Unemployment Extensions Debate and "Average Economic Times"

In the ongoing debate over whether or not emergency unemployment benefits extensions should be further extended until a future date, Daniel Hamermesh, writing for the "Freakonomics" blog of the New York Times, suggests that the arguments against unemployment extensions are based on faulty premises. With the current official unemployment rate in the United States at 9.5 percent, down from 9.7 percent in May, and the Senate tied up in filibuster over bill H.R.4213, which includes a $33.5 billion unemployment benefits extension provision, the matter might be settled a lot faster if a few things were taken into consideration.
Hamermesh contends that the most of the data that those against extending unemployment benefits use isn't accurate, noting that the data in most studies used to back up such claims that long-term unemployment assistance is a disincentive to find work are studies in which "research describes behavior in average economic times." As Hamermesh points out, these are not "average economic times." The 9.5 percent unemployment rate is exceptionally high and the rate has remained relatively high for some time.

Hamermesh also notes that the original intent of unemployment compensation is to provide for continuing consumer consumption and provide a defense against economic hardship. He notes that with nearly half of the unemployed considered long-term (27 weeks or longer without unemployment), a number higher than it has been since the Great Depression, it would seem that the argument is even stronger that the extension of unemployment benefits are necessary for continued consumption.

The U. S. Department of Labor reported in June that there were five potential applicants for every available job opening. Given that there are an estimated 15 million jobless in the United States, if every one of those jobs were filled by an unemployed person, there would still be 12 million unemployed persons in the United States. This does not take into consideration the estimated 130,000 to 150,000 individuals that enter the job market each month or the parameters of hiring for the respective job openings (which sometimes discriminate by age, race,and even if one is employed or not).

There are no economic indicators nor economists that show or are claiming that the current "deep" recession will end within the year, yet there are those who would base their argument for disallowing the extension of emergency unemployment benefits on data gleaned from studies that use as their baseline "average economic times." And in that disallowance, the negated billions of dollars that does not enter into the economy has a ripple effect that extends outward, not only effecting the individual that no longer is receiving unemployment benefits, but those that depend on them, such as family, banks, businesses, service providers, utilities, etc. Those same individuals who would disallow because they believe that the unemployed are simply "milking the system" and "living large" off their $1,200 (average) per month apparently are ignorant of the math of job unavailability.

These are not "average economic times." They are harsh with the potential to become even more harsh, on individual, community, and national levels. Continued debate on false premises and hard-hearted ignorance only hurts the millions who have for years contributed and continue to contribute.

They deserve better than average from their fellow Americans and politicians.

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Sources:

NYTimes.com