The Wrong Guidepost re the UI Extension

January 15th, 2014 at 4:59 pm

So I’m driving into to work this AM and I hear Sen. Grassley being interviewed on why he opposes extending long-term UI benefits.  And so I had to write this, over at the NYT Economix blog.


Sources Actual, BLS; “Counting some…”, my calculations;  “Counting all…”, Shierholz, EPI

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7 comments in reply to "The Wrong Guidepost re the UI Extension"

  1. SeattleAlex says:

    JB why do we even compile our unemployment data thusly? Presenting it as a single “representative” number seems to lead to a lot of Grassely type misrepresentations.

    • Jared Bernstein says:

      Yes–that’s certainly a fair point–I’ll maybe write something on this soon. It’s not been a big problem in the past because the labor force rate hasn’t been so cyclical itself–it didn’t fall nearly so much as it has recently.

  2. smith says:

    I think it’s misguided to say we need extended unemployment benefits because the rate is actually higher than 6.7%. 6.7% is high enough. The trouble is Obama never knows whether to say things are good, or bad. He also has trouble pointing out the hypocrisy, the double standard. Republicans pay no penalty because the unemployed are never Obama’s sole focus or priority, even though they should have been from day one.
    Why let Republicans off the hook? Bernie Sanders doesn’t:
    which included this quote from the director of the National Economic Council…
    “All five times — all five times that the previous President Bush extended emergency unemployment benefits, there was no pay-for strings attached and the unemployment rate was lower each of those five times than it is today.”

  3. Dave says:

    I think what we need is a new economic measure: The unjustly employed survey.

    This would be a survey discovering specific politicians, journalists and other incompetents that should be unemployed but for some reason remain employed.

  4. Perplexed says:

    What would be of much more help to the unemployed (and the employed) than extension of unemployment benefits would be mandatory contributions by employers to a “legal defense fund” for the unemployed. This could be done at a very tiny fraction of overall labor costs and finally insure that the unemployed, who have no political representation, would at least have legal representation. As it is now, they have neither, which is why they can be so easily coerced and subjected to “tyranny of the majority.”. With real legal representation, they could challenge the Constitutionality of the 1914 Clayton Act which prevents them from having access to equal protection under the law. (Shouldn’t be too hard as the Act specifically legislates unequal protection). This way they could force economists to explain to Federal judges exactly how allowing employers (including the government) to deny access to those seeking to sell their product (their labor) doesn’t violate anti trust laws and result in market manipulation just as it does in EVERY OTHER commodity, product or service. Economists could explain to the judges (and to the unemployed) EXACTLY why if this restriction is good for labor, why it isn’t allowed in ANY OTHER market. I think everyone would like to see exactly, you know, scientifically, why the unemployed should not have access to equal protection under the Constitution as producers of EVERY OTHER product or commodity do. If exclusion of some producers from the “market,” without fully compensating them for their losses, is a good thing for a “market economy,” maybe we should apply it everywhere and then we’ll actually have “equal protection.” Why not just legalize “cartels” for every product or service and avoid the equal protection issue altogether? If coercion and market manipulation are problematic for EVERY OTHER commodity and product, just how is it that coercion and market manipulation are beneficial to the labor market? I suppose that really depends on which side of this market you happen to be on doesn’t it?

    Legal representation for the unemployed would also benefit the employed as It would help all producers of labor (you know, the 95%), as they too would be protected from tyranny of the majority and employer coercion of all sorts. It would finally allow them to “pool the risks” of insufficient demand for their “product” and empower them by providing that there would “always” be a market for their services, and they could not be excluded from it by the whims of any employer or group of employers.

    Maybe the protections supposedly guaranteed by the “Equal Protection Clause” of the U.S. Constitution would prevent the unemployed from being victimized twice, once by the market exclusion and all of the associated costs, and a second time by Republican and so called “job creators” who cast dispersions on them by calling them lazy. Maybe Loser Liberalism isn’t the solution after all. Instead, lets enforce equal protection under the law and then we can actually find out who’s really lazy.

  5. smith says:

    1) Why hide and obfuscate ( ) a simple argument against unions? (being the word ‘union’ doesn’t appear in the comment)
    2) A simple and clear statement would go something like this: where unions represent workers and bargain collectively for them, workers are not free to lower wage demands in an economic downturn. The result is layoffs for the few instead of lower wages for everyone, the effect of the downturn is concentrated on the unlucky few instead of being shared.
    3) Unions are able to enforce this system in part because they are exempt for anti-trust law (per Clayton Act of 1914)

    This blog has favored a system used in Germany to address the problem by having the state subsidize wages in a downturn when workers share reduced hours. This is very different from businesses being able to reduce wage rates. It is also very different from having the government subsidize wage rates. Is also different from U.S. system where downturns are sometimes used as an excuse to get rid of dead wood, or replace experienced higher paid personal with younger lower wage employees.
    One could also argue that unemployment insurance could or should be higher and more uniform nationally, but adjusted for regional cost of living differences. This is the case in many parts of Europe.

    • Perplexed says:

      -“a simple argument against unions? (being the word ‘union’ doesn’t appear in the comment)”

      Why would you try to make this about unions? Has the possibility not occurred to you that word “union” didn’t appear in the comment because the comment had nothing to do with unions (except to the extent that union employees are also “employees” in the larger sense?) I haven’t checked the actual numbers but It seems highly likely that there are more people unemployed and underemployed in the U.S. right now than there are people represented by unions.

      -“3) Unions are able to enforce this system in part because they are exempt for anti-trust law (per Clayton Act of 1914)”

      There is nothing in the Clayton Act restricting the exemption of “labor” from anti trust laws to unions. Every employee in the U.S. is denied access to equal protection of anti trust laws by the Clayton Act. Every employer in the U.S. is able to enforce this coercive system against all of its employees precisely because they are protected from the treble damages they would incur if they attempted to do this with the market for ANYTHING ELSE they might possibly buy. This is EXACTLY WHY we have a “Bill of Rights” and an “Equal Protection Clause.” They are designed specifically to address this type of action which it was well known, and often discussed, as it is so likely to be produced in a democracy. The protections against this were incorporated into the Constitution just to make sure it couldn’t happen as it was well known, it could destroy a democracy if allowed. There is however, no enforcement provision in the Constitution. Infractions can only be addressed though the courts, and, if not addressed, can continue (in this case for 100 years) if unchallenged (if you believe your Fourth and Fifth Amendment Rights will actually be enforced without lots and lots of attorney fees (and even then its a “flip of coin” proposition), you likely aren’t very familiar with actual court practices in the area; read the Miranda decision sometime and see if you think anything like what it demands is really being practiced with defendants that can’t afford the “Constitutional coverage”).

      The “paternalistic” view of employers as “honorable people” who were “looking out for their employees” was widely promoted in 1914 (propaganda is nothing new just because of cable news entertainment shows), and to some extent, there was some practice of a “social contract” with some employers. These mores ( are long past now (as if they were ever really widely practiced anyway), as paternalistic employers have turned instead to “eating their young” using these advantages they and their lobbyists (nothing new either) have ensconced in law in violation of Constitutional protections. Without enforcement (which is nowhere provided for in the Constitution as the Supreme Court itself depend on “voluntary cooperation” of the lower courts with its decisions; it has no power to enforce that its decisions are followed and can only overturn those brought before it), there are no Constitutional protections, the document becomes nothing more than “words on paper.”

      -” The result is layoffs for the few instead of lower wages for everyone, the effect of the downturn is concentrated on the unlucky few instead of being shared.”

      Unions or not, why would you think this OK to do in a democracy? What if the “majority” decided it was better that a few be denied some life saving vaccination so the “majority” could be better off? What if the “majority” decided that the power to decide who gets the vaccination should be vested in employers? Would you think it to be a democratic way to make such decisions? What is it about training in economic “science” that makes tyranny of the majority so invisible to them? Or is it perhaps something genetic about those who choose to go into the field of economics? Is there perhaps a “genetic abnormality” that prevents them from seeing the human impacts of their “scientific” theories. For this undemocratic tyranny to go on for 100 years in the so-called “worlds most powerful democracy” takes much more that a “few outliers,” there must be either a biological, (or possibly a financial) underpinning, to maintain a deception such as this go on for so long. Figure out a democratic way to solve the problem of insufficient demand; there are lots of options if you just take the blinders off, or is economic “science” just incompatible with democratic government and Constitutional protections of individual rights?