Obama’s Labor Secretary: If We Don’t Extend Unemployment Entitlements More People Will Be Unemployed
Unemployment benefits are an entitlement which pays workers to be unemployed with taxes collected from employers. It’s a tax on people who create jobs used to pay people to be unemployed.
And, according to Obama’s Labor Secretary Hilda Solis, we have to keep doing that or else the unemployment problem will get worse.
(CNSNews.com) – U.S. Labor Secretary Hilda Solis said Wednesday that failing to extend the length of time that unemployment workers are eligible to receive federal unemployment payments “will mean an increase in the unemployment rate.”
An extension in unemployment benefits that Congress and President Obama enacted a year ago is set to expire at the end of December.
At the same briefing on Capitol Hill, Sen. Jack Reed (D-R.I.), echoing House Minority Whip Steny Hoyer (D-Md.), said that lawmakers may lose their “soul” if they fail to pass legislation to extend unemployment benefits for the long-term jobless.
“Extending unemployment benefits kept 3.2 million Americans out of poverty last year alone, according to the U.S. Census Bureau. A year ago President Barack Obama reached a bi-partisan compromise that kept 7 million Americans from losing these very important benefits,” said Solis.
“If the Republicans do not join hands with us again, it will mean fewer dollars flowing to groceries, to gas stations, to retailers, to businesses, and food on the table for millions and millions of families and their children,” she said. “It will mean that small businesses will close their doors because they won’t be able to meet their payroll. It will mean more layoffs. It will mean an increase in the unemployment rate. And I’m here to tell you that we need to do everything we can to convince members of both houses — and the senate– to do the right thing. It’s the American thing to do. We don’t have any more time to waste.”
So the argument is that unemployed people spend their unemployment benefits on buying goods and services which, in turn, employ other people. Of course, those same unemployment benefits represent money taken from other people who also would have used the money to buy goods and services.
The idea that unemployment benefits are some sort of an economic stimulus is ridiculous.
The truth is that unemployment programs which provide bigger benefits for longer tend to promote higher rates of unemployment. Not only do the more lavish benefits cost more in taxes, but they also remove incentive to get back into the labor market. People who could find a job often delay re-entering the job market because the unemployment benefits.
A safety net is one thing. A hammock is quite another. Longer, more lavish unemployment benefits hurt the economy. The longer, more lavish benefits put in place at the federal level during this “great recession” have helped protract the recession, not helped with it.Tags: hilda solis, jobs, unemployment