New study blows up GOP talking point that cutting unemployment benefits early will push people to find work
In right-wing conservative and libertarian ideology — and even among some centrist Blue Dog Democrats — there is a widely held belief that having a social safety net encourages people to be unproductive. And unemployment benefits, according to that school of thought, make people complacent about looking for work. But new analysis from the employment website Indeed suggests that cutting off unemployment benefits early does not make people find work any faster.
Indeed's analysis comes at a time when many Republican-led states are opting out of enhanced unemployment benefits that came in response to the COVID-19 pandemic and the recession that it caused.
Indeed's analysis measures clicks on job posts. CNBC reporter Greg Iacurci quotes Ann Elizabeth Konkel, an economist for Indeed, as saying that "people in those states" — meaning GOP-led states — "are less likely to be searching than your average jobseeker right now."
According to Konkel, "You'd think they'd be searching more. At least right now, this does push back on the idea that federal unemployment benefits are the main reason there are labor market frictions."
Conservatives and libertarians have been claiming that because the Biden Administration and Democrats in Congress are overly generous with unemployment benefits, and Americans are lax about looking for work. But liberal economists such as Robert Reich, former secretary of labor in the Clinton Administration, and New York Times columnist Paul Krugman have a very different viewpoint — often stressing that unemployment benefits, a temporary measure, are good for the economy because they encourage spending while the unemployed are looking for work. Krugman and Reich view unemployment benefits not as a handout, but a hand up.
CNBC's Iacurci quotes Konkel as saying of enhanced unemployment benefits and their effect on the U.S. economy, "I don't think it's the whole puzzle. I think it's one piece of the puzzle."
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