Well, it seems that Republicans are going all in on the idea that a big reason we have high unemployment is that unemployment benefits reduce the incentive to seek work. Aside from the sheer cruelty, it’s really bad economics, but whatever. And I found myself remembering a passage near the beginning of The Treasure of the Sierra Madre:
Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.
Paul Krugman, New York Times
Unemployment benefits reduce the incentive to work. Is that really such a substantial factor to explain the US unemployment figures?
ReplyDeleteI used to have this kind of thinking until I am jobless and could not find any job.
ReplyDeleteThat's not really true. US employment benefits provide a wage that is barely sufficient to live comfortably. It's not like in Europe where such social benefit actually make up a liveable wage.
ReplyDeleteSomeone used to earn $7,000 a month.
ReplyDeleteHe thought that anyone who is willing to work, and is serious about finding a job, should be able to find a job that pay him reasonably well.
After he was jobless, he was shocked to discover that he could not earn more than $700 per month (10% or his former pay) for 3 years.
Could you believe this?
Rubbish! Even someone like me every day so free and no worries also bored until i am trying to find some work, but there is none.
ReplyDeleteRetiree
There are many angles ways to look at an issue, all of which may makes sense. The final policy choice ultimately depends on the value system of the policymaker.
ReplyDeleteStatements such as "unemployment benefits reduce the incentive to work" serve only to justify the conclusion, just as MP Ong justified replacing his local workers on the basis of a resident's complaint.
IMHO, it is pointless to debate about this, when these decisions are based on systemic values.
However, it speaks volumes about the value system of a society.
The whole issue is a charade...nothing can change waht they have already made up.
ReplyDeletePaul Krugman...is one of the economist that main stream media in the US looks up to and US politicans like him alot.
ReplyDeletePaul Krugman is the person that criticized the Bush tax cuts, advocated lower interest rates (to promote spending on housing and other durable goods), and increased government spending on infrastructure, military, and unemployment benefits, arguing that these policies would have a larger stimulus effect.
Background of him in Wiki below:
http://en.wikipedia.org/wiki/Paul_Krugman
He won the nobel price with an award of about USD1.4million.
My view of him is that he is one of the people that who cause the US recession. I don't agree with many of the things he say and he is just well-known because of the US media and US politicans. We also know the US media and politicans have let the Americans down. There are better economist to listen to than him.
My brief views on unemployment benefits are below:
1) The Obama administration just increase the length of unemployment benefits one can continue to receive. Good news to unemployed Americans, bad news to the economy and taxpayers.
2) Jobs having to give a higher wage than unemployment benefits f not there is no incentive to work and one might just stay at home. Furthermore with taxes, one will receive even less than unemployment benefits. A person receiving unemployment benefits do not have to pay taxes. Ultimately this just increase unemployment and huge tax burden on the employed.
3) In reality if unemployment benefits really work, all of us can stop working and receive unemployment benefits.
Be wary of what Paul Krugman has to say.
I would like to re-type my point 2 which has some typos previously, sorry for that.
ReplyDelete2) Jobs have to give a higher wages than unemployment benefits if not there is no incentive for a person to work and one might just stay at home. Furthermore with taxes, a low wages person will receive even less than the unemployment benefits an unemployed perosn gets as a person receiving unemployment benefits do not have to pay taxes. Ultimately this just increase unemployment and huge tax burden on the employed.
Low paying jobs will disappeared and unemployment rate cannot recover.
http://en.wikipedia.org/wiki/Paul_Krugman
ReplyDeleteHe won the nobel price with an award of about USD1.4million.
My view of him is that he is one of the people that who cause the US recession. I don't agree with many of the things he say and he is just well-known because of the US media and US politicans. We also know the US media and politicans have let the Americans down. There are better economist to listen to than him.
You got to be out of your mind! Are you a right wing republican or a neo-conservative? Go brush up on your knowledge on US affairs before sprouting rubbish here.
OK guys, how much exactly is the unemployment benefits you're talking about? Also depends on the cost of living right? US$1000/mth may sound good to singaporeans, but if that place or city requires US$2000/mth for bare basic subsistence living then is not substitute for working right?
ReplyDeleteJust like in singapore, those on public assistance get $360/mth (ok with "free" polyclinic and $20/mth rental flat) but must be certified by specialist totally cannot work and got no relatives can support.
Let's say PAP become kind hearted, say that those who unemployed can get $360/mth unemployment benefits for up to 6 months. How many of you will quit your jobs tomorrow?
How about the unemployment benefit is a loan and the loan amount is proportionate to the length of employment of the worker.
ReplyDeleteFor example:
worked 1 year : 50% of monthly salary per month for 2 months.
worked 6 years : 50% of monthly salary per month for 12 months.
to anonymous March 14, 2010 1:53 PM
ReplyDeleteplease brush up on your own knowledge of economics and political science before accusing ghim moh resident of sprouting rubbish.
his economic reasoning is perfectly valid.
paul krugman once said during the depths of us recession in 2003 that a housing bubble needs to be created to bring them out of the recession, you can check this fact out yourself. you call that sound advice?
winning a nobel prize in economics does not really mean anything. you can find out who are the creators and sponsors of the economic nobel prize. the rest i leave it to you to draw the conclusion.you should judge people based on their arguments rather than the stature given to them. being a economic nobel prize winner does not mean he speaks with wisdom and expound the truth.
do not be naive when it concerns world affairs. broadly speaking there are only two groups of people. those who advocate the continuous expansion of government power over individual liberty Vs those who favors greater individual freedom and liberty. those who feel that the government is the source of order and wealth for society Vs those who feel that liberty is the mother of order and prosperity.
why are there great wars, great poverty, great unrest and economic and financial turmoil? is government the solution to all these? or really the culprit?
which side are you on? for government or freedom and liberty?
i leave it to you to find out the answer to all these yourself.
To Anonymous said...March 14, 2010 1:53 PM;
ReplyDeleteBelow is the link regarding neo-conservative. If I am one, I will support Paul Krugman. Please read about Paul Krugman views and you will realise what i said is true. Read it please.
http://en.wikipedia.org/wiki/Neoconservatism
To Ex-Con said...March 14, 2010 3:00 PM
I am refering to unemployed people. People who dont even have a choice of job in the first place, let alone quit to receive unemployment benefits. And there are 15 million of them in the United States currently.
Such attacks are unnecessary and yes mischief. It a waste of time.
To Ghim Moh,
ReplyDeleteI don't understand your conclusion -- are you saying that the presence of unemployment benefits in the US, and the extension to continue paying this unemployment benefit is causing many of the 15 million unemployed not to go and find jobs?
Or that jobs are not available because employers need to pay higher than this unemployment benefit, and employers are currently unwilling to give such pay?
To me, unemployment benefit is just a temporary respite and mainly for humanitarian reasons. Most countries do not provide good amounts of benefits -- just subsistence living, and also for a limited period of months. Many jurisdictions also impose some self-funding mechanism such as unemployment insurance paid from your own salary every month or co-pay by your employer (and up to employer to work this into your salary contract). If you still got no work after your benefits run out -- too bad for you.
Unfortunately, many govts use or abuse unemployment benefits for political gains. Obama's recent extension of unemployment benefits is a populist move as everyone knows the lack of jobs is a political killer, his ratings have gone down, and he is facing mid-term elections for his party end of 2010.
But when used properly, doesn't mean that unemployment benefits should be just thrown away or used as excuse that it causes people to become lazy.
Hi Ex-Con said...
ReplyDeleteIf you read my views above, i was mainly talking about Paul Krugman and didnt really type any conclusion of unemployment benefits.
The extension of unemployment benefits the way I see is political, it applease the public. Where to get the money to extend it when the United States is broke? Where?
Earlier, i did mentioned about low paying jobs disappear because of unemployment benefits, the same will happen here. You have to pay taxes when working but not collecting unemployment benefits.
And if the low paying jobs in the United States disappear, how can employment improve.
Read today's Business Times, 16 March 2010.
ReplyDeletePg 25 by Paul Krugman.
Titled: "US must play hardball with China"
Read this article and you will know what kind of person Paul Krugman is. Its what I have mentioned earlier. Thanks.
View the video blog of a president in a US brokerage firm.
ReplyDeletehttp://www.europac.net/videoblog.asp?a=watch
He was commenting on Paul Krugman article "US must play hardball with China". It appears in The New York Times and the Singapore Business Times yesterday.
I agree with what he commented, do view this 10min blog.