Unemployment

[ggeezz]

I think Daniel Hamermesh summed up the issue nicely.

The past 40 years have seen huge amounts of research showing that extending the potential duration of unemployment benefits creates an incentive for the unemployed to search less and remain unemployed longer. This is one argument used against re-extending potential duration to 75 weeks. Yet most of the research describes behavior in average economic times, not when the unemployment rate is 9.5%. What little research is available suggests smaller effects when there are fewer job vacancies.

But even if that were not true, would it matter? The original, and I believe continuing, purpose of unemployment insurance is to maintain consumption of the unemployed—to prevent hardship. With 45 percent of the unemployed out of work more than 26 weeks, by far the highest percentage since the 1930s, consumption maintenance seems to argue even more strongly than usual for the wisdom of re-extending benefits.

IMO we should be subsidizing jobs.

[nathan]

IMO we should be subsidizing jobs.

Public sector jobs?

[ggeezz]

IMO we should be subsidizing jobs.

Public sector jobs?

Private sector, unless they don't fill the demand.

The only requirement to have the desired affect is that they will take anyone from the unemployment line. So why not let any corporation post as many such jobs as they would like with their desired subsidy. The unemployment commission fills these jobs starting with the lowest commission and going up to whatever the cost for a public sector job is. But you also want to look for the best fit, so perhaps the person chooses from jobs that are close enough in subsidy. If there aren't any such positions available they get a public sector job.

There are several essential details. We don't want to end up subsidizing every private job. We also don't want the public sector jobs to be dead ends. So the subsidy needs to phase out over time. Hopefully the corporation will keep them anyway. If not we need to move them so they end up in a place that is economically profitable and the employee is happy enough with the job.

There are competing objectives. Ease the hardship of unemployment, but also provide incentive to get a non-subsidized job. Entice private corporations to offer subsidized positions, but also entice them to make them permanent positions if it's a good fit.

But what we're doing now is almost the worst possible solution. The incentive is to not work even if you can, but the people that really can't get a job just get cut off.

[nathan]

Oregon has what I think is a good program for unemployment. People have the option to take "small business assistance" in lieu of traditional unemployment. Basically this allows them to receive the standard unemployment benefit as well as part time wages, provided that they creating and developing a new business (or expanding an existing one).