Liberals argue that extending unemployment insurance (now to 99 weeks) is necessary to prevent real hardship among American working families affected by the recession. They accuse conservatives of being heartless brutes, ready as always to step over the starving in the streets.
Conservatives argue that providing generous unemployment benefits indefinitely is a huge disincentive to going out and finding a job. They accuse liberals of trying to create a permanently dependent class by using the “bread and circuses” policy that eventually undid the Roman Empire.
To an extent they are both right. When a family’s main breadwinner is suddenly thrown out of work, that family can suffer real hardship unless it has substantial economic resources to fall back on. But if unemployment insurance is too generous, then workers become too picky about what new job they are willing to accept. After all, unemployment benefits and some off-the-books work on the side can add up to nearly what some families at the lower end of the socio-economic spectrum were earning before the breadwinner lost his or her job.
So how about this as a way to help the unemployed while not disincentivizing them from actively looking for work: have the unemployment benefits decline — say 5 percent a week — until they disappear after 20 weeks. If there is a severe recession causing rising unemployment, the benefits could be renewed for another 20-week cycle. This would keep food on the table but also give the beneficiaries a strong incentive to search for a job sooner rather than later and perhaps take one that is less than ideal.
Just a thought.