As I am sure some of you know already I am diametrically opposed to transfer payments. There are plenty of well reasoned arguments about these as automatic stabilizers which have their merits. If you are looking to get into an economic discussion above what my BA in Econ can provide I recommend you read Greg Mankiw, Willem Buiter (even though often counter to my opinion), or Milton Friedman’s Essays in Positive Economics as these reputable economic minds clearly posses a far greater understanding and breadth of knowledge on the subject.
What has concerned me as of late is a particular bent amongst both Keynesian, and so called conservative economic commentators, on the issue of unemployment. My ire was originally stirred up by a post on Business Insider from a former Lehman operations VP complaining about how after being laid off, potential employers weren’t tucking in to bed at night and telling him he was special http://bit.ly/b80dVG I figured this sort of foolishness was a one time thing but have been hounded ever since. Regular updates to my this theme were provided by the frequently linked complaints of Michael Snyder the lawyer/Christian rights activist/I say I am an economist from http://theeconomiccollapseblog.com Yesterday however my brain nearly exploded when reading a NYT story about another “millennial” and our generation’s struggle to secure employment http://nyti.ms/dvbaTk. Enough already.
The past three volatile years on a desk have ingrained one thing upon me that is clearer than all others: there is one true price for everything on earth; the bid. That is it. Now the more apt in the blog/twitter world are quick to criticize real estate owners that cannot bring themselves to price their for sale real estate securities at anything below what they paid for them. This has caused in the eyes of many an unrealized overhang in homes and CRE because, for some reason that I cannot fathom, people think they deserve price appreciation as a God given right. However, we continue to hear hoards of people standing up for people pricing their labor in the very same fashion.
Complaints of this nature have been a long standing tradition in blue collar US labor, but after recent job cuts in higher paying service sector jobs it has become a serious issue there as well. A WSJ article this week cited some anecdotal evidence of this in the engineering field as well as the concern of many economists that, to quote Larry Summers “government assistance programs contribute to long-term unemployment…by providing an incentive, and the means, not to work.” http://bit.ly/9zdJ4j. The aforementioned NYT article shows in painfully frustrating detail the extent at which a grad my age is choosing to price himself out of the financial field. I would recommend that he applies immediately to one of the GSEs, because that is the only place where he might be applauded for his decision to extend and pretend about the value of his input.
If you are a labor input in manufacturing you are right in saying that many comparable jobs have gone to other countries. This is simply because they choose to do the same thing, usually more efficiently at a lower wage rate. That is a choice. If you want to continue to build widgets in US either take a pay cut or learn some new skills. You chose a field that we face a competitive disadvantage in and there are consequences.
If you are a middle aged archetype two kids, mortgage house in the suburbs upset by the terrible cards life has dealt you I suggest you reexamine your decisions. Nobody made you take on debt, nobody told you to have kids, nobody told you to tie yourself to a community. This is not everybody else’s fault. It is yours. The failure to plan for ones life and it’s many variables is nothing short of self destructive. Take whatever job you can get, hell baristas at Starbucks get descent benefits and trust me that a far better existence than what the vast majority of the planet is afforded.
If you just graduated from college in the past few years, first off remember the unemployment rate for college the college educated between 20-34 is still 5.5%, stop complaining. You should be aware that by leaching off your parents that you are depleting their wealth , their future, and likely your own. I know you have been coddled, a lot of people our age have been, but it’s time to apply some rational thought to what you are actually worth in the labor force. Not everybody gets out of school and is a BSD day one.
The rest of you, figure it out. It’s not that hard.
Unemployment benefits may or may not have significant deterring effect on skilled job seekers that will reenter the workforce in a similar capacity, however, the evidence above and my personal observations would lead me to believe that is does. Clearly, this is far from a subset worthy of study. What I can say with certainty though is that is discourages job seekers from taking a rational approach to what the market bid is for the services they can provide. My state is an example that is especially frustrating as it offers up to $900 per week for upwards of 85 weeks. The idea that my tax payments go towards something as absurd as funding people who have failed to either chose to work or plan for a life that does not have guaranteed cash flows is infuriating. Here are some tips. Do not burden yourself with excessive debt, allow yourself to be geographically mobile, buy some bootstraps, pull yourself up by them and stop your sniveling.
PS: don’t even get me started on welfare, food stamps, social security, et cetera.