Why Extending Unemployment Benefits is Good for America
Unemployed people spend money
According to Mark Zandi, chief economist with Moody's Analytics, for every $1 the government spends on the unemployed, it comes back as $1.64 in economic activity. So basically, the American economy makes money by providing benefits to the unemployed. It's not too difficult to see how this happens. Unemployed people don't send their checks into off shore accounts in Zürich. They buy groceries to feed themselves and their families. They pay Staples to print more resumes. They buy gas to drive to job interviews. All this spending helps stimulate our economy and keep others employed.
Unemployment and suicide: A casual association
Americans tend to identify themselves by what job they have and how much money they make. Take away that job, and you've taken away a part of that person. A 2003 study published by the Journal of Epidemiology and Community Health concluded that people out of work had "twofold to threefold increased relative risk of death by suicide, compared with being employed." About half of this association could be attributed to mental illness. If someone is already devastated by the loss of his/her job, just think of what will happen to that person when the unemployment benefits run out before landing a decent paying job.
From unemployment lines to welfare rolls
According to a 2009 article from The Wall Street Journal, welfare rolls soared in some of the states with the highest unemployment. As the article states ' As more people run out of unemployment compensation, many are turning to welfare as a stopgap.' Face it, just because you run out of unemployment benefits, doesn't mean a decent paying job magically appears. People will simply shift from one government subsidy to another to keep their heads over water. Also take into account other subsidies that people on welfare may qualify for: food stamps, charity health care, affordable housing.
Sources:
Griffith, Donald Unemployment Benefits Help More Than Just The Unemployed, America's News Online, May 18, 2010
T Blakely, S Collings, and J Atkinson Unemployment and suicide. Evidence for a causal association?, Journal of Epidemiology and Community Health, 2003 v57, pp 594-600
Zandi, Mark Washington Throws the Economy a Rope, Economy.com, January 22, 2008
Murray, Sarah Numbers On Welfare See Sharp Increase, Wall Street Journal Online, June 22, 2009
Published by J Budd, RN - Featured Contributor in Health & Wellness
I am a registered nurse and former radio broadcast journalist in the NYC/NJ area for over a decade. Some of the stations I have worked with include Bloomberg News Radio, Sirius Satellite Radio, Fox News Rad... View profile
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11 Comments
Post a Commentgood article, Jennifer! for anyone who has not seen and signed the new petition for: 2010 Unemployment Benefits Extension sorely needed for anxious Americans, it is at: change.org http://www.change.org/petitions/view/2010_unemployment_benefits_extension_is_sorely_ needed_by_anxious_americans
The world doesn't owe me a thing. We're forced to buy unemployment insurance, and then when it's needed, "they" throw every reason available at us to deny our claim. Unemployment might've been a great idea if it were merely an option to consider. But, as with all things, once gubbermint got involved it just went to hell in a handbasket.
Great points!
It would be inhumane not to extend unemployment with so many out of work.
Good article. As an economist I agree 100% that unemployment benefits should continue for as long as is needed until we get normal unemployment levels. Another factor that unemployment does not take into account is the fact that it only accounts for people that are jobless that are looking for a job, not the ones who are underemployed, given up looking, or the ones that went back to get an education. If I had to estimate I would say the true unemployment rate is around 16-20%, which is much higher than the projected figures.
Another thing that needs to addressed is using the "%" of unemployed. People cannot picture what that % means. For example, Senator Baucaus, from Montana has 7.1% unemployment in his state. Sounds like a lot, and not to take anything away from anyone unemployed in Montana, his 7.1% unemployment roughly turns out to be 39,000 people. This is based on the 970,000 population of his state, in which I used half of the population as eligible to work. Now where I live, the population is 12,900,000, with 11.5% unemployment. That comes to roughly 741,000 unemployed. Do you see the difference? That is what people of this country need to see. The true numbers, and not the %.
One thing that no one has mentioned is the Tax Credits for businesses. This is the biggest piece of legislature that has the potential to cost the American citizen the most. These credits are projected into these bills, even tho companies are not hiring. So let me tell you what will happen. These businesses will hire seasonal employees for Christmas, claim the tax credits, and layoff after the holidays. These Tax Credits need to end. The companies won't hire unless demand exceeds supply, and that won't happen when the ones who have to spend, haven't any money to spend.
Another thing that needs to addressed is using the "%" of unemployed. People cannot picture what that % means. For example, Senator Baucaus, from Montana has 7.1% unemployment in his state. Sounds like a lot, and not to take anything away from anyone unemployed in Montana, his 7.1% unemployment roughly turns out to be 39,000 people. This is based on the 970,000 population of his state, in which I used half of the popu
I have already been reading about suicides as a result of loss of income. Sadly, this is only the beginning and apparently a price that the politicians are willing to pay. Without conscious.
It is not good for the kids either. I can remember my dad's shop folding in 1988 and being very worried all summer because he collected unemployment and was looking for another job. Unemployment affects the whole family unit.
Oh, and the return we get get back ($1.64 vs. $1) was a fabulous stat as well.