Out of Control Policy Blog

Unemployment is Hard and Personal

The Senate is soon to passing its version of an unemployment benefits extension to the excitement of many and groans of others. (See here for David Godow's post on that.)

This morning I got a letter from a family member, encouraging me to support the extension, because one of my cousins had recently lost her job again and needed more unemployment. She has either been unemployed or in a temporary job for the past three years. Given that her job market is Detroit, it is little wonder that she's had difficulties. But the email brought up an important reminder that this issue is messy and personal.

While I remain opposed to an extension of unemployment benefits, I realize that this is a macroeconomic view, which tends to overlook that there are real people, really hurting the economy today. My cousin—we'll call her Cousin Mary, since I have thousand family members named Mary or some derivative of that—is one of those people. I was forwarded a email she sent around to our mostly Italian Catholic family asking for prayer that she would get a job. The email was painful for me to read. She is more than a percentage point on a Bureau of Labor Statistics spreadsheet.

That is what makes this so messy. You have on one hand economic principles that govern a stable marco economy for the good of the whole. And then you have people who are not living the life they would like to live in that society. While economics is not a zero sum game (there doesn’t have to be a loser for every winner), there are sometimes losers in the economy. There are unemployed people, and there are people who don’t have immediate access to the best possible health care, and there are people whose families are stuck on the other side of an imaginary line in the dirt called a border.  

Public policy debates are a battle over how to view this predicament because this issue we are facing today is bigger than any one person. The basic arguments opposing unemployment benefits are that they incentivize unemployment and extend the national debt by misallocating public funds. I have no doubt that my cousin has been trying to find work. So have many of those on unemployment. But the existence of and extension of unemployment does change the mindset by which the aggregate of the unemployed approach finding a job.

For those with college degrees, the question is more about finding a job you want and like that pays you what you are worth than it is about finding a job that is available. For those without higher education, the question is more often about finding a job that pays enough to meet a specific standard of living. The more unemployment benefits are available, the more people likely to languish on unemployment, looking for that perfect job.

What about those genuinely seeking work that will take anything but can't find it? Well, there are jobs available in America. While walking to dinner in Alexandria, VA last night I saw a number of signs from retail businesses saying they were hiring. In Houston there are new openings in the medical field posted on Craiglist everyday—and good paying ones too. Seattle has a number of spa, salon, and fitness jobs available, including two dozen yesterday and today.

At a certain point, people looking for work eventually just have to take a lower job than they would want. And if one has looked for work where they live and can’t find it, maybe moving is the answer. Because there are jobs in the country. In an economy like we face today, some people are simply going to have to move. There just may not be enough jobs available in Detroit for everyone that want them. Certainly not with the restrictive economic laws in the state of Michigan.

But that doesn't mean it is easy to move. I don't want my Cousin Mary to have to leave the home she's known her whole life. To leave the support network of family and friends she has. And, in fact, in some cases it might be more detrimental to move away from a support network if the job you are moving too is unstable. But given how mobile society can be today, it has to be considered because if there are jobs elsewhere, but not in Detroit, and there is no good faith effort to seek those jobs, then the government is just paying my Cousin Mary others to stay in a place with no jobs. While the unemployment benefits may not be keeping her from looking for a job where she is at, they are keeping her from looking for a job in other places that work is available.

In this way, unemployment benefits reduce economic growth by keeping job openings in other places open longer through an incentive to stay in a place where jobs are scarce. But again, this doesn't make the pain of my cousin any less real, and it doesn't mean the process will be easy. This is still personal, and still painful.

Looking at the other critique of extending unemployment benefits, adding to the deficit and debt, there is more on a macro scale here than a few billion dollars. At some point we have to stop kicking the can down the road. The economic pain we feel today is the result of various failed economic policies from the past. Cousin Mary is feeling the pain of economic decisions by the Bush, Clinton, Bush, Reagan, and Carter administrations. They sought to help others by using the power of government to promote employment and home ownership. But in extending a hand them then, the created an unstable economy and kicked debt can down the road to us today, creating a frustrating employment environment for Cousin Mary. (And lets not forget Gov. Granholm's management of the state right into the ground over the past eight years.)

So extending benefit now may provide some assistance for Cousin Mary, but it is just going to push the deficit and debt can down the road like previous governments. We don't know who those people to get hit will be. But they will surely have family too that don't like seeing their cousin frustrated and in economic pain.

Of course, I have a job. It is much easier for me to say nip it in the bud. I realize that I am in a position where I can seem heartless. It would be much more intellectually fair for me to make that decision from a position of unemployment. I realize the macro economic view, while geared towards a more stable market, in the future, doesn’t put bread on Cousin Mary's table now. It is messy. It is personal. And it will take a lot of will power and tough decisions to get through.

Anthony Randazzo is Director of Economic Research


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