Friday, July 02, 2010

Cracking Down On Workers

Sharron Angle, the far-right Republican nominated to square off against Senate Majority Leader Harry Reid in November, had some uncharitable words for the unemployed recently:

You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job, but it doesn't pay as much. And so that's what's happened to us is that we have put in so much entitlement into our government that we really have spoiled our citizenry and said you don't want the jobs that are available.

Roundly criticized, Angle a week later clarified her remark:

I was criticized for saying that Americans won't do certain jobs and the reason that they won't do certain jobs is because they get more pay on unemployment than they can get to work those...those good jobs that are really out there. What has happened is Harry Reid has just extended unemployment and when he did that he not only made it so that people are less employable, but he makes it so that they want to be dependent on the government. This entitlement pays them more than getting a real job.

It might seem a little difficult to run for a U.S. Senate seat by telling Nevadans they are lazy. Rush Limbaugh seemingly is a little more ambivalent, contending "We've got a lot of people who think being an American means being taken care of, but I think a lot of these people on unemployment want to work."

But if Angle's contempt for American workers is more explicit, the rationalization is the same. For Angle, it is that unemployment compensation "makes it so that they want to be dependent on the government"- they're lazy, and it's government that has made them that way. For Limbaugh, it is "policies (of Speaker Pelosi) along with the president are creating circumstances where people who want to work cannot. It's just that simple. Obamaville is all about welfare checks, and Obamaville is the country."

Fortunately, Angle, who says that she would have joined her GOP colleagues in voting against extension of unemployment benefits, and Limbaugh, who claims "taking money away from people who are working and giving it to people who aren't is creating jobs," are both wrong.

David Card, Raj Chetty, and Andrea Webber concluded in a 2007 paper that most people do not wait until their unemployment benefits run out to secure further employment. A 1990 paper, based on 1970s data seemed to indicate otherwise. However, one of the authors, Lawrence Katz, recognized those findings aren't relevant when jobs are less plentiful and stated in 2009 "I strongly favor extensions of UI benefits when the labor market is weak and the ratio of job seekers to job openings is very high."

Katz noted also that extending unemployment benefits can provide a quick, temporary fiscal stimulus. That brings us back to Limbaugh, fantasizing "putting it (money) back in the private sector is not growing the private sector. Taking money away from people who are working and giving it to people who aren't is (sic) creating jobs. Somebody at home getting an unemployment check is not working."

Thankfully, Speaker Pelosi understands what not only labor economists such as Katz but almost all other economists recognize:

....unemployment insurance -- we talk about it as a safety net and the rest -- this is one of the biggest stimuluses (sic) to our economy. Economists will tell you, this money is spent quickly. It injects demand into the economy, and it's job creating. It creates jobs faster than almost any other initiative you can name; because, again, it is money that is needed for families to survive and it is spent. So it has a double benefit. It helps those who have lost their jobs but it also is a job-creator.

So it isn't necessary to attack the likes of Rush Limbaugh and Sharron Angle for looking down on American workers, nor to note that they rationalize their disdain by blaming government for making those workers lazy. They do all that of course, but, additionally, they are simply wrong.

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