House Approves Bill To Expand Unemployment Entitlements/Make Unemployment Worse
Sigh…
NEW YORK (CNNMoney.com) – More than a million people could receive an additional 13 weeks of unemployment benefits under a bill approved by the House on Tuesday.
The bill extends benefits for those living in states with jobless rates higher than 8.5%. Some 27 states, plus the District of Columbia and Puerto Rico, fall into this category. The national unemployment rate hit 9.7% in August, the highest in 26 years.
The problem with expanding unemployment entitlements is that it makes it easier to be unemployed. As long as there is a cushy government “safety net” to fall back on a lot of people who are out of work have no impetus to find work again. So not only do these expanded entitlements represent an additional burden to the individuals and businesses who we want to be creating jobs, we’re making it easier for the people we want to go back to work to stay unemployed.
And you don’t have to take my word for it. The Institute for the Study of Labor in Bonn, Germany (hardly a bastion of right-wing conservative thought) concluded in a study in 2008:
The evidence suggests that benefit generosity increases unemployment. We view this evidence as fairly robust since the estimates are similar across alternative specifications. The magnitudes involved are rather substantial and appear to be relatively high compared to estimates available elsewhere in the literature.
Expanding unemployment benefits expands unemployment. There is no denying this.
What Democrats are trying to do will make things worse.



