February 22, 2012

Unemployment insurance was created to provide a safety net to aid Americans as they found their way back into the work force.

However, these benefits today provide not a net but a comfy cushion. They offer little incentive for the unemployed to re-enter the workforce.

As of January 2012, the average unemployed worker searched 40 weeks before finding a job — but thanks to federal policies, workers in many states can collect unemployment benefits for up to 99 weeks, or nearly two years.

In a new analysis, The Heritage Foundation’s James Sherk argues the current unemployment benefits are excessive and a drain on the economy:

Extending unemployment insurance benefits has helped unemployed workers in a difficult economy. It has also increased unemployment and the deficit. Extending UI during a recession makes humanitarian sense, but two years of benefits was excessive when Congress passed it. A year-and-a-half of benefits in a recovering labor market is still excessive. A more appropriate level at this point in the ongoing slow recovery would be 60 weeks.

Even liberals agree.  Alan Krueger, chairman of President Barack Obama’s Council of Economic Advisers said,

The empirical work on unemployment insurance (UI) and workers’ compensation (WC) insurance finds that the programs tend to increase the length of time employees spend out of work.

With the improving job market, providing 99 weeks of unemployment insurance benefits is excessive. The recovery is slow, but it will not be helped by policies that disincentivize Americans from seeking employment.

Where do you believe unemployment insurance benefits should be capped?

Comments (4)

Donald Gronewold - February 25, 2012

You are right. I know people who don’t look for jobs or don’t want to be retrained or move to a different area
to find a new job

Mike - February 25, 2012

26 weeks is enough.

Duane Harrison - February 25, 2012

I think benefit should remain at 99 weeks, but should be gradually tapered after the first six months by 20% each six months.

K. Douglas - February 26, 2012

I’m convinced that too many unemployed have no real desire to search for work. With never ending unemployment checks coupled with food stamps, a significant number choose to stay unemployed. While receiving these benefits, it is not uncommon for many of accept work/jobs as long as they are paid cash.

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