For most people the fact that unemployment checks can keep coming for 99 weeks seems to be an absurdly long time. I hear many stories about how ‘someone’ is bilking the system, not looking for work, watching Jerry Springer, basically willing to suck at the public nipple until it runs dry. I agree wholeheartedly that this is happening, but these tales are mainly from those who have managed to hold on to a job through the recession.
I also see instances of unemployed people frustrated, scared and desperate to get a job. These folks are far and away in the overwhelming majority. Living on unemployment checks simply represents a dramatic drop in a person’s lifestyle. It is a major economic step backward. This is at best a short term economic lifeboat, which is what America’s unemployment system is designed to be. There are major economic incentives to find work.
Now congress’ inherent incompetence in running government has set up yet another deadline where extended unemployment benefits are set to expire. Allowing this to happen will hurt the American people, but maybe not in the way you think.
The latest figures have 13.3-Million people unemployed in the country receiving an average benefit of $295 per week. That is about $39-Billion dollars a week that unemployment payments inject into the economy. There are estimates that at least five-million people would lose extended benefits in 2012. This translates to around $1.5-Billion.
Can we afford to take $1.5-Billion out of the economy? I would say not. The loss of this money would increase foreclosures, aggravating an already poor housing market, and generally decrease spending. We need economic activity to spur growth, business confidence and ultimately hiring.
It is time to start thinking of unemployment payments as more than a safety net for those out of work, more importantly it is a generator of continued economic activity by a segment of our population that would otherwise serve as an impediment to our economy’s return to prosperity. That is something in which we all have a stake.