Op Ed: The Unemployment Safety Net Is Not Very Safe at All

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By: Hamilton Nolan

If you are unfortunate enough to be one of the 12 million officially unemployed Americans today, there are a few things you can do to pull yourself up by your own bootstraps: 1) Be born wealthier; 2) invest your copious disposable income in a diversified portfolio of stocks and bonds and wait 30 years; and 3) do not believe your country's empty promises to you.

Unemployment benefits, which had been extended during the depths of the recession, are now being cut back across America. Sounds okay on a macro level, maybe, but it's not much help for the long-term unemployed. Since the length of eligibility is set on a state by state basis, workers in different parts of the country face drastically different safety nets. None of this is necessarily rational. The WSJ reports:

But the duration of benefits doesn't necessarily match up with states' economic situations. Alaska, for example, currently offers the longest unemployment benefits, at 86 weeks, despite an unemployment rate of 6.7%, well below the national mark. Georgia and South Carolina, meanwhile, both offer newly unemployed workers less than a year of benefits despite unemployment rates of 8.7%. Nationally, states now offer 55 weeks of benefits on average; the average unemployed worker has been out of work for 36.9 weeks, but about a quarter of job seekers have been looking for at least a year.

States are indebted to the federal government. They in turn slash unemployment benefits in order to limit tax increases, ostensibly to ensure that businesses can keep hiring. If businesses don't hire—if they sit on hoards of cash like, you know, the world's biggest corporations—the outcome is simply that the long term unemployed are left with no job and no benefits. Perhaps they should move to Alaska.

Even sadder is the plight of unemployed veterans, poignantly illustrated by Greg Jaffe in the Washington Post today. Everyone—politicians, civic leaders, business owners—pays lip service to hiring veterans who have returned from war. The reality, though, is that veterans face not only the same tough job market as everyone else, but their own set of unique disadvantages: resumes with little private sector experience, trouble adjusting to civilian life, and often significant psychological damages from their experience in war.

Jaffe's story follows Captain Mike Bolton, an Oklahoma Army National Guardsman whose job is to help find jobs for his fellow veterans. For the 180 veterans he's actually placed in jobs, "The average pay is $32,000, less than the brigade's lower-ranking soldiers made in Afghanistan." At the end of the story, Bolton himself is laid off. Perhaps he can move to Alaska.

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Unemployment benefits do not make economic sense. And big corporations only hire people when the value a person can add to a company translates into profits. Over a decade ago, Starbucks made the mistake of constantly building and hiring new employees, as a result, they started losing a lot of money. Any business that goes from a small business, to a big business, will experience a slowness in growth due to the fact that they have either covered most of their market, or are prevented from growing any further by monopoly laws, so corporations cannot hire people whenever they want to. Corporations have to keep large amounts of money on hand to pay for their expenses, to combat natural downturns in the economy, and to invest in new opportunities.

There is no job scarcity. There are just many jobs available that people do not want or are not qualified to get. Labor is a resource the same way steel and salt are resources, so unemployment is just economics way of showing when the labor resource is unneeded.

And people need to stop looking at big corporations like their machines, or mainly made up of wealthy people. All big corporations are mostly financed by money from everyday people, either through private investment or financial institutions such as banks and pension funds. Whenever the media, or people in general, are talking about all of the money big corporations make and suggest that it somehow be taken away, they are unconsciously talking about reducing most Americans retirement money.