Senate Republicans on Capitol Hill continue to filibuster a bill to extend unemployment insurance benefits for more than 1.2 million jobless Americans and left Washington D.C. last Friday, without caring one jot about those they are supposed to serving. Republicans like Florida’s Senator George LeMieux argue that extending the unemployment benefits would worsen the budget deficit and that’s a bad thing. Others of the GOP suggest that unemployment benefits would serve as a disincentive for the unemployed to look for jobs.
But Professor Paul Krugman, American economist and Nobel Prize Winner, notes the following:
Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.
But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.
Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.
Yes, extending the unemployment benefits would worsen the deficit, but only slightly. As Krugman says, “penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.”
The heartless, uncaring Republicans sitting in Congress should do the right thing and extend the unemployment benefits for those many Americans who want to work, but who cannot, because there are NO jobs.
