Benefits cut...people go get jobs
Published January 3, 2014
by Jim Tynen, Civitas Institute, January 2, 2014.
North Carolina has just run an experiment about what happens when unemployment benefits run out: Many jobless people go get jobs.
The state's unemployment rate has fallen markedly, and this may be linked to the end of extended unemployment benefits, the Charlotte Observer has reported.
Wells Fargo Securities economist Mark Vitner examined the plunge in the state's unemployment rate. North Carolina's unemployment rate has been among the highest in the nation since the Great Recession began. But, the paper reported,
"The state’s unemployment rate started the year as one of the highest in the country but has fallen two percentage points from a year ago to 7.4 percent in November, according to state commerce department data. The state’s unemployment rate is now .4 percentage points higher than the U.S. average, compared with 1.6 percentage points higher in November 2012."
The Washington Post also reported the sharp decline in the jobless rate, from 9.4 in November 2012 to 7.4 in November, adding, "That two-point drop was the steepest decline of any state year over year."
Gee, what could have caused that? I went to some of those Monday protests this summer, and heard speakers bewail the terrible fate of those whose extended unemployment benefits were being cut off. The General Assembly had petitioned the federal government to allow the state to pay lower unemployment benefits for the extended period, only to be rebuffed by the Washington bureaucrats. Facing a budget crunch, lawmakers decided to let the extended benefits expire in July. Left-wingers predicted doom.
Instead, miraculously, the state's unemployment rate has sunk. According to the article, one inference is that unemployment "benefits have two impacts on the labor force: They raise the required wage for someone to take a job, and they keep people seeking jobs because it’s a requirement of receiving benefits." In other words, if you pay people not to work, many will not work — until they can find a great job.
Vitner's study backed up that possibility because the civilian employment in the state climbed by 39,400 over the most recent three months, the newspaper said. In contrast, in the first eight months of the year, employment dropped by 45,100.In other words, give people incentives to stay home, many will stay home. Give them incentives to work, and many more will work. This isn't a knock on people out of work. It is simply to note that people will respond rationally to incentives.
Moreover, our experience could have lessons for the nation as a whole, Vitner wrote, with Congress debating ending extended unemployment benefits: “If Congress does not extend them, the same results seen in North Carolina may begin to show up in the national unemployment figures."
January 3, 2014 at 8:31 am
Rip Arrowood says:
The unemployment rate went down because, when unemployment compensation is cut off, those out-of-work people who were receiving it are no longer listed and accounted for.
Spinning this into - all those people found jobs - is pure deception.
January 3, 2014 at 8:33 am
Jack Dawsey says:
The unemployment benefits only expired about 72-hours ago. Have that many jobs in NC been created in less than 3-days? If so, WOW! We have an Einstein (more than an Einstein) in the People's House in Raleigh.
January 3, 2014 at 10:22 am
Norm Kelly says:
There seems to be some information in this editorial that doesn't seem to have appeared ANYWHERE else. For some reason, that just escapes me, this specific information wasn't made available by the N&D. Could that be because it doesn't fit in with their desire to stir up the lib base to attempt to return their pals to power in Raleigh? No. That couldn't be. The N&D is a NEWS paper. They report news. All news. And the FULL story every time.
'The General Assembly had petitioned the federal government to allow the state to pay lower unemployment benefits'. This specifically means that the REPUBLICANS in control of Raleigh asked for permission to KEEP people on the EXTENDED unemployment benefits RATHER than cutting them off. The response from the LIBS in Washington? Hell no! You MUST pay the full amount or nothing at all.
So, once again, what we have here is a failure of the libs to negotiate, to make concessions. Then the willing accomplices in the press go along with the libs and blame the Republicans for being heartless. (I shouldn't have called them accomplices. Libs, please accept my apologies. I will remember to refer to them as 'the media wing of the Demoncrat party' from here on. Truth in advertising, and all.)
The alternative to cutting people off? Continue to pay them, just let us pay them less because we can't afford to continue to pay what the feds are demanding. The feds responded that THEY/the LIBS in control would rather have these people cut off completely rather than let them get paid, but slightly less. Such caring hearts there in Washington, in the Liberal Establishment. So if what this editorial says is true, then it's NOT the heartless, rich Republicans in Raleigh that caused people to lose their benefits. It's the heartless libs in Washington that caused people to be dropped from the benefits roll. Now I understand why the N&D hasn't publicized this information.
Boosting the economy may help the most people? This statement sounds like it could be that dreaded 'trickle down economics' disaster proposed by the vilified, fascist Reagan guy. It's probably true that providing jobs for people is better for them, better for the economy, better for families, better for the government, than giving people benefits from the government, but it doesn't provide the same benefits. A job allows people to make their own financial & life decisions. It takes power AWAY from the central planners. Therefore, we can safely and accurately conclude that improving the economy is not only NOT in the best interest of the libs, it is also not anything that they have proposed, have on their plan to propose, or even consider as a valid plan when presented by Republicans - either in Raleigh or in the House. Job creation is secondary for libs when compared to benefits creation and extension. Just look at their statements about how much food stamps boost the economy. It's better in their 'minds' to continue to provide the economic benefits of food stamps rather than allow people to find jobs and thereby be able to buy groceries on their own. Power to the LIBS is more important than power to the PEOPLE. Sheeple over people.
January 3, 2014 at 4:02 pm
Jack Dawsey says:
