Jobs vs. unemployment handouts

By Jason Mercier, Evergreen Freedom Foundation

First Boeing announces 30,000 plus layoffs. Then comes word that Washington now has the highest unemployment rate (6.6%) in the nation. This must mean that now is the time to extend and increase unemployment benefits, right?

Wrong.

Wait, before you burn me at the stake as a heartless heretic who you are convinced would be the first seeking an unemployment check if shown to the door tomorrow, let me challenge your conventional thinking about unemployment insurance.

For those who chose to claim unemployment insurance, it is important to understand why it exists in the first place. In theory the program is there to offer a temporary hand up during hard times while individuals are diligently seeking new work. In practice, unfortunately, the program bears a striking resemblance to a welfare handout.

As an avid supporter of free-market principles, if given notice of a pending layoff, I would neither seek nor accept unemployment benefits. It is not the job of other workers to provide me income for work I am not doing. My decision would be to slash my budget while accepting any paying job so as to meet living necessities while continuing a vigorous job search. The credit I have on hand for emergencies would be used to make up any short-term financial difference in income.

While this would be my choice, it may not be possible for everyone. However, before we even think of increasing unemployment payouts for those who would claim benefits, the program’s current practice needs serious examination.

Extending and increasing unemployment benefits will only make a broken system worse. Already businesses (i.e. worker salaries) are taxed at onerously high rates to pay into an unemployment insurance system that perpetuates unemployment. The current system is full of perverse incentives to remain unemployed. One example is the total lack of accountability for payments being received. Individuals claiming unemployment benefits only need to "dial for dollars" by making three job search phone calls a week. As a result of a recent change in the law, claimants are no longer required to set foot in an unemployment office or even visit a place of business to inquire about employment. Instead, they can simply log three phone calls per week and report them to Employment Security Division as job search progress. This is not a diligent work search in action.

Understanding the current state of the unemployment insurance program, I have a simple question for those who feel we should tax working individuals more so unemployment benefits can be extended and increased rather than simply maintained at current levels.

Would you rather: A) jobs be created and retained or B) see increased unemployment by redistributing monies from working families and businesses in the form of increased and extended unemployment payments?

If you answered B, I suggest you refer to the success (or lack thereof) of communism. However, to those who answered A, congratulations on making the connection between the amount of money (profits) available to businesses and their ability to provide for and create jobs.

The money that businesses are forced to pay into unemployment taxes and other welfare programs eventually adds up to the amount necessary to afford a new employee or retain a current one. On a level closer to home, the money your employer is spending into these programs can be directly traced to the lack of increases in your paycheck. Someone else is not paying for these benefits, you are! The money left in the hands of businesses eventually provides employers the ability to increase salaries, hire new employees, or retain current jobs.

If we truly are concerned about the level of unemployment in the state and the fate of those who now find themselves unemployed, rather than worsening the situation by further redistributing capital from businesses (i.e. jobs) to welfare programs, we should instead look to facilitate a climate within the state that allows businesses to flourish. Remember, as business profits grow so do salaries and the number of jobs available in the state.

Like it or not, new jobs and extended and increased unemployment benefits are mutually exclusive. True compassion is not to offer a hand out but instead to offer a hand up for Washington workers. The choice we face at this economic crossroads is simple: increased employment or increased handouts.

Jason Mercier is Deputy Communications Director for the Olympia-based Evergreen Freedom Foundation. He can be reached at (360) 956-3482 or jmercier@effwa.org.

Contact: Jason Mercier, Deputy Communications Director, (360) 956-3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org