The unemployedPublished 10:11pm Monday, January 20, 2014
To the Editor:
A recent contribution to the Sound Off section of the Washington Daily News stated, in part, that the North Carolina Republicans “voted against people getting extended unemployment insurance” and “making it hard against the president.” (Incidentally, 1/4 of the Democrats voted with the Republicans.)
The Unemployment Insurance Program is designed to help soften the impact of a poor economy by providing temporary income for laid off workers. The standard benefit program allows for 26 weeks of unemployment insurance. During periods of prolonged economic slowdown, there are two programs for extending unemployment insurance benefits: Emergency Unemployment Compensation and Extended Benefits. The EUC includes a four-tiered program for extending unemployment benefits beyond the standard 26 weeks. These tiers, each extending unemployment for weeks at a time, total 46 weeks of EUC. That makes a total of 72 weeks or 1.4 years. The North Carolina law lowers the amount of benefit and shortens the benefit duration.
In the majority of states, benefit funding is based solely on a tax on employers. Consequently, more taxes on employers equal fewer jobs. Reuters indicated, “making the state’s unemployment fund solvent will unburden businesses that are paying higher federal taxes because of the debt and will in turn free them to hire more workers.”
Furthermore, when states lack the funds to pay extended unemployment insurance benefits, they may obtain loans from the federal government – a debt that must be repaid. This Federal lending requires funding through additional borrowing or extra taxes. That means more national debt and more burden on American taxpayers. The new law is intended to end the vicious cycle of spend and tax.
Additionally, studies show that extensions of unemployment insurance benefits serve as a disincentive for unemployed workers to search for jobs. Research by the Federal Reserve Bank of Philadelphia showed that extensions of unemployment insurance benefits contributed to an increase in the unemployment rate by 1.2 percent (about 3.6 million people). The study stated: “It is possible that the extensions themselves contributed to the rising unemployment rate by encouraging jobless workers to remain unemployed and by discouraging the unemployed to search for a job more intensively.” Forbes magazine cites a recent White House report that also admits that extended unemployment benefits raise the unemployment rates.
One might ask where is the compassion for the unemployed. That is a question more suitably directed to the federal government regarding spending programs appropriated by Congress. There is an abundance of wasteful pork barrel programs that cost the taxpayers billions of dollars and do very little for the average unemployed worker.
The unnamed Sound Off contributor also mentioned “now they are making it hard against the president.” Does the president demonstrate compassion for the unemployed without some underlying political motive? Shouldn’t the compassion come from the one whose policies are responsible for the poor economy? While the North Carolina’s unemployment rate sits at a staggering 9.2 percent (nationwide about 7 percent), the president takes a 17-day vacation to Hawaii, staying at an oceanfront home costing taxpayers $24,500 a week. Last year’s Hawaiian vacation for the president cost taxpayers over $4,000,000 while the unemployment rate stood at 10 percent. Remember, the extended unemployment benefits, like the president’s expensive vacations, are funded by the American taxpayer. They are not “making it hard against the president,” he is “making it hard” for the American people.