Saturday, May 7, 2011

NC Republicans callous inaction on jobless benefits

Republicans in the NC General Assembly still have not gotten around to passing legislation necessary for 37,000 long-term out-of-work North Carolinians to collect an extra 20 weeks of federally-funded unemployment benefits.

Last month, the Republicans tried to use the extension to extort Governor Perdue into committing to double-digit percentage budget cuts for the coming fiscal year. The governor, rightly, vetoed the legislation and asked for a clean bill. The extension has subsequently languished.

Regrettably, Republicans' general callousness towards the poor isn't new or surprising. However, once upon a time, Republicans did at least try to show support for workers who lost their jobs, a group they included among "deserving poor." No more.

As the Republican Senate Leader, Phil Berger said, "We need to remember that we're talking about the extension for folks who have already received benefits" for a year and a half.

Moral and humanitarian concerns notwithstanding, Republicans should be able to grasp the practical, economic benefits of hundreds of thousands of federal dollars flowing into a state that still suffers from 9.7 percent unemployment. But again, no.

Since benefits ran out, Republicans have found the time to adopt resolutions recognizing the 100th anniversary of North Carolina Family and Consumer Sciences, a former representative, and Cinco de Mayo.

These are priorities, but legislation that would help the long-term jobless and bolster our economy, all without costing our state budget a dime is not.

6 comments:

tarheelred said...

Moral and humanitarian concerns notwithstanding, Republicans should be able to grasp the practical, economic benefits of hundreds of thousands of federal dollars flowing into a state that still suffers from 9.7 percent unemployment. But again, no.


How long should we continue to pay people not to work?

26 weeks not enough?
52? Maybe more?
99 STILL not enough?

At what point, Dave, is enough enough?

Dave Ribar said...

Pino:

The Republicans in the legislature aren't making that argument. Their legislation implies that the federal extension is a good idea so long as it's accompanied by large state budget cuts.

If Republicans don't think that long-term unemployed people in North Carolina should get those last 20 weeks of help, they should come out and say so.

2/5ths of unemployment spells currently last more than half of a year, and the average length of an unemployment spell currently is just over 38 weeks. In the current economy, offering assistance through 99 weeks seems reasonable.

To provide better employment incentives in the UI program, I've recommended offering re-employment bonuses.

That said, we're not talking about exceptionally generous benefits. The average weekly benefit in NC is $297, which is less than the poverty threshold for a family of three.

tarheelred said...

The Republicans in the legislature aren't making that argument. Their legislation implies that the federal extension is a good idea so long as it's accompanied by large state budget cuts.

Or they're saying "We don't think it's a good idea BUT we're willing to go along if you're willing to compromise on other issues".

It seems as if the Republicans are quite willing to let the benefits stop.

2/5ths of unemployment spells currently last more than half of a year, and the average length of an unemployment spell currently is just over 38 weeks. In the current economy, offering assistance through 99 weeks seems reasonable.

I suspect that's related to the duration of the benefits.

See here:

http://tarheelred.wordpress.com/2010/11/17/99-weeks-ending-soon/

Dave Ribar said...

Pino:

The spike that appears in the hazard rate in your graph is a common finding in studies that examine the exhaustion of UI benefits.

However, hazard rates need to be interpreted with care--especially hazard rates late in a spell--because they are conditional probabilities. The 29 percent hazard probability at benefit exhaustion only applies to people who had been unemployed for 51 weeks. From the graph, it appears that only about 10-13 percent of people were unemployed for 51 weeks. Of that 10-13 percent, 29 percent (3-4 percent of those who were initially unemployed) found work immediately, but 71 percent did not. The hazard probabilities are higher after benefits run out, but only slightly so.

No serious economist disputes that more generous unemployment insurance (higher or extended benefits) contributes to longer unemployment spells. However, the incentive effect appears to be very modest, even in the graphs that you present.

pino said...

The Republicans in the legislature aren't making that argument. Their legislation implies that the federal extension is a good idea so long as it's accompanied by large state budget cuts.

I think they are. They're saying that these benefits are not healthy. However, in the name of compromise, there are other areas that we wanna cut, so, in some way, the Dems can choose. Save money on bennies or save money on schools-you pick. But we're gonna save!

2/5ths of unemployment spells currently last more than half of a year, and the average length of an unemployment spell currently is just over 38 weeks. In the current economy, offering assistance through 99 weeks seems reasonable.

Except that people don't go back to work until their benefits end:

http://tarheelred.wordpress.com/2010/11/17/99-weeks-ending-soon/

Dave Ribar said...

Pino:

Compromise over what savings? The extended benefits (as well as the EUC benefits) are currently 100% federally funded. If anything, allowing the federal extension would help the state budget by bringing more funds in ($11 million per week). Failing to pass the enabling legislation doesn't improve the state budget situation one bit.