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An Alternative to Long-Term Unemployment Compensation

Posted: 07/02/10 03:51 PM ET

One of the most durable and popular government programs in the United States to deal with the problem of unemployment is that of unemployment insurance. During the past few decades, this financial support program has been limited to six months after a worker is laid off, while continually seeking new employment, unless Congress approves short extensions. The House of Representatives has voted to extend unemployment benefits and the Senate will take up this issue in a few weeks, having rejected this initiative earlier.

During the current recession, the official nationwide unemployment has hovered at around 10 percent of the workforce, with more than eight and one half million citizens currently unemployed, and with most receiving unemployment compensation. With few new jobs being created during the past two years, most of the unemployed workers have been unable to find new work, which has resulted in more than one million workers remaining unemployed for more than one year.

It is common for companies looking for new workers to not consider hiring unemployed persons, fearing that they may have been laid off because of poor performance, but rather seek those who wish to transfer from their current jobs. Many of those seeking employment have become so discouraged that they are listed as no longer looking for work, making the unemployment statistics appear better than actually is the case. Many other workers are currently employed in jobs that are considerably lower than their previous positions, and often only part time, which limits work benefits such as health care. More than seventy percent of workers who have been laid off are males. Unfortunately, those unemployed for more than a year often become discouraged, and it has been reported that they have less than a fifty percent likelihood of ever going back to full-time work.

Many of the jobs from which workers have received pink slips may not be available again when the economy returns to a more normal state since advances in technology are rapidly changing the positions needed in the work force. While the issue is coming up again, Congress has recently turned down legislation to extend unemployment benefits for an additional six months or longer, which means that many of the long-term unemployed will become destitute, without any income. Sociologists, economists, and other social scientists have found that that crime, spousal abuse, delinquency, drug addiction, alcoholism, homelessness, and many other social ills stem directly or indirectly from unemployment.

As one important example, sociologists were mystified by the fact that suicide rates tend to fall in time of war until economists found that since the unemployment rate falls in time of war that change leads directly to a reduction in the number of suicides. As we see it, it would be beneficial to use government funds or programs to provide jobs which might enhance many communities and national infrastructure, such as road reconstruction, national and state parks maintenance, helping in home construction in underserved communities, assisting in the Gulf oil spill disaster, and many others. Although these jobs may not necessarily be similar to those which workers had before being laid off, they often do not require advanced technical skills.

The American worker, in most cases, receives psychological and self esteem benefits from being able to earn an income from some form of gainful work. Long-term unemployed workers might be requested to take such jobs in order to continue to receive their additional unemployment compensation, and possibly health benefits, but could return to their desired employment status when further jobs become available. Historically, this concept of public work programs was very effective in the U.S. following the Great Depression in the 1930's under various programs begun by President Franklin D. Roosevelt, including the Works Progress Administration and the Civilian Conservation Corps, and we are still benefiting from these programs in terms of our National Parks, Post Offices, conservation, etc.

Providing government-supported employment and education to returning servicemen from the Iraq and Afghanistan who are unable to obtain work on their own should also be seriously considered. Government assistance in obtaining further education for long-term unemployed workers in areas of future industrial development would also be helpful in enhancing future jobs in America, making our citizens more competitive on the world market, and using public funds more effectively than is currently the case. We believe that t would make sense to regard the U.S. Federal government as the employer of last resort.

Eric W. Fonkalsrud is Professor Emeritus of Surgery at UCLA and Michael D. Intriligator is Professor Emeritus of Economics, Political Science, and Public Policy at UCLA.

 
 
 
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ThePeacemakers
Concerned Citizen
02:13 PM on 07/06/2010
It would be great if we could start higher education for all military personnel BEFORE sending them to other countries.
11:16 AM on 07/06/2010
How is it not considered discrimination to refuse to hire people based on the length of their unemployment? I guess I understand in the top echelons of the technology field, advances might blow past the unemployed... but there are plenty of people in other fields who could easily pick right back up after a year or more off with a small amount of OJT.
06:48 AM on 07/06/2010
The gov't used to run the CETA program years ago.

They were directly hired by the gov't to improve communities. This
sounds like what the author is alluding too. It is a good idea, I
hope it can be implemented again.
11:34 AM on 07/05/2010
Train people for jobs-what jobs? Immigrants with work VISAs are still coming to our country getting jobs that Americans should get. Wasn't it Bill Gates that wanted even more work VISA's to be issued by the Govt. for even more immigrants to come over?
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jeffrey678
You don't happen to make it. You make it happen.
09:19 AM on 07/05/2010
Read the last paragraph. They are worried about another Timothy McVeigh. How many unemployed angry veterans do we have in this country NOW ?
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HUFFPOST SUPER USER
DebtNavigation
Attorney and Author
09:16 AM on 07/05/2010
If the federal government doesn't get its act together with respect to the unemployed (especially those returning from Iraq or Afghanistan), they will find the problem on their doorsteps in the form of a modern-day "bonus army". Their choice.
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HUFFPOST SUPER USER
Skeptical Patriot
04:24 AM on 07/05/2010
Rather than spend the money on an indeterminate benefit, a direct subsidy for a small businesses to hire equal to the unemployment benefit. Small business would have to bear a minimum of 25% of costs and any benefits and only for new jobs.
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HUFFPOST SUPER USER
dsws
No owning ideas. Limit only commercial use.
04:29 PM on 07/05/2010
That sounds better than just leaving people on unemployment, but it would mostly subsidize new jobs that were going to be created anyway. My suggestion is to keep paying long-term-unemployed people the same amount as they get as unemployment benefits, but pair them up more or less randomly with firms that already employ people. The employer has to take the worker or pay a penalty; the worker has to go to work there or lose part of their unemployment benefits.
09:19 PM on 07/04/2010
The alternative is easy:

Save money, cut the deficit, employ everyone, cut energy dependence:

Immediately order energy retrofits for all gov buildings.

Rooftop PV Solar, Offshore wind, and Waste Bio char, can supply the worlds energy and fuel needs: cleanly, safely, Forever, within 12 years and cheaper in the long run 2-6 cents now, and 26$ per barrel bio oils.

http://www.ecobusinesslinks.com/solar_panels.htm
about 1$ per Wp solar panels, new.

install solar plants for about $1.30 per watt, compared with an industry average of about $1.75, according to Hardy." http://www.bloomberg.com/apps/news?pid=20602099&sid=a7K1FZoNgJ0w

Wind: “between two and six cents today, depending on location.12 Wind power approaches competitiveness with conventional generation at this price point. “

http://www.repp.org/articles/static/1/binaries/wind%20issue%20brief_FINAL.pdf

http://www.css.cornell.edu/faculty/lehmann/publ/BiofBioproBioref%203,%20547-562,%202009%20Laird.pdf

26$ per barrel bio oil from waste bio char.
02:32 PM on 07/04/2010
Is this a Catch-22 scenario: Assume a majority of the unemployed want to work, even if it was outside their field of expertise and that time outside their profession means that they loose skills that will make them un-marketable if their profession starts hiring. So the answer is re-education, but we are seeing that most states are reducing funds to colleges / universities and eliminating teaching jobs, so there are fewer classes. Now to make up the difference, colleges are raising tuition rates. In order to go back to school, one has to be elgible for a loan, but without work / job, no one will qualify for a loan.

One has to wonder if this will turn our country into a 2 class society: Upper and Lower? As the number of manufacturing jobs are becoming smaller, that leaves service jobs. But if fewer and fewer will be able to pay for these services, then what?
04:02 AM on 07/05/2010
I'm thinking after we degenerate down beyond 2nd class society that we will then be on par with third world countries (with the exception of a 5% upper class caste) at which time it will be profitable to bring back all the off shored jobs for the slave labor they can find here at the US. Which might be feasible when Republicans once again gain control of the presidency in 2012 (due to a previous ineffectual progressive) at which time the minimum wage rate will be lowered in keeping with the general environment of widespread deflation that will be taking place at that time.

Unless of course there is a meaningful democratic opponent for a presidential primary or a third party that rises up.
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jeffrey678
You don't happen to make it. You make it happen.
08:31 AM on 07/05/2010
You should probably read this so you know what you are talking about next time. No offense.
http://www.miller-mccune.com/science/the-real-science-gap-16191/
02:06 PM on 07/04/2010
soldiers are Americans
if you create a separate nation for them then they are not americans anymore
improve things by all means, for all of us, and they will be leaders among us in our towns
they get VA care, VA benefit as they ought to
01:57 PM on 07/04/2010
Today the suicide rate is high for the middle aged pple
not surprising really, unemployment, high insurance costs, retirement with no money..many already lived thru the 70s recession and lost jobs several times

politicians scare us about abortion, terrorist, death panels...but this doesn't make the news much
07:48 PM on 07/03/2010
Well, it would certainly be better than what we are doing now. Unfortunately, I do not have much faith that anything like this will happen -- period. It seems to me that, since the gulf oil incident began, Obama has retreated farther and farther into a place of limited transparency, openness, or imagination. I don't think even he could muster or conceive genuine hope right now. And the program you are speaking of would, by its nature, need to be hope-inspiring to have any chance.
01:59 PM on 07/04/2010
no one understands BHO
what is wrong?
where's the one we voted for?

somehow the people need to work around gov't if it fails us
either that or somehow try to force gov't to act
would be good discussion...every week good ideas surface here but few are adopted by gov't
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njgal4obama
All others will be towed.
06:34 PM on 07/03/2010
I know it was just mentioned parenthetically, but it kind of weirded me out to see the subject of suicide come up in an article entitled, "An Alternative to Long Term Unemployment Compensation".
06:42 PM on 07/03/2010
I think they were just trying to provide the widest net possible including both suicides and our returning troops and long term unemployed to get action
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06:08 PM on 07/03/2010
I take it you guys are well off enough to where your accountants didn't even need to tell you "the taxpayers just bailed us out."
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Cleo Creech
Atlanta writer, poet, activist.
05:54 PM on 07/03/2010
Doesn't Germany have a program where they actually pay employers to keep employees on the payroll and working - I've always heard their system works pretty well.

I also, keep hearing all this talk of retrain, retrain, retrain, but if you're actively looking for a job, you can't really commit to say six months or even a year of education. What if you end up getting a job in the meantime, plus how can you afford it when you're not working, and finally, you could go to school for a year or so and then STILL not be able to find a job.

Remember when employers used to actually pay employees or give them time off to continue their educuation? It used to actually be a fairly standard benefit to keep your workforce on top of their skills. Now I'm not sure any company does that anymore. So you get in this catch22, you really need to be working to afford to go to school (part-time) yet your employer is going to be threatened if you're studying and asking "don't you want to stay in this job?"