Jobless Need Jobs, not More Benefits

By Daily Editorials

January 10, 2014 4 min read

There's no greater indictment of President Barack Obama's economic policies than the fact that, four years after the end of the recession, he's lobbying Congress for yet another extension of unemployment benefits.

Nearly 1.3 million jobless Americans were cut off from assistance on Jan. 1 when the extra benefits expired. That returned unemployment insurance to the normal 26 weeks instead of 99 weeks.

Normal is where things should be by now, considering the deep intervention of the federal government into the economy, and the amount of money spent to keep it stimulated.

But while the president continues to boast of the strength of the recovery, the truth is that this anemic comeback is not creating anywhere near the number of jobs it should be emerging from such a deep downturn.

In arguing for the extension, a White House official claimed there are still three job seekers for every available job. If that's true, the president must provide an answer beyond simply continuing to subsidize those who can't find work.

Last year, two-thirds of the new jobs created were part-time positions. A low-paying part-time job is not likely to tempt someone to give up an average $300-a-week in unemployment benefits to re-enter the workforce.

Employers say they are forgoing full-time hiring to avoid the health insurance mandates of Obamacare. But so far, the president has denied his Affordable Care Act is throttling employment.

The White House argues that not extending unemployment benefits will cost the economy 240,000 jobs. But considering that Obama and a Democratic Congress added more than $800 billion to federal spending when he took office five years ago, and maintained most of it, the claim that increased federal expenditures boost job creation doesn't hold water.

In fact, the non-partisan National Bureau of Economic Research concluded the lingering high post-recession jobless rate can be blamed mostly on extended unemployment benefits that discourage the search for work.

But rather than address the causes of slow employment growth, it is easier for Congress and the president to simply spend money the federal Treasury doesn't have.

While the president is arguing for a 3-month extension to take care of the unemployed "while we figure out a longer-term solution," the likelihood that the 99-week benefit term will become permanent becomes greater each time the extension is passed.

Another extension is inevitable. The Senate passed the measure Wednesday, and the House, though still holding out for offsetting cuts elsewhere, will eventually cave to deny Democrats an election year talking point.

Ultimately, quadrupling unemployment benefits will result in higher payroll taxes, and that will lead to fewer jobs, particularly in places like Michigan where unemployment still exceeds the national average. So the consequence of substituting sound economic policies with perpetual hand-outs will be high unemployment rates as the new normal.

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