Last Updated:October 21 @ 05:56 pm

Federal unemployment benefits can discourage job hunting

By Daily Oklahoman

Due to national recession and the ongoing anemic recovery, Democrats have advocated for constant extension of unemployment benefits. At one point, beneficiaries could be on unemployment for up to 99 weeks. Many Republicans argue that extended benefits can discourage recipients from actually getting a job. The experience of North Carolina suggests those critics have a point.

In North Carolina, state lawmakers reduced unemployment benefits by more than 30 percent and implemented work requirements. Those changes meant North Carolina didn't qualify for extended federal unemployment benefits, so the state lost that federal funding in July, six months earlier than most states.

The Wall Street Journal's Damian Paletta recently reported on the results: "The Tar Heel State's unemployment rate since then has plunged, as people who were receiving benefits scrambled to find jobs or stopped looking for work. Employers report a flood of applicants."

Unemployment in North Carolina has declined from 9.5 percent to 6.9 percent. It appears a significant number of people previously chose taxpayer benefits over a paycheck, but are now actively job hunting. Paletta notes, "Many of the long-term unemployed have taken jobs for which they appear to be overqualified, based on experience or education, and some are piecing together multiple part-time jobs to fill the benefits gap."

Obviously, that's not ideal for those formerly unemployed workers. But is it ideal for those same individuals to depend upon other taxpayers for support, when many of those taxpayers face financial challenges of their own without resorting to government assistance? It's unlikely that many citizens are losing sleep simply because some former government beneficiaries are now forced to work lower-tier jobs.

Supporters of extended unemployment benefits may note that the labor force participation rate in North Carolina has fallen, and is below the national rate. That's a valid point, which suggests some on unemployment didn't seek jobs once benefits ended. Yet it's worth noting that many liberal groups that proclaim every minor decline in the national unemployment rate to be proof the Obama administration's economic policies are working ignore the fact that most of that movement is also tied to declining labor participation, not job creation.

North Carolina's situation is worth noting because some suggest Oklahoma's unemployment benefits program also needs improvement. In his recent Policy and Issues Report, Lt. Gov. Todd Lamb says a functional unemployment system provides an important safety net. But Lamb notes many business leaders warn of "a disquieting 'culture' penetrating our state" in which unemployment benefits are being abused or treated as an entitlement.

"Unemployment compensation should be for those workers, who through no fault of their own find themselves displaced," Lamb writes. "It should not, how-ever, be a refuge for those terminated because of misconduct on the job. While that is already the law, business leaders have personal experience that this is not being enforced. It is vital that Oklahoma ensures that the new unemployment compensation laws allowing employers to discharge for misconduct and not pay unemployment compensation are properly enforced."

In North Carolina, it appears many citizens previously chose taxpayer support over gainful employment. In Oklahoma, Lamb argues unemployment benefits are not only benefiting those who could otherwise obtain work, but also those who are flagrantly scamming the system. That's good reason to increase oversight of the system and keep benefits in check.

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(c)2014 The Oklahoman

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11 Comments

  1. awmacronymComment by awmacronym
    March 6, 2014 @ 3:00 pm

    I’m ambivalent about this issue. Personally I have been collecting the maximum unemployment amount and “choose” not to take certain jobs for sound economic reasons. First, I calculated what I would have to earn per hour based on a forty hour work week to match that, and determined I would prefer to keep the flexibility of ample time to interview for positions within my field of accounting and finance. Compensation for those is over triple what I collect in benefits so trust me, there is a huge incentive to look for work; when I am working, I pay far more into the system. Second, the issue of misconduct varies by state. In my state they can deny benefits for transgressions such as reporting in late a few times, so it is not so easy to engage in misconduct and then get benefits. Many years ago an accounting firm I worked at attempted to mask a layoff as underperformance and misconduct in order to avoid paying an increased rate into the system; those firms pull that stunt all the time because the work is cyclical. I took the initial rejection to appeals and clobbered the employer twice. Finally, the labor market is so bad that unemployment agencies will attest they are seeing people’s benefits run out at an historically unprecedented rate; that happened to me a couple of years ago. If someone like me with a graduate degree and several years experience in accounting and finance is stuggling, extrapolate that to those who do not.

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  2. awmacronymComment by awmacronym
    March 6, 2014 @ 3:43 pm

    And I am not finished yet because this issue really hit a nerve. Employers love to whine about dishonest former employees who cheat the system by committing misconduct and then collect benefits in turn. They can get a sympathetic ear among Republicans who take it all at face value. They never mention the horrible things THEY do to employees, which I and many others have been victims of far too many times. A few examples. False claims that a position is permanent when they are only going to use you for some specific tasks, and then cut you loose after a few months (last position that effectively put me back on unemployment). No regard that the employee had a steady position before that either. This stunt is usually accompanied with some bizarre trumped up allegation of underperformance or misconduct that never ONCE was communicated during the employment period. How about overhiring employees en masse, then only keeping the ones they like most after a few weeks and terminating the rest (a few years ago)? Funny, they never disclose that hiring model in the interview! Fraudulent claims of misconduct, because the employer cuts so many people loose in the first place and is looking to dodge paying higher rates accordingly (many years ago). I forgot, it is just the employees that commit fraud, or so the employers would like us and Republicans to think. It is insulting to assume all of the unemployed do not want to work or are just looking for ways to cheat the system.

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  3. DaveComment by Dave
    March 6, 2014 @ 7:57 pm

    You may not think you are abusing the system, but you are! You didn’t say how long you have been on extended benifits, but yoour excuses tell a lot!Don’t you know it’s easer to get a JOB, If you are working!I’d MUCH prefer hiring a worker, then ANYONE collecting extended benifits.

    There are several reasons. One of the major ones are that ANYONE willing to work the system, is NOT desireable! I’d rather find someone working, and living up to his/her potential, then what you are doing! All I can say, it’s your choice, but I do disagree on your tactics

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    • gabbylopez1978Comment by gabbylopez1978
      March 7, 2014 @ 6:51 am

      Employers have that right to choose someone who is working or receiving Unemployment BENEFITS. They end up choosing one with skills that are DESIRABLE. Just like I’ll choose and employer that can spell benefits and desirable. After two Undergrad degrees and a Masters I happen to remember how to spell these 2nd grade words.

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    • DaveComment by Dave
      March 7, 2014 @ 9:47 pm

      gabbyopez>>>>> You are correct in one area,and that is employers do, and will hire who they see fit. I am telling you I WILL NOT hire someone who works the system like awmacronym does.

      As far as my spelling abilities are concerned, I guess it makes you feel like a BIG MAN to be condenescending to a 7th grade person. I, with a 7th grade education have probably done more in hiring, and supporting members of the community, then you have! As a business owner employing in the hundreds over 22 years and attaining well over a million $ GROSS a year, my spelling and typos haven’t hindered me one least bit!I also see in your short post that your parents haven’t taught you that you don’t make fun of others. As an (UNDERGRADUATE)in two fields, I would be embarrassed in being such a horses ***!

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    • gabbylopez1978Comment by gabbylopez1978
      March 8, 2014 @ 7:34 am

      My response was simply a response to your inability to choose the right candidate. Choosing someone with a current position over someone that is receiving benefits is ONE of the reasons America is in this mess. It is an unfortunate reality that we face.

      In response to my parents? My parents taught me that people judge based one one’s inability to spell correctly. That too, is an unfortunate reality we face.

      I commend you for your accomplishments. Just stating some unfortunate realities in life.

      May you never have to experience being unemployed.

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  4. gabbylopez1978Comment by gabbylopez1978
    March 8, 2014 @ 7:38 am

    Typing in my iPad predicts words like and and one.

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  5. wepsyComment by wepsy
    March 10, 2014 @ 9:49 am

    This is about more serious matters than personal attacks on someone’s spelling skills.

    My personal proposal is that unemployment benefits have value, to a point.

    Los of a substantial amount of income is traumatic. People need to adjust, often painfully, but then they need to move on in the realities of the world.

    My proposal is that federal unemployment benefits should be reduced by 20% for each quarter-year that a recipient is getting them. That is called tightening the belt and increasing motivation to take whatever job is available.

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  6. glennComment by glenn
    March 10, 2014 @ 12:52 pm

    Lets look at it in a pure sense, if one can live over a year on a reduced income of unemployment why can’t they live on a reduced income from what their previous job paid. In the old days unemployment lasted for 6 weeks and now for a year and some think it should last 99 weeks. Can tell you there are a lot drawing unemployment while working on a cash only basis. For you that say things are harder now to find a job can tell you bull as in the 40s after the war and the 50s is was damn hard to find work but we did. Again back then there was no such thing as a job an American wouldn’t do, that’s the big difference.

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  7. gabbylopez1978Comment by gabbylopez1978
    March 16, 2014 @ 10:23 pm

    Glenn,
    You must not have small children. The cost of childcare has changed since the 40s and 50s. In NJ, I pay $1100/mo for my preschooler (just ONE child) to attend a quality preschool program full time. If I take a huge pay cut I risk not being able to afford to pay my mortgage and other bills, or worse, placing my child in an unsafe environment just to save a buck. That, Sir, is a stress you know nothing about. Try doing that and stressing about starting a new job that may let you go for a number of reasons anyway.

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    • glennComment by glenn
      March 17, 2014 @ 12:31 pm

      You think things were only hard today but thru time we have all had hardships and yours is no worse than in the past. The difference I see today is people seem to want to fulfill their wants while in the old days we were happy to take care of our needs. We bought houses and drove cars we could afford while today it is big houses and expensive cars. We didn’t try to impress others like it seems a lot need to do so today. I have lived my life that way to my old age and guess what, have no worries about money and own two homes free and clear. Bought the home I live in today in 1975 and didn’t need to buy the big home everyone else thought they needed. Raised two sons in a 1600 sq. foot house and they did just fine. By the way the people I knew who bought the bigger homes and took out seconds all lost their homes because they spent like there was no tomorrow. Guess what tomorrow came.

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