Saturday, October 3, 2009

U.S. Unemployment Now Lasts Longer Than Benefits?

Not quite.

A very misleading headline on a Bloomberg story is circulating the internet.

The headline: U.S. Unemployment Now Lasts Longer Than Benefits.

The story reports that for the first time ever, the average amount of time it takes fired employees to find a new job exceeds the length of their standard unemployment benefits. The key in this sentence is "standard". Bloomberg continues:
the average duration of unemployment is now 26.2 weeks, longer than the 26 weeks of state benefits normally provided to workers who lose their jobs.
But, as the story only then reports:

Congress has extended unemployment benefits twice -- first in July 2008 and then as part of the stimulus bill signed in February. Currently, the unemployed are eligible for a total of 46 weeks of benefits, and those in states where the unemployment rate is more than 6 percent are eligible for 59 weeks.
If people are being paid not to work for up to 59 weeks, it is not surprising that unemployment is extending beyond 26 weeks.


  1. People are not paid not to work. They are paid not to bring the country down. A desperate person of working age, in large enough numbers, once the dead end situation is realized, can easily (and even willingly) cause far more destruction that the benefits he is paid. And if such people get organized, it's game over for the government - a loss of control over the territory would be just a start.

    Benefits cost less, as simple as that. Economists have a problem understanding the boundary of economics, and it's even more folly for ones who are familiar with "human action". Human action is broader than just economy. It's in national economy's interests to keep people within the boundaries of economic human action, even if it costs something.

    I know what I am talking about here. I have seen what happens when people take matters in their own hands, and the government's power contracts to the boundaries of the capital. It's not pretty.

  2. Let's say it costs 8% of an employer's income to employ worker X. The govt raises the employer's income tax 8% to fund an unemployment benefit. The employer can no longer afford worker X and fires him. The worker goes on unemployment where he is now paid to be unproductive (as opposed to being paid to be productive in the employ of the employer).

    The govt pats itself on its back and says "Just in time!"

  3. Anon,

    You wouldn't happen to be a paid tool of the United States military currently participating in the VIOLENT, DESTRUCTIVE invasion and occupation of a foreign country like Iraq or Afghanistan, would you?

    If you were, I could see why you'd ignore your own (and the govt's) culpability in creating the environment of desperation that breeds destruction and avarice that you just claimed govt must prevent.

    Gee, would LOVE to see the calculation you performed to come to that conclusion... yikes.

  4. No, I wouldn't. I've seen what I've described above. May be you'll see it too, now in US.

    A calculation? Oh, well, a quick one. Let's say a man lost a job but still needs $X to live. Let's say the govt pays him just that. While he adjusts, he draws his savings down to 0. Because the jobs are not just lost, but are destroyed, there just not enough of them. So it comes down to that: a man is put on ice with a $X check to live until the situation changes.
    Let's say it changed for the better, there are more jobs being created, and that man finds one simply because living on $X is just not satisfactory. End of story, $X times T money lost, now back to normal.
    Otherwise, the happy end doesn't happen, more jobs are destroyed, more men are put on ice. Now let's grant your wish and cancel the $X check. The man still needs that much to live, right now. Being in a desperate situation, HE FINDS A WAY TO GET IT. Then again, and again. Now he has a new job, not the productive one, and a little on the "dark side of the Force" (not in GS). Instead of one man put on ice for a while, you got yourself one man that's lost for economy forever as he is an outlaw now. And he is not alone, he has partners just like him. And being organized, they are stronger, more decisive and with no bridges left to burn. They cost society far more than that $X. Locally, they have more power than the govt. They can TAX locals at a reasonable 10%, or else. And all that could be prevented with a $X check. And by the way, since you've mentioned that, the former soldiers dumped by their former employer are the perfect material for such a story. This is not a fantasy, it happened before my eyes ones. It may happen before yours when the US govt gets broke.

  5. Anon,

    You have a truly fantastic imagination, which you believe is a sound alternative to a logical, principled thought process, but which is in fact an intellectual farce that comes across as a not-so-humorous joke.

    You're so dull-witted you don't see that the recovery to save this unemployed man is always $X further away for each $X the govt takes from the private sector and redistributes to this man for doing NOTHING OF PRODUCTIVE VALUE.

    You don't understand production and you don't understand exchange. I won't call you 'sir' because you don't deserve it. You're a dull-witted scoundrel posing as a prophetic defender of a lawful society. You advocate an unlawful disruption of said society (govt welfare redistribution) as a means of saving it.

    Clean things don't come from unclean things.

  6. TAYLOR,

    I don't see a point in this conversation any more. Name calling a person you know nothing about is an "exit" signal for me. So one thing for you: learn about DESTRUCTION, as it is really the emerging phase of the US economy now. And not the creative kind of destruction.
    There is an abundance of eerily reminiscent history to look at and learn from, but you surely can find it yourself without any input from dull-witted imaginative alien types.

  7. Anon,

    I am perfectly cognizant of the destruction occuring in the US economy. I don't need you to clue me in. Let me clue you in, however-- the govt is culprit numero uno. No private criminal or group of private criminals will ever surpass the government and its printing press in terms of destructive capability, to the economy or to 'society' as a whole.

    Your proposal to stave off this destruction is to engage in more of it (redistributive, unproductive welfare subsidies). Your plan to avoid economic destruction is to have the govt engage in economic destruction. You make no sense, like the bailoutistas calling for tighter government regulations of the financial system.

    You attempt to justify this 'need' through some obtuse, child fantasy scenario of the death of society via a slippery slope started by not giving an unemployed man unemployment benefits. Somehow this is supposed to be serious thought worthy of consideration on the part of other people, like me.

    I'm glad you've decided to show yourself the door.