Californians Return to Work as Unemployment Benefits Expire

[longknife]

After the California Employment Development Department made an announcement that federal benefits for as many as 400,000 unemployed Californians could end on December 29, California’s unemployment dropped in October as more Californians looked for -- and found -- work.

According to newly-released numbers, California’s unemployment dropped to 10.1% in October after 45,800 jobs were added to payrolls.

Gee whiz! Do ya think … Oh well, read more @ Californians Return to Work as Unemployment Benefits Expire

 

[Rozman]

After the California Employment Development Department made an announcement that federal benefits for as many as 400,000 unemployed Californians could end on December 29, California’s unemployment dropped in October as more Californians looked for -- and found -- work.

According to newly-released numbers, California’s unemployment dropped to 10.1% in October after 45,800 jobs were added to payrolls.

Gee whiz! Do ya think … Oh well, read more @ Californians Return to Work as Unemployment Benefits Expire

They just sucked every last penny out of those bennies...when they sucked it dry they went back to work it seems...

 

[Politico]

Exactly. Amazing how they managed to find jobs suddenly.

 

[EdwardBaiamonte]

Exactly. Amazing how they managed to find jobs suddenly.

Of course it does!. That is why all states require those who receive unemployment to prove they are looking for work.



Lawrence Summers:

First, government assistance increases the measure of unemployment by prompting people who are not working to claim that they are looking for work even when they are not. The work-registration requirement for welfare recipients, for example, compels people who otherwise would not be considered part of the labor force to register as if they were a part of it. This requirement effectively increases the measure of unemployed in the labor force


The second way government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work. Each unemployed person has a "reservation wage"—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase that reservation wage, causing an unemployed person
to remain unemployed longer.


Unemployment insurance also extends the time a person stays off the job. Clark and I estimated that the existence of unemployment insurance almost doubles the number of unemployment spells lasting more than three months.

Another cause of long-term unemployment is unionization. High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy.

Sherk quotes academic studies by Alan Krueger, the current Assistant Secretary of the Treasury for Economic Policy, and Lawrence Summers, current director of the White House's National Economic Council - both to the effect that unemployment insurance is a disincentive to seek work.

Sherk also quotes from an economics textbook by Nobel economist and liberal columnist Paul Krugman that unemployment insurance "reduces a worker's incentive to quickly find a new job."

Krugman does not hide from the statement.

"Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits are likely to be slightly more choosy about accepting new jobs.


What does textbook economics have to say about this question? Here is a passage from a textbook called "Macroeconomics":
Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job. Generous unemployment benefits in some European countries are widely believed to be one of the main causes of "Eurosclerosis," the persistent high unemployment that affects a number of European countries.



*****great post. I was heartened to hear even Krugman describe Europe's economy as having "Eurosclerous." And to ask, "But who can now use the word socialism with a straight face?" Also, it is true too that an average poor person in America would be Middle Class in Europe and that while Europe has 60-70% of our per capita income it would be far less were it not able to copy or buy the innovative new goods and services being developed by our economy.