What length unemployment benefits help the most?

Sometimes government policies that are supposed to help people actually hurt them.

When the American with Disabilities Act was enacted in 1992, the purpose was to benefit people with disabilities. This legislation, though, led to a sharp drop in the employment of disabled workers because it dramatically increased the cost of employing a disabled person. Knowing how to help people is tricky business.

I have great compassion for those in need, so I desperately want to know what works. We do this through research that discovers accurate evidence.

Let’s review recent studies about what helps or hurts people in the area of unemploymentbenefits. The benefits are clearly intended to help people who are unemployed to get through a difficult period of life. Certainly, all Americans support such a notion, but how to best accomplish this assistance gets tricky.

Studies have long found that extending unemployment benefits increases unemploymentbecause it decreases the need to find a job. Some people, however, believe the increase in unemployment is a fair price to pay to help people for longer.

The United States recently conducted a social experiment. For the first time in history, we offered benefits for up to 99 weeks, far longer than at any previous point in American history.

There was also a twist that turned out to be a gold mine for researchers: The end of the 99-week period varied from state to state to measure more directly the impact of that single change. Researchers are now reporting their findings.

First, some long-standing findings, but with more dramatic conclusions — 82 percent of those receiving benefits said they would “search harder and wider for a job” once their benefits ran out; 48 percent said that they “haven’t had to look for work as hard” thanks to unemployment benefits; and 62 percent said that unemployment benefits have allowed them to take time for themselves.

Most people supporting unemployment benefits don’t intend them to be used this way.

New findings from the New York Federal Reserve Bank include “the stimulative effect of higher spending by the unemployed is largely offset by the dramatic negative effect on employment.” In other words, the belief that giving additional unemployment benefits also helps stimulate the economy appears to be false. Secondly, extending the benefit period causes a permanent rise in unemployment — for further proof, see Europe.

Here’s a finding that makes sense, but one I hadn’t thought of before: Increasing the length of benefits causes employers to offer fewer jobs.

The bank concluded, “those receiving unemployment benefits could afford to be more ‘picky’ about what jobs they eventually chose to take, which added to wage pressure. The higher wage pressure caused employers to reduce the number of jobs they offered, thus causing fewer to be employed.”

The most dramatic new finding is that hundreds of thousands have now left the workforce completely because of the extension of benefits. After receiving benefits for 99 weeks that may have totaled more than $20 per hour, including other social services provided, these people just couldn’t bring themselves to work in a job that may pay $15 per hour, even after the unemployment period ended.

The unemployment benefits have skewed their sense of self-worth. These people have now been robbed of the dignity that comes from performing productive work and being a contributing member of society.

As a Christian, I care deeply about helping those in need. It may sound uncaring, but if you Google what a parent should do if an adult child has a baby at an unfortunate time, or runs up large credit card debts, or expects to live at home indefinitely, Dr. Phil and all of the other experts recommend that it is more loving to allow people to experience the consequences of their own situations.

When we don’t do this, we rob them of their dignity. We need to provide an unemployment benefit that allows people to get past the initial blow of being jobless, but that encourages them, lovingly, to get back on their feet, even if it means starting back on a lower rung on the ladder.

Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s