Paying for unemployment

What happened

U.S. unemployment claims are reaching the highest levels in decades, and 30 states could run out of unemployment funds in the next few months—Indiana and Michigan are already borrowing from the federal government to pay benefits. The Labor Department said last week that initial jobless-benefit claims hit 573,000, the highest number since 1982. (The New York Times)

What the commentators said

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The official jobless numbers are bad, but the real tally is worse, said Moira Herbst in BusinessWeek online. The government’s headline unemployment number, 6.2 percent, doesn’t count “a lot of the jobless”—contract employees, the underemployed, discouraged workers. Once you add in these “marginally attached” workers, our jobless rate soars to 12.5 percent.

The answer may not be to “tax working Americans to give money to non-working Americans,” said MIT computer scientist Philip Greenspun. Some people propose doubling the 26-week benefit period. But “do we seriously believe that Michigan is going to bounce back within our lifetimes,” much less in 52 weeks? Unemployed workers need to move to where the jobs are.

Why not do both, like Russia? asked Julia Ioffe in The New Republic online. Russia’s parliament greatly expanded its jobless benefits last week—raising the amount by 60 percent, to about $46 a month, and loosening eligibility. The catch is that it can “move the unemployed to parts of the country where there are labor shortages.”

“Most thoughtful people” see the “painful trade-off” in unemployment benefits, said Tim Harford in Slate. Research shows that they are, “regrettably, an incentive to remain unemployed” for longer periods. But they are also “a life-saver,” and can give people time to find a suitable job—which “may not be a bad thing” in the long run.