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'A Chart That Screams, "Extend Unemployment Benefits!" '

You'll have to excuse me for simply stealing Daniel Indiviglio's headline for this chart, but it's really the right way to introduce it:

job openings vs jobless 2010-05-thumb-570x326-29516.png

"That giant gap consists of Americans who are unemployed, and couldn't get a job even if they wanted to," Indiviglio writes. "This emphasizes the need for Congress to extend unemployment benefits. It's pretty clear that millions of Americans remain unemployed because the jobs aren't there -- not because they aren't trying hard enough to find them. In fact, it's not even close."

By Ezra Klein  |  July 13, 2010; 2:48 PM ET
 
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Comments

According the new WaPo poll, most of the people inside that gap plan to vote for Republicans because the Dem controlled government failed to fix the problem or extend benefits. At which point I throw my hands up.

Posted by: Adam_W | July 13, 2010 3:24 PM | Report abuse

Uh, Ezra, baby, where are the jobs?

When will liberals learn that not every problem society faces can be solved via a transfer payment scheme?

If an extension of unemployment benefits is what you think America needs what other programs are you willing to cut in order to fund this?

Are you willing to stare down the rest of the Democrat/liberal spendthrifts to eliminate the christmas tree of goodies that a bill like this typically looks like?

Ezra, once again, where are the jobs?

Posted by: skipsailing28 | July 13, 2010 3:36 PM | Report abuse

*where are the jobs?*

Nowhere. Which is why we should keep paying out unemployment benefits. There isn't any moral hazard here: the problem is that there are not enough jobs available for people to take. Which is why the rhetoric coming from some politicians about how the unemployed are "lazy" and should "just get a job" is such vulgar and hateful vituperation directed at our struggling citizens. And this unhinged hatred from the right when it comes to thew plight of the unemployed needs to stop.

Posted by: constans | July 13, 2010 4:03 PM | Report abuse

"According the new WaPo poll, most of the people inside that gap plan to vote for Republicans because the Dem controlled government failed to fix the problem or extend benefits. At which point I throw my hands up."

This actually might be a good strategy for the unemployed. The unemployed might have good reason to think the Republicans will go back to their Bush era spending ways (including extending unemployment benefits) if they are in power and can get political credit.

"It's pretty clear that millions of Americans remain unemployed because the jobs aren't there -- not because they aren't trying hard enough to find them. In fact, it's not even close."

Well, sure. I don't think anyone disagrees that unemployment would be high without unemployment insurance. On the margin, unemployment benefits increase unemployment, even in a bad recession. There was a study on Pittsburgh from the 1980s (during which time unemployment got up to 16% there) which showed people avoiding employment until benefits expired. The FOMC believes unemployment benefits increase unemployment by about 1% of the labor force. And Ezra, a study you linked to suggested unemployment benefit extensions increased unemployment by 0.4% IIRC.

That said, excess unemployment is around 4-5% of the labor force right now, so 80%-90% can't find a job at this second even if they wanted to.

All I've ever said on unemployment benefits is that they don't increase GDP. Higher unemployment - which even the study Ezra linked to said unemployment insurance causes - suggests lower GDP all else being equal. After all, spending money doesn't create wealth, wealth is created by producing goods and services. The question here is do these people deserve any relief payments - if you are comfortable with government transfer payments in general, the cost of slightly lower output is probably worth it to you to extend unemployment benefits.

Posted by: justin84 | July 13, 2010 4:20 PM | Report abuse

All the conservative talk of unemployment benefits increasing unemployment, and whether or not people deserve these benefits leaves me wondering... What exactly is the conservative solution for the unemployed who are sure to become homeless after their benefits run out? Because that is what we're talking about here. No one I've heard believes that job recovery is just around the corner, so unemployment is sure to remain high for the foreseeable future no matter what we do. Some of the long-term unemployed may be able to move in with family or friends, but some will surely have no such option. What do we tell them? Tough luck?! Free showers at the Y?!

Posted by: paul5280 | July 13, 2010 4:40 PM | Report abuse

""Bank of America creates Indian outsourcing subsidiary" -
"Citibank to absorb Indian outsourcing firm" -
"JPMorgan Outsourcing To India To Increase By 25%" (3/10/09) -
"Big Pharma will bring blockbuster drugs to market at a fraction of the current $1 billion average cost by allying with partners in India, China, and Russia in molecular research and clinical testing" -

So Where Are the Jobs - NOT in the US - and NOT returning to the US.

Corporate Greed for Profits and Bigger Bonuses won out over - Paying a Decent Living Wage in the US to workers.

Sigh.

Posted by: fair001 | July 13, 2010 4:41 PM | Report abuse

No unemployment? Thank the republicans! For the rest of you -When the economy stalls again - you can thank the republicans too. The republican’s weren’t worried about the deficit when that big insurance company and their friends the Wall Street execs were giving themselves bonuses with taxpayer money!!! Next election – let Congress feel the sting of the unemployment lines!!! No more raping and pillaging the middle class!!! – How many years have you paid taxes? 30? 40? Your government bails out bankers and Wall Street execs using your tax dollars – but unemployment is allowed to expire? What happened to "by the people" or "for the people"? Or are the big campaign contributors the only "people" who count to congress? They are playing games AGAIN FOR THE THIRD TIME while you are wondering how to feed your kids? Figure it out! Malfeasance – Failure of a public official to perform their duties!!! Next Election MAKE YOURSELF MATTER BY VOTING!!! 10% unemployment carries 10% of the vote! Use it!! Fire them all next election or recall every Congress member NOW for Malfeasance – Failure of a public official to perform their duties!!! Next Election - Lets get people elected who actually represent all the People- this current congress represents only special interest groups!

Posted by: agh1 | July 13, 2010 4:53 PM | Report abuse

Cramer says - may be President stays away from stimulus, jobs will come eventually. Cramer's advise to Obama - focus on world peace.

Okay, the point is private sector economy and Capital Markets to a large extent may be having the 'escape velocity' to get out from the clutches of domestic unemployment and consequent domestic demand. Trade gap is still increasing, but there may be something that exports would hold reasonable. Intel - look for its outside USA demand. That is largely the case with Tech companies. As many other manufacturing and commodity companies join export bandwagon, Corporate America and Banks will do well; uplifting Wall Street. This in turn will improve asset class for a large swath of Americans. All this will be happening while Krugman is crying wolf for high unemployment for ages to come. Krugman is right and that is bad, but on the other side it will help American Economy to have inflation contained (since labor is the biggest component of the inflation).

That seems to the game plan of Larry Summer and Geithner here.

True, that will not bring votes to Obama; but it can build the foundation for Obama's campaign for the second term.

Really we have to come to terms with high unemployment and de-linking well being of Economy overall from unemployment rate. There are so many emerging markets where unemployment is high but growth rate is high too.

Basically, folks like Ezra have lost credibility with American public. Read Mort Zuckerman's critique. http://politics.usnews.com/opinion/mzuckerman/articles/2010/07/02/mort-zuckerman-obama-is-barely-treading-water.html

Then we will see. May be Obama, Summer, Axelrod, Emmanual and Geithner gang of White House could be getting a break here and their approach of 'stay steady' might be working.

Ezra needs to do some soul searching here and keep his obsession with 'unemployment and stimulus' in perspective.

Posted by: umesh409 | July 13, 2010 4:57 PM | Report abuse

@umesh409: I wonder what's more important to the average American... GDP, which is essentially just a number, or their own ability to pay for food and shelter.

"There are so many emerging markets where unemployment is high but growth rate is high too."

Ever visited any of their slums? I recommend a field trip. I personally wouldn't advocate for that type of setup in this country; that would set us back a century or more.

Posted by: paul5280 | July 13, 2010 5:26 PM | Report abuse

One obvious way to reduce unemployment would be to reduce the labor pool at the low end. Yet, Ezra and other "liberals" (as well as some conservatives and most libertarians) support the opposite policy: expanding the labor pool. They have no real concern for the unemployed except as pawns.

Over a year ago I sent an open letter to a major, Obama-linked group suggesting how they could help ease unemployment:

http://24ahead.com/n/8902

If you want to help do something, forcing groups like that to actually care about the unemployed - instead of just using them as pawns - would be a good place to start. Hold CAP accountable - make them look bad - at places like the thinkprogress.org blogs and even their public meetings. Really embarrassing them over turning their backs on Americans could help greatly with this issue.

Posted by: LonewackoDotCom | July 13, 2010 5:38 PM | Report abuse

"paul5280" -

I am practically from one such poor area from India. Born and brought up there for decades, so has first hand experience of poverty in emerging economies.

My point is, we are quite soon going to come to a point where we separate 'unemployment' and larger issues like 'sovereign debt, GDP, growth rate, capital adequacy' and so on.

Politics of 'unemployment' will have to be different than what policies you need to foster growth. At some point in the recovery following a recession, these two things may diverge and my argument is possibly we have come to that point in case of American Economy.

Posted by: umesh409 | July 13, 2010 6:51 PM | Report abuse

Adam_W, that's what people do. When the party in power doesn't effectively address their needs, they throw that party out. And when the other party doesn't address their needs, they throw that party out.

From my perspective, the problem is that voters don't rise up and throw 'em all out...over and over and over again...until the politicians get the message.

Republicans didn't do anything that Democrats didn't help them to do. And now that Democrats are openly embracing so much of the 90's era Republican agenda, the differences to the average voter are becoming ever more opaque.

The catfood commission is the creation of a sitting Democratic president. It has been a sitting Democratic president running around saying stupid sh*t like "government can't create jobs" and "Social Security and other entitlements must be looked at." (On Medicare, which is in actual trouble, he has a point. On Social Security, which is fully funded for something like the next three decades so long as our politicos don't embrace sovereign default and steal -- yes, steal -- all of our excess contributions, he has no point at all.)

The too-small stimulus was larded with ineffective tax cuts in an advance capitulation putatively designed to garner Republican votes that everyone knew were never going to come.

The last "jobs" bill was a reward to employers in the form of a FICA tax holiday for employer contribution. This was for people they were gonna hire anyway as no one hires an employee to sit idle even if they have to pay no taxes at all.

The call for expanded offshore drilling came from Obama...just before the BP fiasco.

Finally, Dems just seem feckless. Inept. Incompetent. No matter how badly the Republicans did, people who voted for change haven't seen it or any solid evidence that it's on the way. They have seen bailouts for Wall Street and banksters. They have seen Dems who capitulate to Republicans at every turn. And since the Republicans haven't controlled either house of Congress since the 2006 elections, or the White House since the 2008 election, people (with their short memories) are turning their blame to the ones that are in control.

Don't throw your hands up. Make the Democratic Party act like it's made up of actual Democrats.

Posted by: oxfordsystems | July 13, 2010 7:17 PM | Report abuse

@umesh409

"I am practically from one such poor area from India. Born and brought up there for decades, so has first hand experience of poverty in emerging economies."

Ah, so you are one of the fortunate few from a country that has no tradition of valuing a robust middle class. (Also, "practically"?)

And it seems that you are advocating that we stop being concerned with things like unemployment and instead focus exclusively on GDP growth as determining the health of our economy?

Well, growth of the latter without a commensurate lowering of the former would indicate that the rich are getting richer on the backs of everyone else. Which means that the middle-class of the U.S. would be disappearing. I think you will find that relatively few U.S. citizens, regardless of what they may consider their political affiliation, will knowingly support such an end - or consider such an economy to be a healthy one.

While one might argue that the current political landscape here belies that claim, I suggest that things just need to get a bit less subtle for the bulk of the electorate to realize the direction in which we are headed.

Posted by: Ohel | July 13, 2010 8:31 PM | Report abuse

Hey libs, what about the self employed people who were forced out of business with the economy and zero's policies? Where are their benefits? Where is their lifeline? You don't have .99 for them but you want to extend benefits...again, for forever unemployed? I don't think so!

Posted by: steelers01 | July 14, 2010 12:09 AM | Report abuse

Hey steelers01, what's your point? Do you have a point? Do you think moralizing about "the forever unemployed" will magically create job openings?

Unemployment insurance will at least keep people from starving, keep people from being missing mortgage payments or from being evicted, and provide some consumer demand for goods and services. On the other hand, the other needs for this money are...more infrastructure in Iraq? More tax cuts for billionaires?

We are not going to see a significant recovery until consumer spending increases. And that will not happen until the unemployment rate drops. Until then, throwing more water on consumer spending seems counter-productive.

Posted by: rick_desper | July 14, 2010 12:37 AM | Report abuse

"One obvious way to reduce unemployment would be to reduce the labor pool at the low end."

Kill the poor?

Ordinarily such a concept isn't embraced openly. Glad to see Lonewackodotcom openly embrace the solution that our billionaires secretly prefer.

Snark aside, I have no idea what "reduce the labor pool at the low end" is supposed to mean. Social Darwinism? Ship the brown people back to Mexico?

Posted by: rick_desper | July 14, 2010 12:42 AM | Report abuse

Everyone knows that if the republicans were still in the majority they would have passed this extension without even thinking about it. Only when they are in the minority do they take on the mantle of "deficit hawks." Every republican administration in my lifetime (since Nixon) has spent money like water. They are just hoping to do anything they can right now to keep the economy from getting better before 2012. It is in their best political interest that Obama is perceived as a failure.

Having said that, the job situation is not as bad as many would have you believe. I was laid off from my last job (large software company) because they acquired another large software company. I got a 4 month severance package and it took me 2 weeks to get hired at another company.

Posted by: clejeune | July 14, 2010 1:09 AM | Report abuse

""I was laid off from my last job (large software company) because they acquired another large software company. I got a 4 month severance package and it took me 2 weeks to get hired at another company.""

People under 50 with a college degree have a _much_ lower unemployment rate than the overall average. Since this demographic makes up much of the media, professional, and political class, it accounts for why people don't see the employment situation as a problem. They have jobs, their friends have jobs, so they figure things aren't so bad. But software developers in the 50s getting laid off are never going to work again. Those who have less than a bachelor's degree are hurting very badly and are competing with hundreds of others for every job opening. Those just coming out of college are likely to have their professional plans completely sidetracked.

Posted by: tyromania | July 14, 2010 9:18 AM | Report abuse

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