Does unemployment insurance (UI) incentivise unemployment?

[Grave_n_idle]

Maybe then we will all be libertarians.

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

[Neo Art]

The other "side" of things sees the opposite effect of what's going on. That if a job is offered at $10 an hour, that's what the pay SHOULD BE, regardless of what it is. That the "job creators" are bound by the flow of the free market, and if a job is paying 10 dollars an hour, then that's what the job should pay, regardless of what you think it should pay or what it paid in the past. That employer are merely agents of hte market, and allowing ANY ability for hte worker to reject that $10 an hour is harmful to the free market, not helpful. That wages will set optimally, because that's what the free market will do, if we let it. Unemployment, however, by allowing a disproportionate influence to the worker, can allow them to disrupt free market equilibrium by letting the government prop up their non efficient demands.

The temporarily unemployed will do just fine if forced to function under merit within a free, voluntary and peaceful society in which govt. only role is to protect life, liberty, private property and enforce legal contracts impartially.

. . .

In sum, the free market isn't perfect -- but part of its strength is that it is dynamic and always competitive -- hence resources can move from heretofore unproductive and passe uses to emerging resources that heretofore were lacking.

....holy shit. I mean, usually they're more obtuse about it. I...I...I don't really know what to do when someone just comes out and SAYS it like that.

[Cannot think of a name]

I feel like this is what it was like to find a coelacanth.

There are reasons to criticize unemployment insurance. In fact, I would argue against a permanent move to European style benefits because of the incentives to remain unemployed.

But I'm talking about the US, not Europe.

Here's the problem I have with that and I'll address you instead of the OP for obvious reasons.

First, let me grant that this is partially anecdotal.

What this conceit relies on is that there are jobs to take, and the people on unemployment are simply not taking them. And even so, that we're focusing on only one reason that they're not taking them: They do not pay enough.

But while there are a ton of jobs, effectively, I'm looking at every day, only a small fraction of the listings every day are jobs I in any way qualify for, and of the ones that I do qualify for only a portion of those are actually viable in that I have a required element (reliable car, piece of tech, whatever) or I'm close enough to the job, etc.

And I'm not talking about limiting selections to jobs in my field or close to my original salary (which in my case was low to begin with, so that's not much of a barrier).

Even granting that parenthetical, I have not (in this case supporting your premise) restricted my job search to a wage floor...with a graduate degree and career experience I'm still applying to burrito shops and oil change stations and indoor go kart tracks as a concession monkey. That latter job, the indoor kart track advertising what was essentially a minimum wage job, they listed four positions and thought they'd get maybe 50 applicants. They got over 400 and interviews took all day. People in suits, with degrees, people who had respectable jobs applying for one of the four positions pushing the electric karts out on the track and warming up shitty pizza for patrons. I've applied to be a night stocker at toy stores...there aren't jobs where I go "no," well, except sign waver.

The people filling these jobs, the ones who view my resume and still interview me, every single one of them has focused on the same concern, that the job they're offering is not as 'sexy' as the one I've been doing and that as soon as opportunities open back up in my field I will be out the door faster than the little dust cloud in my shape will be.

Which is true. But I still need the job now.

So while we, including you, have argued that UI helps people hold out for optimal employment, I would also argue that it's not alone. I find myself not including my educational background when I can avoid it now, trying to figure out a way to not make my freelance period not that lucrative looking while not making it look like additional unemployment time just so these lower wage jobs I'm supposedly disincentivized to look for (well, not according to the premise, I do not receive unemployment) will actually hire me.

[Neo Art]

There are reasons to criticize unemployment insurance. In fact, I would argue against a permanent move to European style benefits because of the incentives to remain unemployed.

But I'm talking about the US, not Europe.

Here's the problem I have with that and I'll address you instead of the OP for obvious reasons.

First, let me grant that this is partially anecdotal.

What this conceit relies on is that there are jobs to take, and the people on unemployment are simply not taking them. And even so, that we're focusing on only one reason that they're not taking them: They do not pay enough.

But while there are a ton of jobs, effectively, I'm looking at every day, only a small fraction of the listings every day are jobs I in any way qualify for, and of the ones that I do qualify for only a portion of those are actually viable in that I have a required element (reliable car, piece of tech, whatever) or I'm close enough to the job, etc.

And I'm not talking about limiting selections to jobs in my field or close to my original salary (which in my case was low to begin with, so that's not much of a barrier).

Even granting that parenthetical, I have not (in this case supporting your premise) restricted my job search to a wage floor...with a graduate degree and career experience I'm still applying to burrito shops and oil change stations and indoor go kart tracks as a concession monkey. That latter job, the indoor kart track advertising what was essentially a minimum wage job, they listed four positions and thought they'd get maybe 50 applicants. They got over 400 and interviews took all day. People in suits, with degrees, people who had respectable jobs applying for one of the four positions pushing the electric karts out on the track and warming up shitty pizza for patrons. I've applied to be a night stocker at toy stores...there aren't jobs where I go "no," well, except sign waver.

The people filling these jobs, the ones who view my resume and still interview me, every single one of them has focused on the same concern, that the job they're offering is not as 'sexy' as the one I've been doing and that as soon as opportunities open back up in my field I will be out the door faster than the little dust cloud in my shape will be.

Which is true. But I still need the job now.

So while we, including you, have argued that UI helps people hold out for optimal employment, I would also argue that it's not alone. I find myself not including my educational background when I can avoid it now, trying to figure out a way to not make my freelance period not that lucrative looking while not making it look like additional unemployment time just so these lower wage jobs I'm supposedly disincentivized to look for (well, not according to the premise, I do not receive unemployment) will actually hire me.

And that's one really big problem with the current state of the economic situation. The other really big problem, as I mentioned before. Let's say you, with your graduate degree, or one of those guys in suits with strong work history, DOES get the job setting up go karts and warming pizza, because, fuck it, that's all there is.

What about the guy who setting up go karts and warming pizza was the best he was ever gonna get?

What happens to him now?

As I said, if you REALLY want to make this about economics, if you REALLY want to bring this down to bare bones dollars and cents, it's a fuck load cheaper to temporarily help me (or you), for a little while, until we're back on our feet, than help him, for the rest of his life.

[Regnum Dominae]

Maybe then we will all be libertarians.

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

What? How is liberty intrinsically evil?

[Caninope]

*snip*

Well, before I say anything else, best of luck in finding a well paying job that applies to your skill set CTOAN.

Secondly, I'm not really that opposed to current unemployment benefits in the state of the current economy. I'm opposed to current unemployment benefits if the American economy were to mirror the growth of the 1990s (I'd also advocate a government surplus, should our economy mirror the growth of the 1990s).

[The Truth and Light]

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

What? How is liberty intrinsically evil?

Lol liberty

[Neo Art]

*snip*

Well, before I say anything else, best of luck in finding a well paying job that applies to your skill set CTOAN.

Secondly, I'm not really that opposed to current unemployment benefits in the state of the current economy. I'm opposed to current unemployment benefits if the American economy were to mirror the growth of the 1990s (I'd also advocate a government surplus, should our economy mirror the growth of the 1990s).

They literally CAN NOT be.

No, literally, they can not. It's physically impossible.

[The Black Forrest]

Maybe then we will all be libertarians.

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

Anecdotally speaking of the ones I personally know; I agree with that statement.

[Condunum]

ITT, OP displays usually lack of understanding of reality, everyone tried to explain it to him.

[Desperate Measures]

I'm starting to feel like I owe this thread tuition money.

[Silent Majority]

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

What? How is liberty intrinsically evil?

It's not, but Right-wing libertarians confuse the idea of being able to do what ever the hell you want, with liberty

[Avenio]

What? How is liberty intrinsically evil?

The freedom to exploit and enslave others is not truly freedom.

[Grave_n_idle]

Never going to happen. Libertarianism is morally bankrupt, and an intrinsically evil ideology.

What? How is liberty intrinsically evil?

Even Nazis believed they were doing what was for the greater good. Libertarianism is entirely selfish and self-serving. It's the most evil ideology.

[Caninope]

Well, before I say anything else, best of luck in finding a well paying job that applies to your skill set CTOAN.

Secondly, I'm not really that opposed to current unemployment benefits in the state of the current economy. I'm opposed to current unemployment benefits if the American economy were to mirror the growth of the 1990s (I'd also advocate a government surplus, should our economy mirror the growth of the 1990s).

They literally CAN NOT be.

No, literally, they can not. It's physically impossible.

I'm not understanding what you're saying.

If you saying that economic growth cannot mirror the 1990s, I'd disagree. The economy under Clinton was drove by a massive increase in productivity originating in the increase penetration of computers and the Internet in our daily lives. While it seems impossible that the computer revolution will further expand productivity in the same way it did in the 1990s, that doesn't mean there cannot be another innovation that does the same thing.

[Neo Art]

I'm starting to feel like I owe this thread tuition money.

I'm sorry if I've gone a little long winded, but, well, fuck, this shit is what I do

[The Truth and Light]

I'm starting to feel like I owe this thread tuition money.

Right? Like I thought about copying some of this stuff onto my blog, but I thought, nah better not plagiarize.

[Ashmoria]

Why do you hate the free market fairies and the charity fairies?

A logical rebut to any progressive who believes that govt. can satisfy human needs and wants in an economically sustainable matter is debunked with the following challenge:

If govt., pols, and bureaucrats are more effective at allocating economic resources -- then why do they require private sector wealth
seized at the point of a gun to fund their schemes?

For example, why not just compete with free market firms on a level playing field without using coercion?

Simple question, no suitable answer from progressives, except that their politicians of choice have formed majority coalitions criminal enterprises with equally corrupt and self-serving cronies in the private sector (Wall Street, big oil, environmentalists, big unions, big pharma, etc.) to extort the fair gotten wealth of private citizens in private exchanges that have nothing to do with the crooks in Washington and the lobbyists that support them.

Moreover, they seal the deal by forming vast coercive and dysfunctional monopolies in education, health care, transportation, retirement, etc. in which competition from private sector firms is denied (for obvious reasons).

there are no level playing fields in a free market.

[Desperate Measures]

I'm starting to feel like I owe this thread tuition money.

I'm sorry if I've gone a little long winded, but, well, fuck, this shit is what I do

No, it's awesome.

[Neo Art]

They literally CAN NOT be.

No, literally, they can not. It's physically impossible.

I'm not understanding what you're saying.

If you saying that economic growth cannot mirror the 1990s, I'd disagree. The economy under Clinton was drove by a massive increase in productivity originating in the increase penetration of computers and the Internet in our daily lives. While it seems impossible that the computer revolution will further expand productivity in the same way it did in the 1990s, that doesn't mean there cannot be another innovation that does the same thing.

No, I'm saying the current unemployment benefits could not exist if the economy was like it was in the 90s.

[Neo Art]

I'm starting to feel like I owe this thread tuition money.

Right? Like I thought about copying some of this stuff onto my blog, but I thought, nah better not plagiarize.

If that includes anything I've written, generally feel free (although please take my post AFTER I realized I said "company" and meant "country" and edited appropriately)

[Vazdania]

The empirical research:

The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications.

Higher IU benefits are found to have a strong negative effect on the probability of leaving unemployment. However, the probability of leaving unemployment rises dramatically just prior to when benefits lapse.

I find that UI benefit extensions have raised the male unemployment rate by around 1.2 percentage points.

We calculate that, in the absence of extended benefits, the unemployment rate would have been about 0.4 percentage point lower at the end of 2009, or about 9.6% rather than 10.0%.

[url=http://ftp.iza.org/dp3667.pdf] across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits

First, I find that increases in benefits have much larger effects on durations for liquidity constrained households. Second, lump-sum severance payments increase durations substantially among constrained households.

And this one is hilarious because it is from Obama’s former economic advisor Larry Summers. government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work and if you have read this far, give yourself a sheckel for not being a progressive drone who is too closed minded to read research undermining their worldview. Each unemployed person has a “reservation wage”—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person to remain unemployed longer.

Of course, any logical and rational person knows that if you subsidize something -- you get more of it.

And if you tax something -- you get less of it.

Hence, it doesn't make much sense that govt. should tax the very firms that create jobs in order to incentivise the unemployed not to work.

But peruse the data, research and findings -- let me know what you think.

data

Yes. It does. (Opinion)

[Caninope]

I'm not understanding what you're saying.

If you saying that economic growth cannot mirror the 1990s, I'd disagree. The economy under Clinton was drove by a massive increase in productivity originating in the increase penetration of computers and the Internet in our daily lives. While it seems impossible that the computer revolution will further expand productivity in the same way it did in the 1990s, that doesn't mean there cannot be another innovation that does the same thing.

No, I'm saying the current unemployment benefits could not exist if the economy was like it was in the 90s.

Oh yeah. I'm not disagreeing with you on that point.

I was instead trying to point out that my support for a more expansive unemployment insurance program at this point in time does not translate into my support for such an expansive unemployment insurance program at all points in time.

[The Truth and Light]

Right? Like I thought about copying some of this stuff onto my blog, but I thought, nah better not plagiarize.

If that includes anything I've written, generally feel free (although please take my post AFTER I realized I said "company" and meant "country" and edited appropriately)

Oh my god, thank you! Best anti-conservative arguments in a while.

[Esternial]

In Belgium it might.