road, end up famous on YouTube, on The Daily Show.... hey..... where's the imagination. Anyone with some initiative and no family to support can do ANYTHING to wait this job mess out and just THINK of your resume!!!

[MiddleMolly]

06:23 PM on 09/18/2011

3,700,000 of the "officially" unemployed are age 24 or under. Many are students looking for full or part-time work. I can't find statistics on how many of that group are recent grads who are trying to enter the work force. Perhaps your advice would be considered by some of those young people who are unemployed, though most college grads today need to work to pay back heavy student loan debts.

7 million of the long-term unemployed are aged 35 or older, including 2 million who are older than 55 and another 2.5 million who are 45 to 54. This age group is overly represented among the long term unemployed.

I will say that quick jobs are not that easy to get, either here or abroad. Background checks, everify, etc., means that it isn't that easy to pick up a few bucks here and there. I'm not sure what occasional jobs in Europe are like these days, but the only kids I've heard of who are touring Europe waiting out the job situation are from pretty wealthy backgrounds. Not sure how little money you can survive on in Europe these days.

[msanonymous222]

06:33 PM on 09/18/2011

Oh, boffo advice. So let's see. You're comparing Dad in the 1930s on the cattle ship to today. So today, our young grad gets on the cattle ship...oh wait, can't do that...so he gets in the car, tank on empty, family car, they're all out of work (becoming more and more the norm), and he has no money for gas, let alone gas to other states in the wild blue yonder for his great adventure. But let's assume he does. So he finds money for gas, and he parks the car everyone needs back at home, and he goes to Joe's Diner and says, "I AM HERE. I HAVE ARRIVED!!!!" and Joe tells him there aren't any openings, and wait in line with the other servers, cooks, dishwashers, etc. who want jobs at his restaurant. But Joe has little business at the moment. So so far, we have a kid with no money, no gas, taken the family car, drove as far as he could to a place where no one's hiring.

Tell me that cattle ship story again. I love to hear about days of yore. Then come into today's reality. Today, you have to start with SOMETHING and most of us who are suffering don't HAVE something. If you don't have a few bucks, you can't just fill up the tank, drive to x place, get a quick job to put some money in the pocket and move on. That's so 1970ish.

[judiNJ]

05:58 PM on 09/19/2011

My God, no wonder we are in such a fix. Doesn't anybody have an once of imagination anymore? You people have just rolled over.... no wonder people aren't hiring anyone.

[dayzee10]

11:06 AM on 09/18/2011

I just hope that anybody who is unemployed, or has been unemployed will remember how the Retealibanbaggerican Party feels about them, how the party has roadblocked remedies and how the party has protected the top 2% and the corporate greed machine. And then VOTE!!

[spinotter11]

11:49 AM on 09/18/2011

Ah, but that's the genius of the GOP. They are stealing America blind and yet have managed to convince enough voters that socialism is the root of all evil.

[Binea]

04:05 PM on 09/18/2011

BOTH parties insist on keeping Nafta.
make Obama do the right thing..Put Ron Paul up against him. ( I suspect Obama doesn't have alot of control,not what he should,and the MIC and Fed ( bunch of banksters) have a firm grip on our government.
Obama will eigther be forced to do the right things by us..or Ron paul will win and he will do them.
help us make Ron Paul the GOP nominee
are you ready to help us make Ron Paul the GOP nominee yet ? calif..kno­ws who the right guy is..he won the straw poll there..I haven't checked the news..are they trying to pretend it didn't happen ,yet ?

http://www­.dailypaul­.com/12852­2/hr-4759-­repeal-naf­ta

http://cit­izen.typep­ad.com/eye­sontrade/2­007/07/ron­-paul-for-­fr.html

[MiddleMolly]

11:20 PM on 09/18/2011

Why would anyone who is unemployed or struggling in any way support Ron Paul? He doesn't even want federal aid for people who have had everything destroyed in a hurricane in his home district.

Can you tell us in your own words why anyone who is struggling should consider Ron Paul at all? Over NAFTA? He couldn't get rid of it, so what would he do?