Fund Your Utopia Without Me.™

06 December 2013

Pelosi: Dems Might Just Shut Down Government If Unemployment Benefits Aren’t Extended As Part of Budget Deal…

WASHINGTON (AP) — The leader of House Democrats says her rank and file won’t support any year-end budget deal unless it includes plans to extend expiring unemployment benefits for long-term victims of the recession.

Rep. Nancy Pelosi of California made the comment today as senior lawmakers struggled elsewhere in the Capitol to find a compromise that would ease across-the-board cuts in the budget that both parties would like to eliminate.

Majority Republicans in the House have not ruled out extending the benefits that are due to begin expiring on Dec. 28, but say they have no plans to pursue legislation on their own.

President Barack Obama on Wednesday called on Congress to approve an extension, and House Speaker John Boehner today said he was looking for a White House proposal on the issue.

Extremists. Terrorists. Economic traitors. Arsonists. Suicide bombers. Haters of the country. Jihadis.   

Are 99 weeks of unemployment insurance not enough?

Some examples of the maximum length of time to receive benefits around the world:

Canada: 42 weeks (and it is not uncommon for one to be ineligible for the max)

Denmark: 104 weeks (lifetime)

Germany: After a change in German law effective since 2008, provided their job history qualifies them, benefit recipients aged 50 to 54 now receive an unemployment benefit for 15 months, those 55 to 57 for 18 months and those 58 or older receive benefits for 24 months. For those under the age of 50 who have not been employed for more than 30 months in a job which paid into the social security scheme, full unemployment benefit can be received for a maximum period of 12 months.

Italy: 69 weeks

Australia: Requires that people on benefits for 12 months or longer work voluntarily for a community organisation regardless of whether such work increases their skills or job prospects.

Greece: 64 weeks

Mexico: 26 weeks

Spain: 104 weeks

Netherlands: 163 weeks (lifetime)

  After one year of uninterrupted membership of an unemployment fund and six months of half-time work, the worker is entitled to receive an earning-related daily allowance up to 80% of his or her normal income (with a maximum of 680 SEK per day). The normal income is the average income during the last 12 months, including days of unemployment. This goes for the first 29 weeks, after which the rate decreases to 70% until the 300th day, and 70% from day 301-450 (only available for parents to children under the age of 18). After 43 weeks (or 64 weeks for parents) benefit days anyone who is still unemployed must obtain a place in the "Jobb-och utvecklingsgarantin" (Job and development guarantee) labour market programme.

Saudi Arabia: 52 weeks

Japan: The length of time that unemployed workers can receive benefits depends on the age of the employee, and how long they have been employed and paying in.

UK: Job Seeker's Allowance for a single person is changed annually, and at August 3, 2012 the maximum payable was £71.00 per week for a person aged over 25 and £56.25 per week for a person aged 18–24. The rules for couples where both are unemployed are more complex, but a maximum of £112.55 per week is payable, dependent on age and other factors. Income-based JSA is reduced for people with savings of over £6,000, by a reduction of £1 per week per £250 of savings, up to £16,000. People with savings of over £16,000 are not able to get IB-JSA at all.
Australia may well be the worst country in the developed world when it comes to jobless benefits. A single person with no children who collects unemployment benefits there will receive only 28.9 per cent of the income they earned while employed, assuming they earned an average salary. Compare that to Israel, where the same single, childless person would receive 86 per cent of their salary, or Latvia, where it’s 86.7 per cent.

The U.S. and Canada fall somewhere near the middle, with Americans collecting slightly less than half — 48.1 per cent — of their employment income, while Canadians collect 59.7 per cent.

Seriously, Progressives, just how long should unemployment benefits last?  In countries like Denmark, they are CUTTING the eligible period because - get this - the shorter the benefit period, the higher the employment rate.  

From Capitol Commentary:

If you lose your job and collect unemployment are you more likely to stay unemployed until your benefits run out?  Judging by a recent study from Denmark the answer is yes:
Many people get a job within the first three months of entering the system, but many more wait until just before benefits expire to take anything available.  
It shows that between 2005-7, the number of people who got jobs during their four years of benefits — the green line – rose at the beginning before dropping sharply, then spiked as benefits were about to run out, only to plummet after. The red line shows similar behavior in 1998, when Denmark’s benefit period was five years.

We have seen a similar trend in the United States where Democrats have given most people more than two years worth of unemployment benefits.  This juicy tidbit from the Wall Street Journal:
“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 [the] reservation wage, causing an unemployed person to remain unemployed longer.” 
Full credit goes to Lawrence H. Summers, the current White House economic adviser, who wrote those sensible words in his chapter on “Unemployment” in the Concise Encyclopedia of Economics, first published in 1999. 
Going back to an article on Capitol Commentary from February of 2010 we find this fact:
As the Federal Reserve’s Open Market Committee minutes for January noted: “The several extensions of emergency unemployment insurance benefits appeared to have raised the measured unemployment rate, relative to levels recorded in past downturns, by encouraging some who have lost their jobs to remain in the labor force. … Some estimates suggested it could account for 1 percentage point or more of the increase in the unemployment rate during this recession.”

This graphic from Denmark shows the curve… some get jobs right away while most wait until their benefits are about to expire before re-joining the workforce:


Waiting until you have to get a job.

The longer you are without a job the tougher it will be to find one as employers will wonder how someone could be unemployed for 1, 2, or 3 years.

Not only do people wait until the money runs out but the more generous (and long) the benefits run the longer they stay on the dole.

Arthur Laffer writes in the Wall Street Journal:

As the chart nearby clearly shows, since the 1970s there’s been a close correlation between increased unemployment benefits and an increase in the unemployment rate. Those who argue that things are different today don’t have the data to back up their claims.

Democrats have been shoveling the money into unemployment but possibly because they have been interfering with the U.S. economy so much in the form of stimulus, Obamacare, and the uncharted waters of new taxes that these lengthened benefits have been necessary.

On thing is for sure, Denmark is cutting back on the social spending only because they are being economically forced into doing so.  Why should we in America wait until it gets to this point?

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