Laid off workers rent summer home.

[GrimJack]

Let's look at some numbers - there are about 15 million people unemployed due to job losses over the last couple years. In May, there were 41,000 new jobs created, temporary help service jobs were about another 31,000. The change in total nonfarm payroll employment for March was revised from +230,000 to +208,000, while the change for April remained at +290,000. This does not count the number of new job-seekers entering the workforce - job creation is not even keeping up with the number of people graduating and/or otherwise just starting to look.

The pace of layoffs is slowing but the number of job-seekers now out number the jobs by a ratio of 6 to 1. Please explain how kicking people off of UI is going to force them to get jobs. This is not a laziness issue; it is not a disincentives issue. No one gets rich collecting UI; I doubt anyone on UI can make their house payments without other income.

[maat55]

Let's look at some numbers - there are about 15 million people unemployed due to job losses over the last couple years. In May, there were 41,000 new jobs created, temporary help service jobs were about another 31,000. The change in total nonfarm payroll employment for March was revised from +230,000 to +208,000, while the change for April remained at +290,000. This does not count the number of new job-seekers entering the workforce - job creation is not even keeping up with the number of people graduating and/or otherwise just starting to look.

The pace of layoffs is slowing but the number of job-seekers now out number the jobs by a ratio of 6 to 1. Please explain how kicking people off of UI is going to force them to get jobs. This is not a laziness issue; it is not a disincentives issue. No one gets rich collecting UI; I doubt anyone on UI can make their house payments without other income.

Can you explain how paying people to not produce is a healthy option?

Can you explain how keynesian economics is going to create an robust jobs market?

We went through 10+ years of Depression during the thirties with no sound results. We are repeating this process again. We need deflation and for government to take the chains off of the free market. Government has to cut spending(this includes social programs), stop taxing production and investment, end minimum wage and stop spending billions on nation building overseas.

We cannot afford these failed policies any longer.

[disneysteve]

for government to take the chains off of the free market.

This is so true. There was a book a number of years ago. I think the title was "The Death of Common Sense." It detailed how inane government regulations cost businesses millions and millions of dollars in compliance costs without really accomplishing much of anything. Government regs decrease productivity, increase costs and stifle progress at every turn.

Just this past weekend, I was speaking to a relative who works on Wall Street. He works for a very small financial firm of 10 people. They are small but successful, managing a couple hundred million in assets. The problem is that government regs make no distinction between a firm with 10 people, 1,000 people or 10,000 people. His firm is being forced to comply with regulations that really make absolutely no sense given the size of their operation. As if that isn't bad enough, the estimate they've gotten for the cost involved in implementing what needs to be done is well over $200,000 for this year alone. He and his partners would like to expand the business and hire 1 or 2 more employees but due to the compliance costs, they can't. It is stuff like this that needs to stop. Let businesses do business without one hand tied behind their backs. Let the market function efficiently.

[disneysteve]

GrimJack, I don't deny that there is an employment problem. I do doubt the accuracy and validity of any and all attempts to measure the extent of that problem. I don't think anyone really knows or can really measure how many people are truly out of work against their will. It is right up there with the zillions of dollars we are wasting on our national census this year to try and perform an unperformable task.

It is also very important to keep in mind that the national unemployment rate tells you little to nothing about the unemployment situation in any particular locale. Throughout the recession, I never stopped seeing help wanted signs in my area. I never stopped seeing new stores, restaurants, houses and offices being constructed. New stores and restaurants continued to open on a regular basis. I can think of two major electronic retail chains that have opened multiple stores in this region just within the past year or so, for example. So maybe an unemployed person in Michigan needed to look east to New Jersey to find work. And I'm sure there are other parts of the country that also held up well during the rough times. Before UE existed, it was an age-old tradition for workers to migrate to where the work happened to be. Today, however, people are more likely to stay put and collect unemployment rather than seeking out work. Someone called into Dave Ramsey recently and was saying that his wife was out of work and couldn't get a new job because the only job she could find was a 1 hour drive from home. Dave's answer, of course, was so what. If she has to drive an hour in order to work, so be it. She should drive an hour. That was no excuse not to work and certainly no excuse to default on your financial obligations.

I have many friends, relatives and patients who run businesses. One complaint that I hear from them over and over again, through good economic times and bad, is that they can not find enough quality workers, workers who will show up on time every day, workers who will put in a productive 8 hours, workers who won't call out at the drop of a hat. I even see it in my own office. In addition to our medical practice, we run a drug and alcohol testing company. We have the hardest time finding and keeping collectors. We have trained a couple dozen people over the last 2-3 years. Some never finish the training because they decide they just don't like the job - rather selective for someone without one. Of the people who do make it through the training (which isn't all that involved or difficult), most turn out to be too undependable to employ. This is an on-call type of job so we need people who will answer their phones when called and report to the job site within 60 minutes. You'd be amazed at how few people are capable or willing to do that, even after going through the training and knowing exactly what is expected of them.

Sorry for the lengthy post. My point is that there is almost always work to be had for someone who wants to work. There may be some sacrifices involved, like a long commute or even living apart from family for a period of time, but it beats sitting around collecting UE. When I was out of work, I was looking into the possibility of doing locum tenens work (basically temp work for physicians) if I didn't find a full time position. That could have meant traveling anywhere in the country for as short as a week to as long as a few months at a time. I didn't want to do that but if that's what it took, that's what I would have done.

[maat55]

[QUOTE]

I have many friends, relatives and patients who run businesses. One complaint that I hear from them over and over again, through good economic times and bad, is that they can not find enough quality workers, workers who will show up on time every day, workers who will put in a productive 8 hours,

My guess is that way too many people are just riding unemployment because they can and do not wish to work for less money until they are forced to.

My best workers, by far, have always been hispanics.

[disneysteve]

[QUOTE=maat55;263029]

My guess is that way too many people are just riding unemployment because they can and do not wish to work for less money until they are forced to.

I have one patient who was actually forced to downsize his business a while back because he was unable to find dependable workers. And that was in the early days of the recession. He runs a trucking company and ended up having to sell off a couple of his rigs and give up some contracts due to the lack of employees. I find it hard to believe that there aren't one or two out of work truck drivers out there somewhere collecting UE.

[Scanner]

Look. . .I never said I wanted to scrap unemployment insurance totally. . .I just don't think you should rent a beachhouse in an upscale beach community when you are on it, that's all.

Is this so unreasonable, so radical of a suggestion?

I know we live in interesting times.

I read a book by Steven Covey (I think it was him - maybe it was the controversial Pat Kisoysaki) who said our economy is evolving away from a "selling your labor" type of economy like when were industrialized.

We just don't need laborers anymore like we used to.

I agree a lot with what DS says but I don't think it's as simple as moving around where the factories are (or businesses). . .I think to get ahead it takes something more, removing yourself as just a simply "labor commodity" as someone who needs a job.

I don't necessarily want all of my kids to be self-employed/business people. But I do want them to "think that way." I want them to think of themselves as a business and that they have to not become a "commodity" in the marketplace.

Well, this is probably way off topic at this point.

[disneysteve]

Look. . .I never said I wanted to scrap unemployment insurance totally. . .I just don't think you should rent a beachhouse in an upscale beach community when you are on it, that's all.

Is this so unreasonable, so radical of a suggestion?

Here's a thought. When you rent a vacation home, you often pay well in advance of the trip, sometimes even at the time of booking. That family may have already laid out the money for that rental months earlier while still employed. At that point, they probably figured the money was already spent. They might as well use it.

I've posted before that when I was out of work, my wife and I took a 1-week trip to Vegas to attend a conference. I had already paid for the conference. I had already paid for the airfare. I did need to pay for the hotel and food but that wasn't a big deal. We had the savings to cover it.

Also while I was out of work, we took an unplanned 10-day trip to Disney World. We had annual passes so our park admission was paid for. We stayed at a dumpy EconoLodge for $23.95/night. We drove down and ate cheap. Sure, we could have stayed home but we chose to take advantage of my free time.

Of course, we weren't on unemployment. We were paying for everything with our own money. Had I been collecting UE, I could see myself doing the exact same thing, though.

[GrimJack]

[QUOTE=disneysteve;263030]

I have one patient who was actually forced to downsize his business a while back because he was unable to find dependable workers. And that was in the early days of the recession. He runs a trucking company and ended up having to sell off a couple of his rigs and give up some contracts due to the lack of employees. I find it hard to believe that there aren't one or two out of work truck drivers out there somewhere collecting UE.

Was your patient running a long-haul company? Was your patient doing local inter-modal work? I actually have some recent experience in this area and am interested a little more info as I find it hard to believe that your patient sold off some of his rigs because he could not find drivers - there is more to this story. Where in the inter-modal chain did he fit? What kind of rigs did he run? Is there a port nearby? How old were the rigs he sold? What did he offer as inducements?

Do you really believe you patient sold some rigs solely because he could not find drivers? Have you ever talked with a truck-driver about life as an owner/operator vs driving for someone else vs this patient who was running company with multiple rigs? He gave up contracts because he could not fulfill them; if he could not fulfill them it is because he could not get drivers at a price that would allow him to earn a profit.

Your presumption is that there are lazy truck drivers sucking on the Unemployment Insurance teat rather than working for your patient - I would think there was something wrong with your patients offer of work. Trucking is about operating on razor-thin margins, if he could not find drivers - he could not attract drivers.

You are a doctor so I imagine that you know the difference between owning your own practice vs owning a clinic in partnership with other doctors vs working with a hospital - I don't know about any of that (and probably don't even know enough to ask the proper questions) but what sorts of things would you need to know to choose? There are complex issues involved in all life decisions that are probably more complex than grousing to your doctor about how tough life is and whining about how hard it is to get good help.

[asmom]

Please explain how giving people a check every week helps get them back to work sooner.

It doesn't because it isn't intended to. UE is merely a stopgap measure to provide people with a means to provide for basic necessities until they are able to find a job again. That is why it does not completely replace your income and it is time-limited.

It isn't about data. It isn't about anecdotes. It is human nature. Two sayings come to mind: 1) Necessity is the mother of invention and 2) Desperate times call for desperate measures. When their backs are against the wall, people will do whatever they need to do to feed their families. That might mean working 3 part-time jobs. It might mean moving away from their families to find work. It might mean getting other family members to get jobs to help out. When someone knows there is a weekly check coming every week for the next year or two, where is the motivation and sense of urgency to do everything possible to find work?

And I think this is the basic point we will have to agree to disagree on. It comes down to what you believe about human nature. Do people really only work for a paycheck? There's no other motivation? Are most people really so craven that merely being provided a "freebie" is enough to discourage them to work? I just don't buy that. Yes, there are users and goldbricks; always have been, always will be. But [I believe] most people have a sense of pride from being able to provide for themselves and their families. Most people want to be productive. And for most people, being provided a check at a fraction of what you used to make would not be enough to keep them from trying to reenter the workforce at any level, in any way possible. Last year, 700 people applied for a school janitor job Steve.

So like I said, it comes down to your basic view of humanity. Are most people motivated and humble or are they lazy and easily defeated by a freebie as you believe? Who knows?

[GrimJack]

Can you explain how paying people to not produce is a healthy option?

Well, let me explain - someone is not working, there is no work for this person so this person has no income but continues to have expenses. He is not buying food at the local store, he is not producing AND he is not contributing to the economy. He has been paying into an insurance program (along with millions of other people and employers - removing this money from the economy) and now he is withdrawing money from this insurance program so that he can continue to look for work and keep himself fed, clothed, and housed. This keeps the economy running, the stores open and those workers employed.

Can you explain how keynesian economics is going to create an robust jobs market?

Nope - I have not studied Keynesian economics or any of the U of C economics. You want the explanation, google it and argue with yourself.

We went through 10+ years of Depression during the thirties with no sound results. We are repeating this process again. We need deflation and for government to take the chains off of the free market. Government has to cut spending(this includes social programs), stop taxing production and investment, end minimum wage and stop spending billions on nation building overseas.

can you explain how deflation will help anything. Interesting that when you say stop government spending you don't reference war or the military (though you might be referencing the war when you use the phrase nation building). How will ending minimum wage help anything? How will an unfettered free market do anything good as this implies no testing products for safety, no quality control on food products (we see unfettered free-market in of all places China), no quality control of products. Read The Jungle if you want an idea of what unfettered free-market economies produce (including what life is like w/o minimum wage).

We cannot afford these failed policies any longer.

We cannot afford your idealization of a failed economic model.

[GrimJack]

[QUOTE=maat55;263029]

My guess is that way too many people are just riding unemployment because they can and do not wish to work for less money until they are forced to.

My best workers, by far, have always been hispanics.

My guess is that your guess is just wrong. What sort of business are you in?

[cptacek]

It doesn't because it isn't intended to. UE is merely a stopgap measure to provide people with a means to provide for basic necessities until they are able to find a job again. That is why it does not completely replace your income and it is time-limited.

It was limited to 26 weeks. Now it is "limited" to 99 weeks, plus a subsidy on your health insurance, and every effort is being made to extend it more. 99 weeks is 5 weeks short of 2 years!

[disneysteve]

[QUOTE=GrimJack;263037]

Was your patient running a long-haul company? Was your patient doing local inter-modal work? I actually have some recent experience in this area and am interested a little more info as I find it hard to believe that your patient sold off some of his rigs because he could not find drivers

He actually has a dump truck business. It has been a while since I heard the story so don't recall the details. I just remember him being very frustrated that he had to pass up work while he had perfectly good trucks sitting idle.

[disneysteve]

It doesn't because it isn't intended to. UE is merely a stopgap measure to provide people with a means to provide for basic necessities until they are able to find a job again. That is why it does not completely replace your income and it is time-limited.

I do not have a problem with UE existing. I think it is a valuable program. I just think that in recent months, it has gotten out of hand with the ongoing extensions. As I said earlier, all insurances have coverage limits. Benefits cut off at a pre-determined time or dollar amount. If I wreck a $10,000 car, my auto insurer will not send me a check for $20,000. If my medical insurance has a $1,000,000 cap and my bill is $1,500,000, I'm on the hook for the last $500,000. As for UE, I think 99 weeks is simply too long and it is being paid from an insurance policy that was priced based on 26 weeks of benefits. How is that working exactly?

Do people really only work for a paycheck? There's no other motivation?

Most people want to be productive.

I think wanting to be productive and working for a paycheck aren't necessarily one and the same. There are plenty of ways to be productive and not all involve a paycheck. I am currently vice president of our synagogue. That puts me on a very short list of candidates to be president next or in the near future. I would love to take on that position but simply don't feel I have the time in addition to my job. If I hit the lottery tomorrow, I would happily trim down the scope of my job, cut my hours significantly and accept the president job next year. I would still have pride in my work and feel I was being a productive member of society.

How will an unfettered free market do anything good as this implies no testing products for safety, no quality control on food products (we see unfettered free-market in of all places China), no quality control of products.

I think there is a sane and reasonable place between no regulation (The Jungle) and micro-managed over-regulation (The Death of Common Sense)

It was limited to 26 weeks. Now it is "limited" to 99 weeks, plus a subsidy on your health insurance, and every effort is being made to extend it more. 99 weeks is 5 weeks short of 2 years!

Exactly.