Generous unemployment benefits are a great way to boost the economy in the short term but are leading hundreds of thousands of workers to stay out of the workforce longer than they would otherwise, according to the latest report by Congress’s official scorekeeper.

The report by the Congressional Budget Office comes as President Obama and lawmakers on Capitol Hill are trying to forge an agreement to extend those generous benefits, as well as continue the 2 percentage-point payroll tax holiday for the rest of this year.

CBO said unemployment is likely to remain above 8 percent into 2014 — a dreary picture that suggests the last few months of progress will not continue...

Going forward, the report said extending the payroll tax holiday for employees has a solid return on investment — but said it actually would have been better if the tax cut had gone directly to companies, rather than to individuals. CBO said that was the second-best option it reviewed.

Bonzoboy1 posted:

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I don't know why anyone bothers quoting the CBO people only believe them when it supports their side.

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"The best return on investment came from increasing aid to the unemployed. That was a chief item Democrats pushed for as part of the deal to extend the payroll tax."

“In order to remain eligible for unemployment benefits, more people without jobs have continued looking for work — though, in some cases, less intensely and more selectively than they otherwise would have — after the normal 26-week benefit period,” CBO said. “In that way, the extensions of benefits have kept more jobless individuals in the labor force, thereby pushing up the unemployment rate by roughly one-quarter of one percentage point.”

Remnant_OBrien posted:

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“In order to remain eligible for unemployment benefits, more people without jobs have continued looking for work — though, in some cases, less intensely and more selectively than they otherwise would have — after the normal 26-week benefit period,” CBO said. “In that way, the extensions of benefits have kept more jobless individuals in the labor force, thereby pushing up the unemployment rate by roughly one-quarter of one percentage point.”

Correct me if i'm wrong but doesn't this say that unemployment benefits actually keep people from giving up on job searches?
Its not that unemployment benefits encourages joblessness. It's that unemployment benefits keep more people active in the category that counts in our current unemployment measures... Otherwise more people would fall out of that category, reducing the overall size of the counted labor pool and thus increasing unemployment (under this measure) but not others.

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CBO in 2010 posted:

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In CBO’s assessment, the extensions of unemployment insurance benefits in the past few years increased both employment and participation in the labor force over what they would otherwise have been in 2009.

The increase in the size of the labor force and the reduced intensity of job searches considered alone would tend to increase the unemployment rate. However, other effects of the extensions work in the opposite direction—making assessing the overall effect of the extensions on the unemployment rate in 2009 difficult.

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CBO in 2012 posted:

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Factors Causing High Unemployment
Many factors are responsible for the rise in unemployment in general and in long-term unemployment in particular. Explanations include the following:
? Weak demand for goods and services, as a result of the
recession and its aftermath, which results in weak
demand for workers;
? Mismatches between would-be employers’ needs and
the skills or location of the unemployed;
? Incentives from extensions of unemployment insurance
for people to stay in the labor force and continue
searching for work;

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Ashmaele posted:

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So when unemployment benefits run out, the person for whom they just ran out is no longer considered part of the labor force? That's really dum

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Lyken-P posted:

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Remnant_OBrien posted:

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“In order to remain eligible for unemployment benefits, more people without jobs have continued looking for work — though, in some cases, less intensely and more selectively than they otherwise would have — after the normal 26-week benefit period,” CBO said. “In that way, the extensions of benefits have kept more jobless individuals in the labor force, thereby pushing up the unemployment rate by roughly one-quarter of one percentage point.”

Correct me if i'm wrong but doesn't this say that unemployment benefits actually keep people from giving up on job searches?
Its not that unemployment benefits encourages joblessness. It's that unemployment benefits keep more people active in the category that counts in our current unemployment measures... Otherwise more people would fall out of that category, reducing the overall size of the counted labor pool and thus increasing unemployment (under this measure) but not others.

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Bolded the phrasing you are glossing over.

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Ashmaele posted:

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So when unemployment benefits run out, the person for whom they just ran out is no longer considered part of the labor force? That's really dum

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Ashmaele posted:

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So when unemployment benefits run out, the person for whom they just ran out is no longer considered part of the labor force? That's really dum

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Yukishiro1 posted:

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Of course they do. Why would anyone even debate it?

If you're getting 450 bucks a week you are going to have less of an edge to find a job than if you're getting 0 bucks a week.

That doesn't mean UI is a bad idea.

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Yukishiro1 posted:

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Of course they do. Why would anyone even debate it?

If you're getting 450 bucks a week you are going to have less of an edge to find a job than if you're getting 0 bucks a week.

That doesn't mean UI is a bad idea.

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Abaddon_Ambrosius posted:

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I agree. So do a lot of others. That's why so many just ignore the politicized "unemployment rate" figure.

If you're not talking the U6 unemployed-and-underemployed number, you're not even close to touching the topic with any honesty.

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Groucho48 posted:

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In times of a low unemployment rate, I would say that unemployment insurance very likely disincentivzes a fair number of folks from looking for jobs as seriously as they should...because they are reasonably sure they will be able to get a job fairly quickly when they do get serious about it.

In times of high unemployment, though, I don't think that would be as much of an issue. When you know that jobs are really hard to get, you tend to have a lot more incentive to look for one.

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ZigmundZag posted:

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Groucho48 posted:

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In times of a low unemployment rate, I would say that unemployment insurance very likely disincentivzes a fair number of folks from looking for jobs as seriously as they should...because they are reasonably sure they will be able to get a job fairly quickly when they do get serious about it.

In times of high unemployment, though, I don't think that would be as much of an issue. When you know that jobs are really hard to get, you tend to have a lot more incentive to look for one.

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Or they'll just tell themselves that they probably couldn't find a job if they really tried, anyhow. People will rationalize taking free money any way they can.

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Lyken-P posted:

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Remnant_OBrien posted:

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“In order to remain eligible for unemployment benefits, more people without jobs have continued looking for work — though, in some cases, less intensely and more selectively than they otherwise would have — after the normal 26-week benefit period,” CBO said. “In that way, the extensions of benefits have kept more jobless individuals in the labor force, thereby pushing up the unemployment rate by roughly one-quarter of one percentage point.”

Correct me if i'm wrong but doesn't this say that unemployment benefits actually keep people from giving up on job searches?
Its not that unemployment benefits encourages joblessness. It's that unemployment benefits keep more people active in the category that counts in our current unemployment measures... Otherwise more people would fall out of that category, reducing the overall size of the counted labor pool and thus increasing unemployment (under this measure) but not others.

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Bolded the phrasing you are glossing over.

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ZigmundZag posted:

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I don't know that it encourages joblessness, but it certainly makes being a discouraged worker a lot more comfortable. At the end of the day, I think there's still far more demand for jobs than supply so I don't really see it having an impact. I've often wondered why more jobless benefits don't go towards self-employment options such as small business planning and loans, though.

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Ashmaele posted:

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Bonzoboy1 posted:

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I don't know why anyone bothers quoting the CBO people only believe them when it supports their side.

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Was about to post this.

Also, I generally do not like ad hominem, but I've seen with my own eyes how the Moonie Times distorts things. It would have been nice if they had linked the actual CBO report, I dunno, SOMEWHERE in this focking article.

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Rosaria posted:

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I don't know how wide-scale this is, but I've been hiring workers individually for home improvement projects that once worked in the housing industry. They now are 'free-lance' and do a variety of jobs that previously they could not do because of site regulations. I'm having extensive work done on the bathroom in my home in Indiana including new flooring, electrical wiring, installation of a new shower and tub system, dry walling and moving a wall, plumbing, carpentry work installing built in shelves and vanity, ceramic tiling, etc. and if the people already hired can't do it, they know enough guys out of work to call to get the other jobs done. This is a very very small sample but very few of those guys have intentions of going back to the type of work they were doing before, or working for anyone else again.

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