Wednesday, February 17, 2010
Penalized for Working
Why attempt part time jobs with faulty systems in place such as the one explained in this article. The unemployment system is set up in such a way it does not make sense for many to look for part-time work because of the damage it will do to their current benefits. People around the United States are finding that if they take a seasonal part time job with minimum income it will cost them more money then staying unemployed. These types of kinks result in much higher unemployment rates because it simply does not make financial sense to go back to work unless it is an established full-time job on salary pay.
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This article is a good demonstration of how unemployment benefits slow the rate of job finding by decreasing the opportunity cost of being unemployed. The current system is further contributing to unemployment because it discourages workers from taking short term, low paying jobs (but jobs nonetheless). It seems paradoxical to me that the government is trying to decrease unemployment, but at the same time expanding unemployment benefits.
ReplyDeleteI agree with Hayley in saying that unemployment benefits only prolong the period of job finding however on the other hand being penalized for working part-time jobs seems absolutely absurd to me. I understand the theoretical problems of unemployment benefits however in the current economic climate, I truly believe that all unemployed workers are actively pursuing employment and their desire to work, even part-time jobs shows initiative.
ReplyDeleteHowever to penalize workers for working part-time will only add to the period of unemployment because they will not attempt to work part-time jobs and rather sit and continue to collect their benefits until a full-time job opens up. Considering the current issues in the economy, this may turn out to be a prolonged period of unemployment benefits that the government will have to continue to pay.
This unemployment benefit program is not suppose to last longer than 30 weeks, let alone a year. Obviously the special circumstances of the recession have put a lot of pressure on this system, along with many others. Unemployment programs are not a tool to decrease unemployment, but rather to boost or maintain consumer spending for the frictionally unemployed. The benefit of increased/maintained consumer spending must outweigh the longer durations of unemployment, otherwise i doubt unemployment benefit programs would be in place.
ReplyDeleteKyle, these workers are not being penalized because if a worker in Mass. does not work at least part-time during that first year of unemployment, then he/she would stop receiving benefits all together in the second year, so the worker would not be motivated to sit around longer than the first year of unemployment benefits. Some is better than none for many of the unemployed.
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ReplyDeleteThis article somewhat upset me, but it was interesting as well. I agree with the above statements that unemployment benefits is only prolonging the unemployment problem at hand. Where is the line drawn for taking advantage of the system?
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