Cold-hearted: Democrats to hammer GOP ‘Scrooges’ over unemployment benefits

Matt K. Lewis Senior Contributor
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Next week, 1.3 million Americans who are currently on long-term unemployment benefits will be cut off. The change will impact anyone who has been receiving benefits for longer than 26 weeks. Predictably, Democrats and liberal groups will use this opportunity to hammer Republicans as “Bad Santa.” The headlines almost write themselves.

Republicans will once again find themselves in the unenviable position of being portrayed as “Scrooge.” In response, they will predictably employ the possibly true, but certainly fruitless, argument that people who receive unemployment benefits are actually less likely to seek or accept any work that pays less than their previous job (and that this compounds their problem, inasmuch as the longer someone is unemployed, the harder it is for them to find a job.) This, of course, is logical — but the issue is emotional. And, in politics, emotion almost always trumps logic.

Instead of playing defense, Republicans ought to insist someone on the other side answer the following questions: First, “How long should this emergency program last?” If 26 weeks isn’t enough, then is 73 weeks enough? 99? Will there ever be a point when the government should quit paying people not to work?

Second, “Why can’t we pay for the extension?” If this is worth doing, then it’s worth paying for. Rather than opposing this program, Republicans should support it, providing the additional revenue comes from other, less important, spending.

Third, if this is so near and dear to their hearts, why did Democrats just agree to a budget deal that doesn’t address this issue?

Aside from asking these obvious questions, there is another thing Republicans must do, and that is to attack the very premise that unemployment benefits are the only tool at our disposal. They aren’t a panacea. They’re not even a very good band aid. They are a concession of failure. The obvious problem isn’t that unemployment benefits are expiring, but that we aren’t creating enough jobs. And, obviously, that is an indictment on the Obama economy.

Rather than simply criticizing Obama’s economy, however, conservatives should also propose some creative solutions that could be used either instead of, or in tandem with, extending unemployment benefits. I’ve written about this before, but it may be worth revisiting some ideas put forth by AEI scholar Michael R. Strain in NRO. A while back, I excerpted (and simplified) some of Strain’s most interesting ideas. Here is an additionally revised version:

1. Relocation subsidy. “Needless to say, it would be significantly easier for many workers to get a job in North Dakota than in Nevada,” writes Strain. “But many unemployed Nevadans may lack the financial resources to pick up and move. An employment program should include a relocation subsidy to help the long-term unemployed move from high-unemployment areas to low-unemployment areas, as suggested by economist Enrico Moretti and others.” (An obvious obstacle to this would be people who are upside down on home mortgages and can’t afford to leave.)

2. Provide lump-sum bonuses to unemployed workers when they get a job. “Surprising as it may seem, there is a lot of evidence in the economics literature that little nudges like this can have large effects on people’s choices,” he writes.

3. Work sharing. “If a firm wants to cut its wage costs by 20 percent, it can fire one-fifth of its workers, or it can tell all its workers to stay home on Fridays without pay. In the latter case, under an option called work-sharing that is available in many places but remains little used, workers would be eligible to receive one-fifth of their unemployment-insurance (UI) benefit.”

Why it helps people: Strain explains that “work-sharing would amount to a pay cut (in this case, one of around 10 percent), but workers would stay employed and retain their benefits.”

What does the company get out of it? According to Strain, this “allows firms to weather a lull in demand without losing the firm-specific expertise present in their existing work forces; it spares firms the time and expense of hiring and training new workers when demand picks back up; and it prevents workers from losing or failing to acquire skills during a period of unemployment.”

4. Temporarily lowering the minimum wage for young and inexperienced workers. “This would give them the opportunity to begin a résumé, learn occupational skills (including the soft skills of professionalism, punctuality, and dealing with a boss), and build a professional network, all of which could lead to better jobs,” Strain avers.

5. A permanent expansion of the Earned Income Tax Credit. “This would make the public, rather than the businesses that hire people, pay for ensuring that working Americans don’t live in poverty.”

(Note: I don’t necessarily endorse Strain’s ideas. But I do think they deserve debate and discussion, especially considering the assumption is that extending unemployment benefits are our only possible tool.)

Republicans can either play Scrooge this Christmas, or they can begin the New Year by offering serious solutions that could actually prove both politically popular and (imagine this!) helpful to struggling Americans trying to make ends meet and survive the Obama economy.

Matt K. Lewis