Does unemployment insurance (UI) incentivise unemployment?

[SaintB]

<suppresses rant>

yeah.

I mean, again, the problem is, the wording is wrong, UI doesn't incentivise "UNEMPLOYMENT" because unemployment is the state of being able, available, and actively seeking employment but unable to obtain suitable work.

It doesn't.

Virtually nobody on UI when offered a suitable job turns it down. And, in fact, doing so is grounds for revocation of unemployment benefits.

People do turn down unsuitable work. And that's fine. We don't want people doing jobs that are below them. All it does is create downward pressures.

I would take a job that is below me, or above me if I could reach it, or even one right next to me... even if I had unemployment.

Being on unemployment, or welfare, and similar things is something I find quite embarrassing and difficult to handle. People don't realize the kind of scrutiny you are under sometimes when partaking of those kind of programs either.

[Choronzon]

"Some opponents of providing relief to unemployed families have been making the fallacious claim that unemployment benefits are a cause of the unemployment we are facing today. Some of them have even taken an article I wrote two decades ago, under different economic circumstances, and used excerpts out of context to suggest that I share their view.

This is a misreading both of my research and of the economic situation today."
Lawrence H. Summers
http://www.huffingtonpost.com/lawrence- ... 45666.html

Amusingly, Summers was against UI before he was for it ??!!!

This is typical of politically motivated self-serving elites who change positions based on the political winds.

Enjoy.

So lets just discount Summer's own words and focus on what others think he meant.

Sounds like the right wing.

[Neo Art]

well yeah but it also has the benefit (or would have without UI) of encouraging the accountant to work for much less. an accountant who is reduced to stocking shelves at walmart for minimum wage for a few months will be willing to take an accounting job for half of what he was getting before because it is still far more than he is making at walmart.

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

[Obamacult]

<suppresses rant>

yeah.

I mean, again, the problem is, the wording is wrong, UI doesn't incentivise "UNEMPLOYMENT" because unemployment is the state of being able, available, and actively seeking employment but unable to obtain suitable work.

It doesn't.

Virtually nobody on UI when offered a suitable job turns it down. And, in fact, doing so is grounds for revocation of unemployment benefits.

People do turn down unsuitable work. And that's fine. We don't want people doing jobs that are below them. All it does is create downward pressures.

Bullshit.

You didn't read the research did you?

A recurring current within much of the research (either for or against UI) is the increased likelihood that those receiving benefits will more aggressively seek and find employment the closer the time benefits expire.

That sounds logical, and it is, but why I am convinced that facts and logic don't matter to certain ideologues?

[Ashmoria]

well yeah but it also has the benefit (or would have without UI) of encouraging the accountant to work for much less. an accountant who is reduced to stocking shelves at walmart for minimum wage for a few months will be willing to take an accounting job for half of what he was getting before because it is still far more than he is making at walmart.

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

its already happened in construction where the layoffs started early and have persisted for years longer than UI lasts. skilled construction workers (in non-government non-union jobs) are commonly working for $10/hour less than they were paid before the bubble burst.

[Choronzon]

why I am convinced that facts and logic don't matter to certain ideologues?

I love you man

[Neo Art]

I mean, again, the problem is, the wording is wrong, UI doesn't incentivise "UNEMPLOYMENT" because unemployment is the state of being able, available, and actively seeking employment but unable to obtain suitable work.

It doesn't.

Virtually nobody on UI when offered a suitable job turns it down. And, in fact, doing so is grounds for revocation of unemployment benefits.

People do turn down unsuitable work. And that's fine. We don't want people doing jobs that are below them. All it does is create downward pressures.

I would take a job that is below me, or above me if I could reach it, or even one right next to me... even if I had unemployment.

I mean, there is some truth to the idea that people have a break away point, and that unemployment increases what htey'd take. And it's true. Were I to lose my job, what I'd be willing to take with UI is drastically different than what I"d be willing to take without UI. Because with UI I know I can keep a roof and food, and wait a little while.

Without UI I'll take anything I can get, to avoid being rendered homeless.

And that's the whole point, we don't WANT lawyers, and doctors, and accountants, and engineers, and architechs, and IT specialists to be forced to stock shelves at walmart. It's bad for the economy as a whole. One, because it harms wages in the real sense, and two, what hte fuck are we going to do with all the other people who would otherwise be stocking shelves at wal mart?

Because at the end of the day, if there's more people than jobs, someone's going without a check.

And who do you want that to be? Me, who's educated and can probably land on his feet if given enough time? Or the highschool drop out with mild mental retardation who has no other option because I just took the only job he could do?

Because, I promise you, if you're unwilling to let either of us starve, then you're a lot better of supporting me for a little while, than him forever.

Which, again, is the point I made, the right wing's position has never been about being unwilling to let people starve. In fact, beyond indifference, I would go so far as to say that one of the central tenants of the right wing is "poor people should starve, they don't deserve to live, and we're going to do everything we can to make sure that happens"

How else do you explain their policies?

[Neo Art]

Bullshit.

Fun fact. Did you know almost a quarter of OC's posts contain this word?

[Xsyne]

I'm not really familiar with this stuff, so is unemployment insurance just a name or is it insurance?

Because if it's insurance I have a well-crafted rebuttal that treats the question with all the respect that it deserves.

[Neo Art]

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

its already happened in construction where the layoffs started early and have persisted for years longer than UI lasts. skilled construction workers (in non-government non-union jobs) are commonly working for $10/hour less than they were paid before the bubble burst.

Sure, it doesn't stop the dirty tricks from happening when employers know that it'll take longer to get a suitable offer than the benefits last.

[Neo Art]

I'm not really familiar with this stuff, so is unemployment insurance just a name or is it insurance?

Because if it's insurance I have a well-crafted rebuttal that treats the question with all the respect that it deserves.

it's...complicated. It's insurance, sort of, but you have to understand exactly who's insured, and who pays the rates.

[Obamacult]

well yeah but it also has the benefit (or would have without UI) of encouraging the accountant to work for much less. an accountant who is reduced to stocking shelves at walmart for minimum wage for a few months will be willing to take an accounting job for half of what he was getting before because it is still far more than he is making at walmart.

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

This is a typical example of the way progressives conduct business.

They call it politics, but free and peaceful people call it extortion.

For example, progressive can't get what they want in a free, competitive, voluntary and peaceful society so.....

they form a duopoly with govt. to coercive others to bend to their will.

In this case, politicians buy votes from lower income voters in a quid pro quo for preferential labor regulations and UI handouts taken from taxpayers (libertarian and conservative voters). Essentially, this is tyranny of the majority -- you buy votes for handouts gained at the point of a gun.

The problem is when this destructive scheme disincentivises merit and incentivises sloth -- thereby creating a dysfunctional society in economic decline.

Sound familiar?

To quote Maggie, "socialism is great until you run out of other people's money"

[Xsyne]

I'm not really familiar with this stuff, so is unemployment insurance just a name or is it insurance?

Because if it's insurance I have a well-crafted rebuttal that treats the question with all the respect that it deserves.

it's...complicated. It's insurance, sort of, but you have to understand exactly who's insured, and who pays the rates.

I assume "does life insurance incentivize death?" would not be an actual counterpoint then.

By the way, anyone else notice the British spelling in the topic title? Why does Obamacult hate America?

[Desperate Measures]

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

This is a typical example of the way progressives conduct business.

They call it politics, but free and peaceful people call it extortion.

For example, progressive can't get what they want in a free, competitive, voluntary and peaceful society so.....

they form a duopoly with govt. to coercive others to bend to their will.

In this case, politicians buy votes from lower income voters in a quid pro quo for preferential labor regulations and UI handouts taken from taxpayers (libertarian and conservative voters). Essentially, this is tyranny of the majority -- you buy votes for handouts gained at the point of a gun.

The problem is when this destructive scheme disincentivises merit and incentivises sloth -- thereby creating a dysfunctional society in economic decline.

Sound familiar?

To quote Maggie, "socialism is great until you run out of other people's money"

That bolded part sure seems like some Grade A bullshit.

[Ashmoria]

How else do you explain their policies?

I assume that their policies reflect their billionaire master's opinions.

the 1% right winger don't want to pay tax in the US and don't care that gutting the US economy means that they make less money in the US. (less money in the economy means less money they can earn in that economy). they think they are going to make it up in china and india. a burgeoning middle class in countries of over 1billion people means lots and lots of business. fuck the US.

[SaintB]

I would take a job that is below me, or above me if I could reach it, or even one right next to me... even if I had unemployment.

I mean, there is some truth to the idea that people have a break away point, and that unemployment increases what htey'd take. And it's true. Were I to lose my job, what I'd be willing to take with UI is drastically different than what I"d be willing to take without UI. Because with UI I know I can keep a roof and food, and wait a little while.

Without UI I'll take anything I can get, to avoid being rendered homeless.

And that's the whole point, we don't WANT lawyers, and doctors, and accountants, and engineers, and architechs, and IT specialists to be forced to stock shelves at walmart. It's bad for the economy as a whole. One, because it harms wages in the real sense, and two, what hte fuck are we going to do with all the other people who would otherwise be stocking shelves at wal mart?

Because at the end of the day, if there's more people than jobs, someone's going without a check.

And who do you want that to be? Me, who's educated and can probably land on his feet if given enough time? Or the highschool drop out with mild mental retardation who has no other option because I just took the only job he could do?

Because, I promise you, if you're unwilling to let either of us starve, then you're a lot better of supporting me for a little while, than him forever.

Which, again, is the point I made, the right wing's position has never been about being unwilling to let people starve. In fact, beyond indifference, I would go so far as to say that one of the central tenants of the right wing is "poor people should starve, they don't deserve to live, and we're going to do everything we can to make sure that happens"

How else do you explain their policies?

Its either greed, indifference, or a lack of understanding of how economies work.

[Xsyne]

I mean, there is some truth to the idea that people have a break away point, and that unemployment increases what htey'd take. And it's true. Were I to lose my job, what I'd be willing to take with UI is drastically different than what I"d be willing to take without UI. Because with UI I know I can keep a roof and food, and wait a little while.

Without UI I'll take anything I can get, to avoid being rendered homeless.

And that's the whole point, we don't WANT lawyers, and doctors, and accountants, and engineers, and architechs, and IT specialists to be forced to stock shelves at walmart. It's bad for the economy as a whole. One, because it harms wages in the real sense, and two, what hte fuck are we going to do with all the other people who would otherwise be stocking shelves at wal mart?

Because at the end of the day, if there's more people than jobs, someone's going without a check.

And who do you want that to be? Me, who's educated and can probably land on his feet if given enough time? Or the highschool drop out with mild mental retardation who has no other option because I just took the only job he could do?

Because, I promise you, if you're unwilling to let either of us starve, then you're a lot better of supporting me for a little while, than him forever.

Which, again, is the point I made, the right wing's position has never been about being unwilling to let people starve. In fact, beyond indifference, I would go so far as to say that one of the central tenants of the right wing is "poor people should starve, they don't deserve to live, and we're going to do everything we can to make sure that happens"

How else do you explain their policies?

Its either greed, indifference, or a lack of understanding of how economies work.

"Or"?

[Souseiseki]

To quote Maggie, "socialism is great until you run out of other people's money"

Her name is Margaret, thanks!

[Cannot think of a name]

The empirical research:

data

Experience has taught me that I cannot expect a reciprocal level of fair brokerage to warrant going through the sources in detail in this particular instance, but I will give an over view of the reading so far.

First of all is to acknowledge the smoke screen. Three of these are studies and equal over 200 to 300 page studies. I am not reading that much and I suspect neither has the OP. What is expected is that we read the abstract and take it at face value as the OP has or be accused of being 'afraid of the facts.' While not being a particular honest tactic, it is effective on open forums such as these. I in fact expect to be lambasted for even suggesting such as a way to dodge facts.

From there the argument is nothing more than 'Oh yeah?' 'Yeah!'. Rather than participate, search for Rabbit Seasonings, at least that one is funny.

The last two or three, I lost a little track, are actually self referential. That is, the quoted relevant part deal with the same study that was so delightfully included because of the author being an Obama and Clinton appointee.

But the real delight is that the study does not actually suggest the OP's premise, the underlying one anyway. What it suggests, which will become a theme, is that unemployment is optimal just where it is. From the OPs sources we learn that unemployment insurance is about half of the wages the person was receiving, and the OP's prize study shows that this is, in fact, optimal. The sticking point, the smoking gun that the OP thinks he's found is that UI allows people to hold out for jobs closer to the wage they left.

Let's say that again: Unemployment insurance allows people to hold out for a wage closer to the one they left.

Read that again. That's right. The OP has presented us with a 'smoking gun' study to demonstrate to us that Unemployment Insurance functions as intended. That unemployment is kept from severely suppressing wages.

Wow. Well, we must act immediately on this entirely intended consequence. What kind of monster would want that?

The source that doesn't circle around to these studies that show that unemployment insurance does what it's supposed to is one that presents a fantasy case instead:

Consider, for example, an unemployed person who is accustomed to making $15.00 an hour. On unemployment insurance this person receives about 55 percent of normal earnings, or $8.25 per lost work hour. If that person is in a 15 percent federal tax bracket and a 3 percent state tax bracket, he or she pays $1.49 in taxes per hour not worked and nets $6.76 per hour after taxes as compensation for not working. If that person took a job that paid $15.00 per hour, governments would take 18 percent for income taxes and 7.65 percent for Social Security taxes, netting him or her $11.15 per hour of work. Comparing the two payments, this person may decide that an hour of leisure is worth more than the extra $4.39 the job would pay. If so, this means that the unemployment insurance raises the person’s reservation wage to above $15.00 per hour.

This apparently assumes that everyone lives at 45% of their means and when provided with a few months of that wage, well...party time.

Unlike the studies included, this is just the reasoning the author comes up with. You know, like someone trying to guess why Bronies like MLP or rabid Windows users prescribing motives to Apple users.

And about as useful.

So, thank you OP, for confirming that UI is an essential program that is apparently operated at an optimal level.

[Neo Art]

Sound familiar?

Sure, it's the same shit you've been posting for months now.

I kinda hoped you'd outgrow it, but, oh well. Maybe next year.

[Xsyne]

To quote Maggie, "socialism is great until you run out of other people's money"

When Brits call Thatcher "Britain's Reagan" it's not a compliment.

[Neo Art]

Read that again. That's right. The OP has presented us with a 'smoking gun' study to demonstrate to us that Unemployment Insurance functions as intended. That unemployment is kept from severely suppressing wages.

Hi there Page Two. I'm Page One. Can we be friends?

[Ashmoria]

I mean, yeah, it's all part and parcel of the same idea. It prevents downward pressure in terms of employment, and real wages, and both. It also prevents employers from pulling dirty tricks like "we'll lay you all off and hire you back as 1099 without any benefits and at half pay" if the answer is "nah, you laid us off, we'll go collect unemployment and you can pay for that, until you pony up a suitable job offer"

This is a typical example of the way progressives conduct business.

They call it politics, but free and peaceful people call it extortion.

For example, progressive can't get what they want in a free, competitive, voluntary and peaceful society so.....

they form a duopoly with govt. to coercive others to bend to their will.

In this case, politicians buy votes from lower income voters in a quid pro quo for preferential labor regulations and UI handouts taken from taxpayers (libertarian and conservative voters). Essentially, this is tyranny of the majority -- you buy votes for handouts gained at the point of a gun.

The problem is when this destructive scheme disincentivises merit and incentivises sloth -- thereby creating a dysfunctional society in economic decline.

Sound familiar?

To quote Maggie, "socialism is great until you run out of other people's money"

oddly enough I would much rather live in a country where votes are "bought" by making sure that we have a strong prosperous middle class than a country were votes are "bought" by making sure that the 1% pay low taxes.

[Vetalia]

I'm not really familiar with this stuff, so is unemployment insurance just a name or is it insurance?

Because if it's insurance I have a well-crafted rebuttal that treats the question with all the respect that it deserves.

In the US, employers pay federal/state unemployment taxes on a portion of their gross wages that funds unemployment benefits for workers. The state rates usually vary from employer to employer; IIRC, Ohio's state unemployment tax rate is based on employee turnover so employers that laid off/terminated more workers or who have high turnover rates relative to the average for their industry pay a higher rate into the fund and vice versa.

Also, for some states they pay a higher federal rate because their state insurance funds borrowed money from the federal government to fund state unemployment compensation (usually the states that suffered the heaviest job losses during the recession).

[The Truth and Light]

To quote Maggie, "socialism is great until you run out of other people's money"

When Brits call Thatcher "Britain's Reagan" it's not a compliment.

Margaret Thatcher, with all due respect, was a fucking nut.