Search Our Site

Custom Search

May 28, 2010

Why Work When You Can Collect Unemployment

 Note: No blog Monday due to the holiday.  We will return with more long articles on Wednesday.

Unemployment benefits were created to “help” people who lost their jobs pay their vital bills while seeking employment.  As usual, this liberal economic policy has its share of unintended consequences.  This consequence happens to be that Americans are choosing not to go back to work in favor of continuing to collect unemployment.  Why is this?
I first heard about the turning down of employment in favor of unemployment benefits through an acquaintance and decided to do some research.
First, I found an article in the Wall Street Journal about a woman’s husband who lost his job and was offered an “inferior” job.  Was he required to accept the position or lose unemployment benefits?  According to the article,
None of this is to say that your husband has to take this particular lower-paying job. While one of the requirements for receiving unemployment insurance is to be actively looking for work, there is no requirement that one must accept "inferior" employment, according to Judy Conti, federal advocacy coordinator with the National Employment Law Project (NELP), an advocacy group based in Washington, D.C.”
I then found an odd story out of Michigan.  A Michigan landscaping company was having trouble hiring employees.  A company will have trouble offering low income jobs if there is a labor shortage.  But, we are talking about Michigan and we are talking about the second worst recession in the past 100 years.  So why are they having trouble?
According to that article,
“But B&L Landscaping in Oak Park finds the labor pool is noticeably weaker and less motivated, director Richard Angell said, even though the company still gets 80 to 100 applicants per week.  "We're just getting people coming in, filling out paperwork, hoping they won't get hired," Angell said. "... We're having a hard time finding quality applicants.”  Gaming the system is "not surprising, but the question is how prevalent it is," the Unemployment Insurance Agency's Geskey said. "My gut tells me it may happen, but under the law, that person's benefits need to end."

Pennsylvania has a policy that your unemployment benefits will end if you turn down a position that you are “capable of working.”  That has not stopped people from turning down suitable employment opportunities to remain on unemployment benefits.

While many may find these as rare exceptions, there are more.  For example, Fox Nation reported:

“Administrative assistant Vicky Fonseca says she wants to work- but she doesn't want to work just anywhere.  "I want good benefits,"Fonseca said. "I wouldn't want to work somewhere where I didn't feel comfortable."  Some would say beggars shouldn't be choosers.  But when Uncle Sam is paying you $300 a week with virtually no strings attached, job seekers can afford to turn offers down.  And Fonseca has.  "I had an offer but it was in Broward County," Fonseca said. "It is too far for me and the pay rate is not going to be enough."

Despite these documented incidents and plenty more, our elected officials have extended unemployment benefits further.  This will expand and encourage the above types of behavior.  Therefore, when I work on my economic forecast later this summer, I will be adding to my projected unemployment rate as a result of these incentives.  By the way, if you are unemployed, please watch today’s video to determine if you are actually counted in the government’s version of the “unemployment rate.”

Popular This Month