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发帖数: 29846 | 1 Extended Unemployment Benefits Slow Growth, Hoax on the Working Poor
Reinstating emergency unemployment benefits, as President Obama urges, would
slow growth and impose unconscionable burdens on the working poor.
State governments provide a basic benefit, averaging $300 per week for 26
weeks. During the Great Recession, Washington financed additional benefits
for as long as 99 weeks.
With the recovery in its 55th month, the emergency is over. Another
extension would make long-term benefits de facto permanent and create
another entitlement. Republican leaders are correct to insist Democrats
identify equivalent spending cuts or new sources of revenue.
Advocates argue those benefits provide the strongest economic stimulus,
because the unemployed spend whatever money they receive on necessities.
However, their supporting studies assume other federal programs are not cut
or taxes are not raised to finance benefits.
Cutting other outlays, for example on roads and schools, would have an even
bigger negative impact on GDP and jobs than failing to again extend
unemployment benefits, because some of the latter would not be spent but
rather be used to pay down credit cards and other debt.
Additional taxes to pay for more unemployment benefits would impose a
terrible burden on the working poor--the very folks Obama constantly reminds
need the most help.
Unemployment benefits are financed by federal and state payroll taxes, which
, like the social security tax, cut off when a worker’s wages exceed a cap
established by the various states, according to federal guidelines. The
average limit is about $12,000.
Although these taxes are generally paid by employers, economists argue those
reduce the wages employers can pay low income workers by a similar amount.
Indeed, some of the extended unemployment benefits paid during the recession
were financed by a special federal levy that hit low income workers hardest
of all, making extended benefits a cruel hoax on the working poor.
Unduly long unemployment benefits in an economy the President says is
picking up steam encourages many unemployed to postpone serious employment
searches. From Wall Street to Main Street, white collar professionals have
delayed accepting lower pay and changing occupations by running down savings
and collecting maximum unemployment benefits of about $300 a week.
Most could easily earn multiples of those amounts even by accepting
positions at somewhat lower status than their old jobs. It takes a rather
twisted view of social justice to raise taxes on the working poor to pay
professionals not to work, but that is exactly what federally-financed
extended unemployment benefits do.
A recent study by the non-partisan National Bureau of Economic Research
indicates extended unemployment benefits caused most of the persistently
high unemployment after the Great Recession.
By raising the cost to employers of hiring low wage workers, higher payroll
taxes to finance benefits discourage employers from adding new jobs—
especially in depressed areas. And extended benefits discourages workers
from moving from high unemployment locations—for example coal mining
communities in West Virginia—to more rapidly growing states—Texas and
South Dakota where the oil and gas boom is driving growth.
Like so many of Obama’s well-intentioned policies, emergency unemployment
benefits slow growth, limit job creation and incentives to work among many
well-educated Americans, and place the greatest burdens on the working poor.
Peter Morici is an economist and professor at the University of Maryland
Robert H. Smith School of Business, and a widely published columnist. He
tweets @pmorici1. |
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