Tuesday, January 19, 2010

Time Magazine thinks that extended unemployment benefits may increase joblessness

According to a recent story in Time Magazine, there is "a Limit to Compassion". The article figures that with extending the unemployment benefits for up to 99 weeks, congress and the president actually provides the jobless incentive to wait around for jobs---not taking low-paying jobs or a position that would require you to relocate.

Because there's evidence that the extensions are only prolonging joblessness. Today's unemployment rate remains high not because of mass layoffs — most of which happened early last year — but mainly because more people are remaining unemployed for longer periods. In academic parlance, the "exit rate" from the unemployment pool is only around 21%, compared with 34% during the last harsh recession, in 1982.

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