Wednesday, September 08, 2010

Do Unemployment Checks Keep the Jobless at Home?

From CNNMoney.com:

Does allowing the jobless to get nearly two-years of unemployment checks give them an incentive to not work?

When Congress debated whether to extend unemployment to a record 99 weeks, some Republicans said that the unemployed are staying home collecting benefits when they could otherwise be working.

"[An unemployment extension] doesn't create new jobs. In fact, if anything, continuing to pay people unemployment compensation is a disincentive for them to seek new work," Jon Kyl, R-Ariz., argued during Senate debate in March.

And with the current extended benefits due to expire soon after November's mid-term elections, that argument seem to be gaining some traction.

The extension of benefits "is almost surely the culprit" behind sky-high unemployment, argued Robert Barro, Harvard University economics professor, in a recent Wall Street Journal column.