AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (24 comments)

  1. We shouldn’t let emergency federal benefits expire because the same fundamental logic that led to their being (correctly) enacted still holds today“…

    So cementing down a leech society is somehow a good thing?

    I wonder if Strain would say that if ALL the money to finance this scam was coming out of his pocket?

    1. Try being a technical professional higher level employee in your late 50s. Jobs become even harder to find. I suspect that the ‘average’ time it takes to find a new job is well over a year, assuming you can find one at all.

      I’ve only had temp-work since LAST December, and the last of that was in July! And to do those, I’ve had to fall back to my skill-set (and pay level) of over 20-years ago! The HR drones seem to assume that your technical skills can’t be up-to-date, and that you’ll be retiring soon, so you aren’t worth hiring now. (Hey folks, my skills and knowledge are not only still cutting/bleeding edge, I went back to school for my Masters degree, and graduated in 2011!)

      I was actually told by a friend in HR at my former company that the head of HR had given the directive that no older-former employees were to be rehired because of the “close to retirement” issue. This despite the fact that they’d lost too many experienced employees, and didn’t have enough to train and mentor the “kids” fresh out of school that they were hiring. (I wish I’d been recording that conversation!) That’ll probably cost them millions as the new employees make the mistakes we “experienced” workers learned to avoid.

      My current ‘job’ is the job search, which I work at EVERY DAY! I’ve been told by more than one search/recruiting professional that the way I’m going about it is nearly the best that they’ve seen, and I’m not doing anything wrong. I’m just an expert in a technical field and too old.

      Oh, I’ll take back part of that. One recruiter said that I’d come across as TOO competent during an interview, and I’d scared the managers doing the interview because they were afraid I’d end up taking their jobs. In a company that was supposed to be expanding and growing, this shouldn’t be a ‘bad thing.’ But this may very well be the reason companies aren’t hiring many ‘older’ workers. Those doing the hiring are afraid that you’ll be better than they are and will replace them.

      The point is, WHEN I do find appropriate employment, any money spent on unemployment or training benefits will be paid back with interest in the form of taxes in a very short period of time. But I have to be able to hang on long enough for that to happen. The alternatives are likely to be defaults, mortgage foreclosure, and even more money spent from any other forms of public assistance.

      The simple fact is that some of us have to be able to hang on a bit longer for the various “investments” to pay off.

      1. These long term unemployment benefits have enabled you to do the very thing that you ought not be doing. That is to search for work in a field where your particular skill set is no longer valued at the price you believe it should fetch. I could care less has many “recruiters” told you are TOO competent or TOO skilled, the market says otherwise. As a person also in his fifties, I have changed career fields on more than one occasion, it’s not easy. We are at a time when career changes are becoming the norm. Those with adaptable skill sets will flourish, those without, wont. The argument that ever more social welfare benefits will change this reality is insane.

        1. Robotics, alternative energy systems, hybrid and electric vehicle engineering are no longer valued? Guess again.

          They’re currently building vehicle systems based on my designs in Detroit. Nearly every industrial robotics manufacturer uses my software and algorithms, and you can find machine vision algorithms I came up with in iPad/iPhone and Android APPS.

          Yes, I’ve already changed career paths over the years, or at least the technologies, but I’m still not only up to speed on ALL of them, I’m usually ahead of everyone else.

          1. Robotics, alternative energy systems, hybrid and electric vehicle engineering are no longer valued? Guess again“…

            OK who’s pushing and or funding alternative energy and electric cars?

      2. Do contract work, you usually get a job with a phone interview, can’t tell your age, unless you mention technologies from the 1930′s that no longer apply in your resume. I am 47 and not having trouble. I’ll let you know in three years.

        I find most people not finding jobs, in their 50′s are either not putting in the effort, or have personally stagnated, so they don’t get modern about looking for work. (Yeah, when I last found a job I just posted my resume on the Church bulletin.

        I have some friends who were were having trouble getting a job, and helped them get on track again. The biggest problem was actually getting them to change their attitude. Second was trying to convince them to take off some experience from the 80′s that they will never use again.

        1. Yes, that’s what I have been doing between other jobs, but there are even fewer of these lately. 100% travel, called in for emergencies when no one else can figure it out or less than ethical contractors just decide not to show up again leaving a mess, etc.

          No or minimal benefits, no career path/growth, limited time to continue the search for something better, extremely limited home and family time, missed opportunities because my own professional ethics won’t let me drop a job I’ve signed a contract to do before it’s finished, and as I mentioned, using a skillset developed 20-years ago.

          Why wouldn’t everyone like to live that way?

          1. You seem to be a highly skilled professional who had done a lot of great work. This is probably the toughest time in your life. As I am crossing into my 4th decade of life, reading your post had been a revelation. I better get very very busy!

            You may consider relocating. I had heard that high-tech manufacturing is moving up again and as you mentioned, in that kind of work, there is a real shortage of skilled talent.

            Good luck and please don’t lose hope!

          2. Thank you, Vitaly. I did have a very good face-to-face interview last week with a company I’d had previous interviews with, both on the phone and face-to-face, so there is certainly hope.

            Yes, I’m overqualified for the position that they “need” to fill, but I tried to emphasize how I could solve their current problem now, and still be an even more valuable resource and asset down the line.

            I’ve always ‘worn many hats’, and know their business like few others, but I didn’t point out that I could do practically any job at the company, from sweeping floors on up to the top. The aim is to get in the door, solve their current issues, and I can find out exactly what they need in other areas to show them what else I can do for them later.

            So, if necessary, you may have to ‘aim low’, with the hope and expectation at that you can work your way up again. At least that’s my hope this week.

            And for some of you others, with these short-term contract jobs I’ve had in the last few years, the unemployment benefits ran out long ago. I was just better prepared than most. So, while the extended benefits helped, they haven’t been a factor in my job search for many months now.

            I may yet be forced to take a job as a Radio Shack clerk again, or as a Walmart Greeter, as some of you seem to suggest that we long-term unemployed older workers do, but I’ll resist doing that for as long as I can.

  2. Unemployment benefits have been extented to lengths never seen before and GDP growth has been weaker in this recession than any post WWII recession. Do you think there might be a conection between paying people not to work and weak economic growth? Extending the incentive to not work will not help GDP growth or job growth. Why is this not obvious?

  3. Frank Mackey

    I find it curious that you object to $25 bn in EUC to people that cycle every penny through their local economy, but don’t say squat about the $200 bn monthly give away from the Fed to Wall Street in the form of QE/POMO.

    Are you afraid of the hyperwealthy, have an unhealthy bias against regular people or are simply uninformed?

    Let me help:

    $200 bn/mo > $26 bn/year

    Now for the tasty bit: In the eyes of true plutocratic elites, you bums are — at a distance — indistinguishable from the day laborers and Welfare cheats you abhor.

    LOLs abound, Jack.

    1. It is not a valid argument. To want to keep one bad policy because we have another bad policy is very bad policy. If your logic ruled the world, any bad step could never be corrected, because you could always point to some other bad step.

      Time to let this gravy train end. And Time to get rid of QE as well.

  4. mesa econoguy

    Your causality is backwards.

    We have far, far greater long term unemployed, because we have incentivized it

    http://research.stlouisfed.org/fred2/graph/?id=UEMPMED

    Until you disincentivize it, by removing long term unemployment benefits, and also remove the disincentives to form businesses which will employ those previously unemployed, the economy will not improve.

    This is not rocket surgery.

    1. One problem we have in society is that the upper middle class try to look out for the poor. As an upper middle class, I would look at $450 a week and say that no-one could live off of it, we should give more and give longer.

      Of course when you realize that for folks earning 12 – 15 bucks an hour they can get 80% of their former pay to just kick back. (esp when you consider UE doesn’t have payroll taxes removed) In fact in some states there is trouble getting lower pay workers to sign on, because they would rather kick back with 80% than to actually work for $12 an hour.

      1. mesa econoguy
        1. Let’s not forget thiis nugget that was also posted on Zero Hedge…

          The Other America: “Taxpayers Are The Fools… Working Is Stupid”… (audio clip)

          While what little remains of America’s middle class is happy and eager to put in its 9-to-5 each-and-every day, an increasing number of Americans – those record 91.5 million who are no longer part of the labor force – are perfectly happy to benefit from the ever more generous hand outs of the welfare state. Prepare yourself before listening to this… calling on her self-admitted Obamaphone, Texas welfare recipient Lucy, 32, explains why “taxpayers are the fools”…

        2. Todd Mason

          And if Mesa says it is correct, naturally it is not. The average unemployment check was $304 in 3Q 2013, compared with a average weekly paycheck of $868, (BLS numbers.) That’s a replacement rate of 35 percent.

          Ever wonder what happened to Gary Alexander, the Pa welfare secy who penned the failure of the welfare state for AEI? He quit to pursue “private sector interests”.

          “His decision to consolidate with one Boston-based company payments to those who provide care for the disabled led to thousands of low-wage home health workers’ failing to get their paychecks for months. That contract was faulted by Auditor General Eugene DePasquale, who found the consolidation cost taxpayers millions.”

          http://articles.philly.com/2013-11-25/news/44416073_1_medicaid-expansion-medicaid-system-former-pa

          Turns out he never moved from RI, instead billing the state for 21,000 miles of commuting expense.

          1. mesa econoguy

            Turd, I think you forgot to mention that Thanksgiving fell on a Thursday this year.

            The numbers in the PA article are correct, and I’m pretty sure you don’t want to be quoting BLS stats too actively.

            Did you receive an early Christmas present of extra stupid pills from your whore wife?

          2. The average is not meaningful. The unemployment benefits are skewed so those with lower income get a greater percentage of take home benefits than those with higher income. I would get maybe 25% but those who are in the lower tiers get up to 80%.

            Getting 80% replacement for your income is quite significant, and doesn’t encourage folks to look for work. This is for people who earn around $15 per hour.

            And I have to say, even though unemployment would replace only 25% of my income, if I were still single and renting a small apartment, I could still live off it rather comfortably. (In fact I live on less then I would get on UE now – I have to keep a separate residence for my employment and spend about $1750 a month on all my expenses including a monthly plane ticket home – UE would give me $1800)

          3. Todd Mason

            OK, here are actual samples by the BLS of UI claimants in the 50 states, http://workforcesecurity.doleta.gov/unemploy/docs/repl_FY13.txt

            Note that only ND has a higher average than $380 ($390), and that only PA replaces more than 50 percent.

            Most states aim to replace 50 percent of wages, subject to maximum and minimum amounts. While it is possible to get above 50 percent replacement if the minimum applies, $45/week won’t get you far even in AL.

            This is state specific, and there’s a big difference between MA and MS, But if there is a state that pays $380 in benefits to a worker formerly making $480, as Marque2 claims, I’d like to see it. Seriously. Most states have benefit calculators on line.

          4. I am not going to look at all states, but I can tell you in California it works out to about 60% of take home pay.

            http://www.edd.ca.gov/pdf_pub_ctr/de1101bt5.pdf

            You need to remember, just because someone earns 12 an hour, they don’t take home that amount. I would say about 85% is what is taken home after SSA, state taxes, and various other crap is removed.

            As an example
            $12 per hour is 6240 in a quarter. This would give a person 241 a week. (241 * 13)/(6240 *.85) gives you 59%

            Still good enough for a $12 earner to choose to stay home and sit on ones ass. While unemployed you can also get other benefits like food stamps, and WIC and even a housing allowance, which can make the amount you get close to 100%. I even partook of WIC once. Tried for foodstamps, but I would have had to fight for it in their special court, since the folks in the office aren’t aware of their own laws. By the time the date came around, I already had a job.

          5. Todd Mason

            In most states, you start at 50 percent before withholding (yes, 10 percent for federal taxes.) In CA, a $12/hr worker with a wife and child already qualifies for food stamps.

            What’s more, average is, well…. closer to average. One doubts that 35 cents on the dollar is sufficient incentive to stay home,

            Finally, since we’re talking l-t unemployed, demographics enter the mix. They tend to be older, male, poorly educated and concentrated geographically. (Tier 4 is down to three states: Nevada, Michigan and Rhode Island.) It’s hard overstate the the importance of a healthy housing industry in a healthy job market (quality blue collar jobs that can’t be automated or outsourced.)

  5. I collected Dec09-Jan-Feb10 at the bottom of the recession. I cut my expectations(in half) and began working in March. The $325/week was not an incentive to delay working for 11 weeks. The resistance to adjust expectation is different for each and there is still a degree of optimism that says things will improve. Unless your industry is healthcare, education or government, things are what they are. Capitulate.

  6. Kathy Martin

    I have been receiving regular unemployment benefits. I have been searching hard this entire time. I have spent a lot of my money on gas to search and for interviews. Now that I will no longer get benefits, I do not know how I am going to survive or find a job. If I get a call for an interview or get a job I will not have any money for gas to get there. I am not lazy and not trying to rely on the government. I just need help to get where I need to be. This is what makes people just want to give up. I am not college educated and just want to support myself and my daughter. The government is just willing to help big business and the rich. What about us that want to take care of ourselves but just need a little help to get going

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