DeBlog: Do Unemployment Benefits Discourage Job Seekers?

Tonight’s Good Question is a doozy. In light of the compromise to extend unemployment benefits (again), we’re wondering if getting unemployment benefits keeps people from actively looking for a job.

Yeah, when you get unemployment, you’re supposed to be looking for a job, but with the volume of people on the program right now, it’s not like there’s any real way for case workers to be on top of that.

Economist Diane Lim Rogers is with the Concord Coalition, a nonpartisan think tank, and she told Markeplace on Public Radio: “I think that might be a legitimate argument to make if the economy were in much better shape than it is. I mean the simple fact is there’s just not enough jobs out there, the jobs aren’t there to turn down. So I think the worry that benefits prevent people from looking is way overblown right now.”

But realistically, if things look bad out there, and you’re guaranteed a check, doesn’t it make sense that you may not search as vigorously as you would without a check? The Labor Department reports job openings are at a 2-year high, there are a 3.4 million advertised openings.

What say you? I’ll use your comments in tonight’s 10 p.m. story.

More from Jason DeRusha
  • Jeff Rosenberg

    There are about 5 times more unemployed Americans than there are jobs available. Even if we filled every single open job right now, there would be 12 million people without work. What are those people supposed to do?

    People on unemployment insurance are hardly living on caviar. It’s just enough to keep people from losing their homes and sending the economy into a downward spiral.

    • Laura Triplett

      WHO Is paying for this?????? I dont think the Unmployed are! It;s the businesses and where does this money come form????? Not my business…I’m tapped out!

  • pk

    Are you kidding me? Do you really think that people who have previously held jobs could stand to “sit around” with nothing to do and not look for work? And who can live on $300 a week or less? Job openings at a 2 year high???? What kind of jobs are these, because our newspapers job ads have gone from 20 pages to 3. Really??????

  • shawn

    Numerous guys I know on unemployment don’t look for jobs unless the benefits are about to run out. And it keeps getting extended so they just stop looking and end up working for cash here and there while double dipping. So most of the time they are fishing, playing softball, etc 4-5 days a week on the governments dime. Long termers become dependent on it or dont care instead of paying taxes like the rest of us. This madness needs to stop!

    • KJ

      Sorry – taxes ARE PAID on Unemployment – and guess what – we do look for jobs – but when you made over 500 a week – are getting 360 a week on unemployment and jobs that are available for 10 and less per hour – do the math – you have to be able to make something to stay in your house – let alone EAT. You look for jobs but its not an 8 hour the day job and you still have to put gas in at $ 3 a gallon to look (though alot is done online by me) – what do YOU propose – want to hire me – I worked for THIRTY years without EVER being laid off – and there is NOTHING there to get –

    • HM

      Very true! I too know people who are doing this. They are “middle class” college grads completely capable of working. Back in Colorado you have to prove you’re looking for work EVERY week. In California, they don’t check at all. Just send the check…… questions asked. Someone can get away with doing this for a over a year – with no intention of getting a job. It’s not impossible to live off of $1600 a month if you’re single or if the other spouse/SO is working. If you have a car paid off and minimal expenses, it is do-able and some people will take advantage until they’re cut off.

  • Sini Stjernswärd Ross

    Thanks for the question Jason. Yes, there are people who ruin it for the rest who really need this. I know of several people who have made it a full time job to search for their next position and really need the safety net of the Unemployment Benefits helps to keep their head above water.

    The real way to get out of this economy is if people started their own businesses vs. finding a job that doesn’t exist. I think that one of the key reasons that people are afraid to do this is because health insurance benefits are not portable. Cobra is a joke…who can afford $1,400 a month for a family? Heaven forbid if a member of your family has a pre-existing condition. I would rather see continued economic support to those who have been long term unemployed to start their own small business, let them take their health insurance policies with them and provide small business loans that are reasonably attainable. That is how we are going to get out of this economic mess.

  • DB

    My wife only receives $100-$150 per week in umployment as she has a part time job that decreases her weekly umployment benefit. In the first year her benefit was closer to $200 per week. She applied to Target and was offered a temp position at $7.50/hour. When she realized she would have to work 15-25 hours per week- mainly weekends, nights, and holiday just equal her unemployment, it didnt make much sense to take the position. Had she not had the benefit, I presume she would have accepted the position. Now she has made a decision to obtain her masters in her chosen field

  • Laurie Montanye

    I am on unemployment for the first time in my life… Try being 63 years old and getting someone to look beyond your age for the skills and experience you can bring to the job. That is a real challenge. I could easily give another company 15 to 20 years, but it seems they prefer the younger crowd.. Longevity used to be something a company admired in a worker, but job hopping is not uncommon… So I will continue to look for that one person that will value my worth and give them all I got with work ethics that I was raised with… Not giving up hope….yet! :)

  • Jennifer Selby Westpfahl

    I would say that I looked a lot less fervently because I had benefits than I would have if I hadn’t had them. But with that said, I did end up getting a job even though I had plenty of unemployment left. If you deduct what I would have got from unemployment and what I pay for child care, my net gain is about $5 an hour. Sometimes I wonder why I didn’t just stay home on the government dole.

  • ks

    Most definitely, I think we have all come across people who are not hiding the fact that they are doing the minimum to get paid. Yes, there may not be as many jobs these days but it would seem logical that the amount of effort expended to get a job would correlate to the likelihood of getting a job.

    Years ago (many) I researched a program called workfare for a school paper. The idea is that recipients spend almost 20 hours a week searching for a job or getting skills training. Obviously the cost to provide the training and monitor recipients would not be cheap but the idea is that people are not on unemployment for nearly as long. And I have to wonder, if this wouldn’t set a much better moral example.

  • Mary

    Absolutely yes.

    I own a small business in Rogers, MN and was shocked at a reoccuring question I was asked by applicants. The questions was “Can you pay me cash so I can keep my UI benefits?” When the applicant was told no, they declined employment.

    The state of MN and MN’s UI system is biased. I agree that UI is needed but MN needs to do a much better job at determining who is eligible. Should an employee who vandalises company property with hateful, racist symbols be granted UI benefits? Our state sure thinks so, this happened at my small company.

  • David

    I’m going to ignore your question and focus on two myths, both of which Shawn out out there for all to consider.

    1) Unemployment is a gov’t handout. Wrong, unemployment is an insurance that everyone working pays for with each and every paycheck. Many people pay their entire lives and never collect and many pay for years upon years and then collect for a short amount of time. So extending benefits during a horrible period is not in any way, shape, or form a “handout”

    2)People are having a party on the money and not paying taxes. Wrong again, all unemployment money is taxable.

    Now I’ll answer your question, sure some people may use the money to not work, but I think any type of research would show that they are buy and large a tiny fraction of the people on unemployment insurance.

  • shawn

    Hey Dave, its not a myth what im saying. These are my friends that pull this off and trust me I give them an earful about it! Maybe its the age group that Im part of, late 20’s, early 30’s??

  • William Schultz

    I’m unemployed, in my mid-20s, and desperate to use the skills that I learned in college and my first few years of work. While the unemployment benefits definitely help, they are nowhere close to what I was making in my last job. I’m sure there are people that are able to get by and be lazy while receiving unemployment, by my hunch is that the vast majority of people, given enough time, would give anything to work 40 hours a week at a decent wage.

  • Joe

    You can’t be serious. My unemployment benefits are hardly enough to squeek by. I’ve been looking for a job for 8 months and the jobs just are not out there. Especially if you are a middle age+ former office worker who is not in the construction trades.
    The competition for every job is very stiff. Employers can afford to be picky.
    Many employers now use an automated online application system such as “Taleo” to process application due to the volume of applicants. The jobs just are not there. Look at the Sunday Strib – the employment ads are only a couple of pages.

  • JTD

    I was unemployed for 20 months. The difference in pay between what I took home at my former job and what I was getting through unemployment (after taxes) was about $700 a month. That’s quite a bit of money. So no, I didn’t starve for those 20 months, but I wasn’t going on vacations either. And I was home with our baby so it wasn’t like I could look for jobs 8 hours a day. There just weren’t that many new job postings in my field to be honest. Thankfully I’m back in the work force, but it was a long process that employers took their sweet time with.

  • shawn

    Sorry for wording that wrong. What I mean is the cash jobs being done while on UI are not payng taxes. And yes I do feel bad for those pounding the pavement and truly looking hard for jobs. Im not that sadistic but ive definetly see people use and abuse the system first hand.

  • Crystal

    I haven’t seen anything being said from the hiring perspective, so I’ll join in as a former HR person (laid off last year). One major obstacle to taking a job, any job, is that the job seeker could be leaving a hard-worked-for career. While employers are a bit more sensitive to the struggling job market than they were a few years ago, the fact still exists that a candidate who has remained in their field is more marketable (and employable) than someone who spent the last year settling for a job outside their field. I’d even go as far as saying that a person who has spent the last year unemployed yet searching in their field is more attractive than a candidate who spent the last year working outside their field.

  • Crystal

    Let me also add that unemployment is an antiquated system. If you are doing any activity other than searching for a job full-time, you should not be collecting unemployment. So, even if one wanted to start a small business, they could not do so while collecting unemployment.

  • Trudi Meloche

    This year’s Nobel Economics Prize was awarded to the Diamond –Mortenson-Pissarides model that estimates how benefits, interest, efficiency of employment agencies and other factors can affect the labor market. The group studied how unemployment, job vacancies and wages are affected by regulation and economic policy. The study concluded that “more generous unemployment benefits give rise to higher unemployment and longer search times”. I work for an agency that provides employment support services, and four out of four staff members that I just polled concurred with that notion. They all agreed that it depends on the person, but generally most people wait until 2-3 months before benefits end to really get serious about their job search or career change.

  • Sandi

    If I was not eligible for unemployment benefits, I might have lost my house by now – I’m in my late 50’s and have been looking hard for a year. There are just so many people out there for each position that it’s hard to get past the automated systems that so many companies use today. Face to face just doesn’t happen. I’m sure there a a few who take advantage of UI benifits, but I’d bet that most are hard at work looking for jobs – I know I am !!!

  • Denise

    I think that it will certainly discourage some people not all from looking for a job. It should be there for people who most certainly need it the most!! I think if they are getting it they should be made to show proof that they are out looking for a job!! It’s just like welfare, if we continually support these people there won’t be anything left for those who truly need it!!!

  • DJ Schow

    I believe some people do abuse the system. Yet other like myself who worked two jobs for 13 yrs became unemployed in Aug of 2009, Without these benefits I would not be able to provided for my daughter. As a single parent it truly helps while I look for work. Unfortantly there are only about 13 posting each Sunday in the newspaper in my aera. Just A note I have never applied for Unemployment before this. I scare for the future of myself and my daughter if they do not allow us to collect for a few more months.

  • JMH

    I think the people this bothers the most is those who have never needed this benefit. I direct this at Denise, if people don’t have a job don’t they need it!!!!! Unless you have a Master’s degree you can’t find a job, trust me I am unemployed and have been looking, just cause you apply does not mean you WILL get the job, there are 500 others applying for the same job.

    • hk

      I agree that people should get their benefits – but need to provide PROOF of their job search, including if at all possible a quick phone call to the hiring company or recruiter to confirm. It’s just to easy to get away with IF you want to. Not saying most people do, but people should not be paid unemployment if they’re not actively searching.

  • Mary

    Get a grip!!!! I worked for the same company for 27 years only to lose my job in March 2009, then I found a new job in March 2010 only to lose that job because my previous employer dropped them as a client. For every job opening there are 500 job applicants, so the chance of getting an interview is very slim. I spend 85 hours a week looking for a job. Unemployment barely pays the bills, so I would love to go back to work. Those extended benefits will not pay for Xmas gifts, but will pay bills and for food. It will also benefit the economy until things improve.

  • Sandie

    I would prefer to work. I have had interviews (about 25) but still no job. For every job there are 5 people looking. I have gone back to school to get more training, but I try to apply for as many jobs as I can. The field that I was in has been cut to nothing when schools lost funding. So I have kept looking, but nothing. I have been out of work since 2009 and am not sure what to do next.

  • Bud

    First off, unemployment compensation is not deducted from a person’s check while working… is paid by taxes on employers only. I have spend 32+ years working in the Mn Workforce Center and in the Unemployment office, and have worked through many recessions. My experience tells me that the majority of people on UI are looking for work, but the remainder are working the system .Many accept jobs, knowing they will be laid off, and can’t wait to file a claim. The problem is the system does not have staff to locate the cheaters and stop their fun. Many call in weekly for their benefits in their pajama’s and then head back to bed. Some wait until Family Feud is over to call in. This is the worst downturn in the memory of anyone drawing benefits. At some point in time, a person has to realize that the job they held at the pay they received, may never be there again. That happened to many so called “engineers” that Honeywell laid of in the 90’s. This is a complex problem, knowing when to throw in the towel and seek a lesser paying job or return to school for training that may increase their chance of employment. Some people will not lower themselves by taking a lesser job. I for one have high regards for anyone working at whatever level instead of knocking on the door of a welfare office. I wish I could fix this economy, and make it all better, but we all know that won’t happen. For those people honestly looking for work or working under their skills, stay strong. This is not the first recession, and it won’t be the last. May God be with you all and keep your spirits high.

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