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Monday, July 01, 2013

Paul Krugman: War On the Unemployed

Why has it been so easy to turn our backs on the unemployed?:

War On the Unemployed, by Paul Krugman, Commentary, NY Times: Is life too easy for the unemployed? You may not think so... But that, remarkably, is what many and perhaps most Republicans believe. And they’re acting on that belief: there’s a nationwide movement under way to punish the unemployed, based on the proposition that we can cure unemployment by making the jobless even more miserable.
Consider ... the case of North Carolina. The state was hit hard by the Great Recession... Nonetheless, the state’s government has just sharply cut aid to the unemployed. ...
It’s quite a spectacle, but North Carolina isn’t alone: a number of other states have cut unemployment benefits... And at the national level, Congress has been allowing extended benefits introduced during the economic crisis to expire, even though long-term unemployment remains at historic highs.
So what’s going on here? ... In general, modern conservatives believe that our national character is being sapped by social programs that, in the memorable words of Paul Ryan,... “turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.” ...
Is there anything to this belief? The average unemployment benefit in North Carolina is $299 a week, pretax; some hammock. ...
All of this is, however, irrelevant to our current situation... While cutting unemployment benefits will make the unemployed even more desperate, it will do nothing to create more jobs...
But wait — what about supply and demand? Won’t making the unemployed desperate put downward pressure on wages? And won’t lower labor costs encourage job growth? No —  cutting everyone’s wages just reduces everyone’s income...
Oh, and let’s not forget that cutting benefits to the unemployed, many of whom are living hand-to-mouth, will lead to lower overall spending — again, worsening the economic situation, and destroying more jobs.
The move to slash unemployment benefits, then, is counterproductive as well as cruel; it will swell the ranks of the unemployed even as it makes their lives ever more miserable.
Can anything be done to reverse this policy wrong turn? The people out to punish the unemployed won’t be dissuaded by rational argument; they know what they know, and no amount of evidence will change their views. My sense, however, is that the war on the unemployed has been making so much progress in part because it has been flying under the radar, with too many people unaware of what’s going on.
Well, now you know. And you should be angry.

 

    Posted by on Monday, July 1, 2013 at 12:24 AM in Economics, Politics, Unemployment | Permalink  Comments (71)

          


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