Unemployment Benefits - Disincentive?

Mach · Nov 10, 2009

Are unemployment benefits (mandated) appropriate for the U.S. economy?

Is this not just a disincentive to:
1. finding new work quickly
2. work odd jobs and multiple jobs in the mean-time
3. save for a rainy day

etc.? What tangible benefit does it have for our society?

Anecdotally just last week we offered a 3 week, well paid temp job to someone who at first accepted, then backed out because they looked at the unemployment they were getting (longer than 3 weeks), and in total it was enough to make it in their best interest not to work. I mean, really? Our economy incentivizes not working?

Yossarian · Nov 11, 2009

Yeah that does sound kinda dumb.

Dole-bludging should be discouraged, but over here in Oz folks've got it even easier. They can be on welfare indefinitely. Imo, unemployment benefits should be closely monitored or reduced (maybe) to prevent the examples above.

Agnapostate · Nov 11, 2009

Unemployment benefits are an important means of reducing static inefficiency through their reduction of underemployment. By provision of a means for the unemployed to extend their job search period and compensate for the natural search frictions present in every labor market, appropriate skills set matches with employers will be ensured.

TacticalEvilDan · Nov 11, 2009

Mach said:
Are unemployment benefits (mandated) appropriate for the U.S. economy?

Is this not just a disincentive to:
1. finding new work quickly
2. work odd jobs and multiple jobs in the mean-time
3. save for a rainy day

etc.? What tangible benefit does it have for our society?

Anecdotally just last week we offered a 3 week, well paid temp job to someone who at first accepted, then backed out because they looked at the unemployment they were getting (longer than 3 weeks), and in total it was enough to make it in their best interest not to work. I mean, really? Our economy incentivizes not working?

I don't personally know any people with families and responsibilities who can pay the bills and put food on the table with unemployment benefits (which in New York top out at about $200 a week), so I fail to see how it's a large-scale disincentive for anything except finding a job ASAP.

Mach · Nov 11, 2009

Agnapostate said:
Unemployment benefits are an important means of reducing static inefficiency through their reduction of underemployment.

How do such benefits reduce underemployment? In this anecdotal case, they added to underemployment. As a general rule, they are an incentive NOT to get employed. And employers foot the bill.

By provision of a means for the unemployed to extend their job search period and compensate for the natural search frictions present in every labor market, appropriate skills set matches with employers will be ensured.

Why don't individuals pay for their own insurance, if they want it, like most other insurance? Specifically, I don't want unemployment insurance as an individual, and never have wanted it. I also don't want to pay for it as an employer. I also don't want to pay for it, and watch people NOT take productive jobs as apparently a direct result of it.

Anyone unemployed can likely find part-time work or a mix of low paying jobs to tide them over if they are unable or are unwilling to save up enough to ride out job loss. It's better for society, for employers that need part time but skilled employees, and for everyone because we don't have welfare handing out bonuses to people who lose their jobs for whatever reason.

I don't want to pay for someone elses health care, I don't want to pay for them losing their job. I DO want to have government regulate to some degree who employers can hire/fire, I DO want government to regulate insurance companies.

Mach · Nov 11, 2009

TacticalEvilDan said:
I don't personally know any people with families and responsibilities who can pay the bills and put food on the table with unemployment benefits (which in New York top out at about $200 a week), so I fail to see how it's a large-scale disincentive for anything except finding a job ASAP.

The scale of the disicentive is less relevant than the fact that employers pay for this insurance. If individuals pay, they can choose none, some, or some hardcore insurance that pays them near-full pay.
Same with disability, why not unemployment?

phattonez · Nov 11, 2009

Mach said:
How do such benefits reduce underemployment? In this anecdotal case, they added to underemployment. As a general rule, they are an incentive NOT to get employed. And employers foot the bill.

Agna means that people will be less desperate and will find a better job if they're unemployed longer.

So if you get welfare your whole life, you could find the perfect job! Let's try it!

TacticalEvilDan · Nov 11, 2009

Mach said:
As a general rule, they are an incentive NOT to get employed.

How much does unemployment net you where you're living? :lol:

Mach said:
And employers foot the bill.

Absolutely true, here in New York employers who terminate without cause foot the bill. Seems reasonable.

Mach said:
Why don't individuals pay for their own insurance, if they want it, like most other insurance? Specifically, I don't want unemployment insurance as an individual, and never have wanted it. I also don't want to pay for it as an employer.

Here in New York, the state uses unemployment insurance rates to supplement tax shortfalls without raising taxes.

Governments love revenue generation, no matter what the reason.

Mach said:
I also don't want to pay for it, and watch people NOT take productive jobs as apparently a direct result of it.

:lol:

Mach said:
Anyone unemployed can likely find part-time work or a mix of low paying jobs to tide them over if they are unable or are unwilling to save up enough to ride out job loss.

Which comes with the same problem unemployment insurance does -- doesn't pay the bills.

Mach said:
It's better for [...] everyone because we don't have welfare handing out bonuses to people who lose their jobs for whatever reason.

Bonuses. Hoo, boy! :lol:

Mach said:
I don't want to pay for someone elses health care, I don't want to pay for them losing their job.

News flash: When someone else is screwed and tattooed, you end up paying for it one way or the other, government program or not.

TacticalEvilDan · Nov 11, 2009

Mach said:
The scale of the disicentive is less relevant than the fact that employers pay for this insurance. If individuals pay, they can choose none, some, or some hardcore insurance that pays them near-full pay.
Same with disability, why not unemployment?

Does such a product exist commercially?

phattonez · Nov 11, 2009

TacticalEvilDan said:
How much does unemployment net you where you're living? :lol:

Any amount of money is a disincentive. The amount of money only changes the magnitude of that disincentive.

Absolutely true, here in New York employers who terminate without cause foot the bill. Seems reasonable.

There's always a reason. Seems unreasonable.

Here in New York, the state uses unemployment insurance rates to supplement tax shortfalls without raising taxes.

Governments love revenue generation, no matter what the reason.

Most people would call that unethical, but I guess not New York.

Which comes with the same problem unemployment insurance does -- doesn't pay the bills.

A job is supposed to pay the bills, not the things in-between, otherwise those would be your permanent jobs.

News flash: When someone else is screwed and tattooed, you end up paying for it one way or the other, government program or not.

No I don't.

TacticalEvilDan · Nov 11, 2009

phattonez said:
Any amount of money is a disincentive. The amount of money only changes the magnitude of that disincentive.

I dispute that. Any amount of money is only a disincentive if you're so corrupt that you don't care that you can't meet your obligations.

Unemployment, for me, was a way by which I could prevent the starvation of my family while I found work. The bills that piled up kept it from being any kind of a disincentive.

phattonez said:
There's always a reason. Seems unreasonable.

I don't know what you mean, but my response was a reference to the idea of "just cause" in New York. If the boss fires you for skipping out or not showing up, that's just cause. If the boss fires you for something which has nothing to do with job performance, you get unemployment.

phattonez said:
Most people would call that unethical, but I guess not New York.

Every government plays this game at some time or other, it's only a question of magnitude and frequency.

phattonez said:
No I don't.

Yes, you do. You are not an island.

phattonez · Nov 11, 2009

TacticalEvilDan said:
I dispute that. Any amount of money is only a disincentive if you're so corrupt that you don't care that you can't meet your obligations.

Unemployment, for me, was a way by which I could prevent the starvation of my family while I found work. The bills that piled up kept it from being any kind of a disincentive.

I never said that it would be a popular disincentive at all levels, but it will be a disincentive no matter what. At some point the disincentive will become negligible, you are right about that.

I don't know what you mean, but my response was a reference to the idea of "just cause" in New York. If the boss fires you for skipping out or not showing up, that's just cause. If the boss fires you for something which has nothing to do with job performance, you get unemployment.

So if the product that you're making no longer turns a profit, then it's not just for you to be fired?

Every government plays this game at some time or other, it's only a question of magnitude and frequency.

It doesn't matter, it's still wrong.

Yes, you do. You are not an island.

Well prove it then, don't just stand here repeating something that isn't self-evident.

Whip Comes Down · Nov 11, 2009

Mach said:
Are unemployment benefits (mandated) appropriate for the U.S. economy?

Is this not just a disincentive to:
1. finding new work quickly
2. work odd jobs and multiple jobs in the mean-time
3. save for a rainy day

etc.? What tangible benefit does it have for our society?

Anecdotally just last week we offered a 3 week, well paid temp job to someone who at first accepted, then backed out because they looked at the unemployment they were getting (longer than 3 weeks), and in total it was enough to make it in their best interest not to work. I mean, really? Our economy incentivizes not working?

On November 5, 2009, the House passed a $24 billion extension of unemployment insurance benefits on a 403-12 vote.

On November 6, 2009, the Senate voted 98-0 Wednesday to provide continued relief to the estimated 15 million Americans currently drawing unemployment benefits.

TacticalEvilDan · Nov 11, 2009

phattonez said:
I never said that it would be a popular disincentive at all levels, but it will be a disincentive no matter what. At some point the disincentive will become negligible, you are right about that.

It's almost like your entire "disincentive" argument is based on Zeno's Paradox. :lol:

phattonez said:
So if the product that you're making no longer turns a profit, then it's not just for you to be fired?

Not in the parlance of unemployment, since no action of yours justified your termination.

phattonez said:
It doesn't matter, it's still wrong.

Not disagreeing.

phattonez said:
Well prove it then, don't just stand here repeating something that isn't self-evident.

:lol:

Oh, brother.

If you aren't aware of the fact that the events of your life are not intimately connected to the events in the lives of others, even complete strangers whom you will never meet, then I'm not sure I can explain it to you.

I'm not even speaking metaphysically, I'm talking about today, in the United States, a nation whose economy and sociology is so interlinked and so interdependent that everybody feels the ripple-effect from everybody else even if they don't perceive it.

phattonez · Nov 11, 2009

Whip Comes Down said:
On November 6, 2009, the Senate voted 98-0 Wednesday to provide continued relief to the estimated 15 million Americans currently drawing unemployment benefits.

Congratulations, that doesn't even respond to what he was saying.

phattonez · Nov 11, 2009

TacticalEvilDan said:
It's almost like your entire "disincentive" argument is based on Zeno's Paradox. :lol:

If I offer $500 to people who will pick oranges in my backyard, I'll get a certain number of people to do it. If I offer $1000, I'll get even more people. Now presumably, I won't ever get a negative number of people to work for me, so the incentive must approach 0 (probably at $0 assuming that there are no other benefits to picking oranges). So even as I approach offering no money, there will be an incentive, just getting closer to being a negligible incentive.

In the same way, if you get paid $1000 not to work, you might consider it. $500, you'll consider it less. You will consider it less and less until you get to $0 when you will not consider it at all (assuming no other benefits to not working),.

Not in the parlance of unemployment, since no action of yours justified your termination.

If I'm an employer, what exactly is so terrible that I did that the employee deserves to continue to be paid? His product wasn't worth his salary anymore, so I dumped him. It's just business, I'm not running a charity.

:lol:

Oh, brother.

If you aren't aware of the fact that the events of your life are not intimately connected to the events in the lives of others, even complete strangers whom you will never meet, then I'm not sure I can explain it to you.

I'm not even speaking metaphysically, I'm talking about today, in the United States, a nation whose economy and sociology is so interlinked and so interdependent that everybody feels the ripple-effect from everybody else even if they don't perceive it.

Yeah, I have influence on others, that's great. How do I pay for their misfortune?

TacticalEvilDan · Nov 11, 2009

phattonez said:
If I offer $500 to people who will pick oranges in my backyard, I'll get a certain number of people to do it. If I offer $1000, I'll get even more people. Now presumably, I won't ever get a negative number of people to work for me, so the incentive must approach 0 (probably at $0 assuming that there are no other benefits to picking oranges). So even as I approach offering no money, there will be an incentive, just getting closer to being a negligible incentive.

In the same way, if you get paid $1000 not to work, you might consider it. $500, you'll consider it less. You will consider it less and less until you get to $0 when you will not consider it at all (assuming no other benefits to not working),.

Like I said. :lol:

phattonez said:
If I'm an employer, what exactly is so terrible that I did that the employee deserves to continue to be paid? His product wasn't worth his salary anymore, so I dumped him. It's just business, I'm not running a charity.

You didn't do anything terrible. You made a decision that had nothing to do with the employee's performance.

phattonez said:
Yeah, I have influence on others, that's great. How do I pay for their misfortune?

Much same way that someone who lives next door to you saps the value of your property by not taking care of theirs.

phattonez · Nov 11, 2009

TacticalEvilDan said:
Like I said. :lol:

So you can't assume that there will be no incentive just because it seems low to you.

You didn't do anything terrible. You made a decision that had nothing to do with the employee's performance.

And employers pay part of unemployment, don't they?

Much same way that someone who lives next door to you saps the value of your property by not taking care of theirs.

But then I get the added benefit when he takes care of it very nicely. Who's going to pay him for that?

TacticalEvilDan · Nov 11, 2009

phattonez said:
So you can't assume that there will be no incentive just because it seems low to you.

Sure thing, Zeno.

phattonez said:
And employers pay part of unemployment, don't they?

Yes they do, at rates based on their employee turnover.

Those whose practices result in a higher rate of legitimate claims pay more into the system.

phattonez said:
But then I get the added benefit when he takes care of it very nicely. Who's going to pay him for that?

Listen, if you want to argue individual scenarios all day long, the mirror's over there, but I made my point.

Mach · Nov 11, 2009

TacticalEvilDan said:
Absolutely true, here in New York employers who terminate without cause foot the bill. Seems reasonable.

So it's the employers fault the bottom dropped out of the economy and they had to do layoffs? Please.

Here in New York, the state uses unemployment insurance rates to supplement tax shortfalls without raising taxes.
Governments love revenue generation, no matter what the reason.

Right, more reason to remove it. If they have access to it, they will spend it.

Which comes with the same problem unemployment insurance does -- doesn't pay the bills.

Oh the horror, my payments into the money someone gets doesn't pay for their cable, or their unaffordable house, or irresponsible energy usage, or eating out? Was this an argument for or against, I can't tell

News flash: When someone else is screwed and tattooed, you end up paying for it one way or the other, government program or not.

Not if I did the screwing, I can net profit, and so can they

That fact is, people who save, live below their means, do well at any job, are actively seeking good, long term, career growth, in industries that they don't think are going away, typically do fine. Those that don't worry about any of that, are paid *some* by employers, basically to heave that way. So the people that do it right, get nothing. And the screw-ups, be it inetional or not, get the benefit.

It does incentivize companies to be more selective at hiring, but that has it's drawbacks too.

Mach · Nov 11, 2009

Whip Comes Down said:
On November 5, 2009, the House passed a $24 billion extension of unemployment insurance benefits on a 403-12 vote. On November 6, 2009, the Senate voted 98-0 Wednesday to provide continued relief to the estimated 15 million Americans currently drawing unemployment benefits.

Relevance?

I also believe a widespread economic recission of this magnitude is more justifiable for federal assistance (emergency assistance). Its' neither the employers fault, nor the employees in many cases.

But I don't pay unemployment some of the time, I pay it all of the time.
Employees outnumber employers, why would a majority surprise you?

phattonez · Nov 11, 2009

Mach said:
So it's the employers fault the bottom dropped out of the economy and they had to do layoffs? Please.

Right, more reason to remove it. If they have access to it, they will spend it.

Oh the horror, my payments into the money someone gets doesn't pay for their cable, or their unaffordable house, or irresponsible energy usage, or eating out? Was this an argument for or against, I can't tell

Not if I did the screwing, I can net profit, and so can they

That fact is, people who save, live below their means, do well at any job, are actively seeking good, long term, career growth, in industries that they don't think are going away, typically do fine. Those that don't worry about any of that, are paid *some* by employers, basically to heave that way. So the people that do it right, get nothing. And the screw-ups, be it inetional or not, get the benefit.

It does incentivize companies to be more selective at hiring, but that has it's drawbacks too.

I can't believe that I'm agreeing with you. I never would have thought the day would come.

TacticalEvilDan · Nov 11, 2009

Mach said:
So it's the employers fault the bottom dropped out of the economy and they had to do layoffs? Please.

You can't blame the employer for the bottom falling out of the economy, but it is their responsibility to guide the business through choppy economic waters. That's the difference between upper management, who get higher compensation and more authority, and grunts, who have unemployment to fall back on.

Mach said:
Right, more reason to remove it. If they have access to it, they will spend it.

The function is necessary. However, I would be more comfortable with a private insurance model, so that the state couldn't dip into the insurance revenues to make up shortfalls.

Mach said:
Oh the horror, my payments into the money someone gets doesn't pay for their cable, or their unaffordable house, or irresponsible energy usage, or eating out? Was this an argument for or against, I can't tell

Har har har. I didn't have cable (or a working television), or an unaffordable house, I turn off the lights when I leave the room, I keep my heat turned down, I live 15 minutes from work, and I still couldn't pay the bills on unemployment insurance.

I wasn't living high on the hog, I was just barely hanging on, so forgive me for flipping you the bird, but I am most definitely flipping you the bird.

Mach said:
That fact is, people who save, live below their means, do well at any job, are actively seeking good, long term, career growth, in industries that they don't think are going away, typically do fine.

... and some people, like me, still end up on the short end. That's what unemployment insurance is meant for.

phattonez · Nov 11, 2009

TacticalEvilDan said:
Sure thing, Zeno.

Whatever troll. I can't help if you don't understand a curve.

Yes they do, at rates based on their employee turnover.

Those whose practices result in a higher rate of legitimate claims pay more into the system.

How is it legitimate? The economy changes, that's not the employer's fault. Ever heard of seasonal unemployment? Demand for things change over the years. Do you think we have as many candle makers as we did back in the day? Is that a bad thing?

Listen, if you want to argue individual scenarios all day long, the mirror's over there, but I made my point.

If you want to argue externalities, you also have to recognize positive externalities.

mikhail · Nov 12, 2009

The attempts to monitor and people having personnel advisors are a much bigger waste of money from the public purse IMO.I havent met any of these people who people claim are living the high life on benefits.

Unemployment Benefits - Disincentive?

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