Are Unemployment Benefits a Disincentive to Work?

Wednesday, July 07, 2010

hands, money (AriCee/flickr)

Around 1.3 million people in the U.S. have lost their unemployment benefits since the beginning of 2010.

Yesterday, we talked with two people who have recently lost their benefits: Donovan Marsden in New York and Michelle Ives in Texas. And we asked: does the extension of unemployment benefits provide a disincentive to finding a job? We got an overwhelming number of responses on both sides of that argument. Some listeners thought it was callous even to suggest that people receiving unemployment benefits don't want jobs. A few listeners actually admitted that receiving benefits has made them lazy. Today, we get an economic perspective.

Duke University economist Mike Munger looks at the history of unemployment benefits and their effects on the unemployment rate.


Mike Munger

Produced by:

Noel King

Comments [11]

Hazel Feldman from Manhattan

I have no patience for those who judge with two loaves of bread in their hands.

I was so desperte to get a job (any job) that I was seriously thinking of posting a $500 reward on Craig's List for a job. The unemployment benefits supported me; but not working leaves one emotionally drained and desperate. No amount of money can give one a sense of purpose and self-respect. Unemployment benefits clearly should not be seen as an incentive for not working. If should be seen as a way to help those of us who have worked hard over a lifetime from being evicted and hungry.

Jul. 08 2010 05:08 PM
charlotte from Northville Michigan

No doubt this long bout of checks for free is keeping people unemployed. I am a school teacher and have had some of the parents in my class say "I feel a little guilty taking it, but I will as long as it comes!" They come into my class and help out, while they are off, then they go to the gym and work out! These people are ex engineers, etc. who also go t stipends. They love it and are pinching themselves. Then there are others, like my brothers in law also on unemployment for 1 and a half years and counting, also loving it, and will start looking when the checks run out. Plain and simple truth. If the checks ran out, they'd go out and do the uncomfortable thing...get the job.

Jul. 08 2010 01:33 PM

Sure it can make a person not find a job, in the right circumstances. I've heard plenty of people--during this recession and before it--say that unemployment pays them better than working at McDonald's for minimum wage would do...why wouldn't you choose the option that better pays the bills? If people are passing up jobs for unemployment, it's probably not because the jobs pay better.

Jul. 07 2010 08:47 PM
Aaron Leopold from New York

I think that mine is an interesting case study...
I am a freelance graphic designer and I was unemployed much of last year. I took a temporary position for a couple of months at a lower rate than I normally had made in the past. When the position was completed I got back on unemployment, but because I had spent those months working I had to start a new claim - which ended up being at a lower weekly rate. My old claim, still had 10 weeks on it and could have been extended for another year.
So in my case the unemployment system seems to have provided me with incentive to avoid looking work.
Although I did do my best not to be lazy while unemployed - just because an individual is not working doesn't mean they can't a productive member of society.

Jul. 07 2010 04:50 PM
Ann from New York

Unemployment benefits are a flashpoint for the Jansonists and the liberals among us; so many responses are peppered with wants, feelings, character attacks and defenses rather than reasoned, supported plans. Isn't it common sense that: 1. extended unemployment benefits will deter the unemployed from taking any available jobs they really don't want at salaries below what they made in their prior jobs or think they should be making and 2.cutting benefits when no jobs are available will leave people destitute or overwhelming other welfare institutions? The real questions are: how many and what kinds of jobs are there now? is society better off with the unemployed taking jobs they don't want for what they believe is too little money? with some more help(how much more help I don't know), could unemployed people make the money and do the work they want to help revitalize the economy?

Jul. 07 2010 04:48 PM
Dan from Chautauqua, NY

There seems to be an assumption among some of the folks here that there are jobs out there for the unemployed to get but they're just too lazy to take them. I'm afraid that's just not reality.

My question is this: Are we ready for the ramifications of a country where 10, 15 or 20 percent of the population have no proper access to money, health care or a legal means of support?

Jul. 07 2010 02:32 PM
Jeffrey from Minneapolis

I've been unemployed for over a year now. There are a few things that I would like to point out.

First and foremost, there seems to be an assumption that getting a job is a one person affair. The last time I checked, you can apply to every job there is, but if they don't hire you, you don't have a job. So, why is all the burden always on the unemployed person and never on the businesses to hire them?

A great many of these people who lost their jobs in the last 24 months didn't lose them due to something they did, but because management either took large risks or they cut people because they THOUGHT they might be in the trouble in the future. Either way, the same people who now complain about paying for unemployment benefits are the very same people that caused the situation. I would argue that businesses paying for unemployment is just another business cost.

The last point is that contrary to Republicans, not every works just for money. I know that when you hold money up as the end all be all, you think that others love it as much as you do. Many people work, because they wish to be productive in society.

Jul. 07 2010 11:49 AM
Glenn Wilder from Grove, OK

I was listening to your broadcast yesterday during which you interviewed two unemployed individuals. The female stated that she had been earning $20 an hour! What was she doing for that earnings rate? I didn’t earn that with a graduate degree! Did she have a savings plan or did she own two cars and was paying for a house she could not afford?

Jul. 07 2010 11:48 AM
mp from New York

Ben, this is a statement of a young person. Many people lost their jobs because of the financial crisis and the serious downturn in the economy; the economy should serve people as well; we need to provide employment for people and treat them with respect; no one can live on unemployment benefits do not fool yourself ...many people have been overworked, pushed over the limits because the businesses cannot hire help;

Jul. 07 2010 09:54 AM
Finnbarr Dunphy from Columbia, SC

Please learn the difference between the verbs "lie" and "lay." The other day, when commenting on the funeral arrangements for the late Senator Bird, you repeated the wrong form five times—the senator will "lay" in state... "Lie" is intransitive (has no object). "Lay" is transitive (has an object). Saying that the senator will "lay" presumes he will lay "something," like a wreathe—difficult under the circumstances! The senator will "lie" in state is the correct form. Thank you for your attention to this important grammatical issue. Finnbarr Dunphy

Jul. 07 2010 09:48 AM
Ben from Lubbock

Once again, the government is forcing the people to pay for others (lazy or not). Have we not seen these broken systems fail over and over again. As a college grad, working for a bank, I find it highly demoralizing when I see unemployed people being given more money than I can make within a two-week period. These same people have been on unem. benefits for over a year. People need to acclimate themselves toward fluctuations in the economy, the economy can not be acclimated to the needs of the people.

Jul. 07 2010 09:28 AM

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