According to the Federal Reserve, it's not true that benefits for the unemployed leads to more unemployment. In the words of the government economists:
Our analyses suggest that extended UI benefits account for about 0.4
percentage point of the nearly 6 percentage point increase in the
national unemployment rate over the past few years. It is not
surprising that the disincentive effects of UI [unemployment insurance] would loom small in the
midst of the most severe labor market downturn since the Great
Depression.
No surprise there. The surprise (at least for the underemployed yours truly) is that the Murdoch-ized Wall Street Journal digs out the details of the unemployment numbers. Not only does the business-oriented paper focus on the pain, it explicitly says the unemployment is not the fault of the jobless.
The paper notes the economic crisis of the last few years has generated
an “unprecedented” level of unemployment duration. Those unemployed for
more than six months hit 4.3% in March, “well above” the previous high
of 2.6% in 1983. The economists note that the current situation is all
the more striking because the unemployment rate peak was quite a bit
higher in that downturn, relative to what’s been seen in this episode.
In other words, back in l983, the jobless rate was higher, but the jobs came back faster. But maybe the paper is kind to the jobless, because the underemployed are propping up the economy. Though I must admit, it takes a Ted Rall to see the heroism in my plight:
Kit Stolz 