Unemployment: A Help Or Hindrance?

Submitted By kris801
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Unemployment: A help or hindrance? In 2007 the United States began to experience a decline in economic activity, a slowdown of business activity and a reduction of goods and services being sold or manufactured. At the time, the country looked economically strong. The national unemployment rate was at 5% and many Americans were not too concerned with unemployment and the existing policy; which nationally gave 6 months unemployment benefits to those who lost their jobs at no fault of their own. By June 2009 the unemployment rate was at 9.5% (BLS). At the height of job crisis, unemployment benefits could be extended up to 99 weeks. That is almost equivalent to two years. Since unemployment insurance was designed for short-term job loss, the country has watched arguments from both sides of the aisle to compromise on benefit extensions. Are these extensions vital in helping those in need or does it discourage people from seeking employment? Millions of Americans who were once prosperous found themselves in financial distress. To receive benefits, one must meet all requirements and proceed in verifying eligibility. In Utah unemployment benefits pay 60% of the average weekly earnings during your base year period up to $451 a week (Doyle). In essence these individuals are taking a 40% depreciation in income. According to a survey conducted by bankrate.com, 76% of all employed are living paycheck to paycheck with no emergency savings (Johnson). That is roughly 4 out of every five Americans. To say that most unemployed are living off of unemployment by choice would not be consistent with the data showing 4 out of 5 employed Americans are already living paycheck to paycheck. My husband was laid off last year. We have a mortgage and many bills to pay each month. Instead of $3500 to survive on each month we receive about $1800 each month on unemployment. It has taken a lot of adjusting and pulling out of savings to make ends meet. Are we living this way out of choice? No, but some may argue that a percentage of individuals on unemployment are okay with living on unemployment and therefore, may pass up job opportunities.
An article by Andrew Malcolm, “Job Growth Is Helped By End of Extended Unemployment,” suggests that by ending benefits it will force people to enter the workforce. In July, a statistic was released showing that long-term unemployment has dropped by 1.1 million (Malcolm). Critics attribute the drop to the increase in job availability, but mostly due to unemployment benefits running out in the beginning of the year. By ending unemployment extensions, it encourages people to seek out jobs and therefore, taking away the safety net.
If people choose to keep extending their benefits, the Country’s deficit will continue to increase. As a result, the National debt has surged past $17 trillion (Amadeo). Critics of extending unemployment point to these numbers when objecting to additional funding arguing that the reason debt has climbed is because not enough American are working and contributing to the economy. Therefore, in order to extend benefits, the budget must be cut to allow for this. For example, in 2012 North Carolina became the first state to decline extended long-term benefits. Since ending long-term benefits, there has been an upswing of job growth and the unemployment rate has decreased. In July of 2013, the monthly federal extension benefits ended, the state’s unemployment rate was at 8.1%. The rate dropped to 6.4% in less than a year (Gleason). Critics use this example to show that by ending long-term extensions it will result in job increases. Senator Hagan, an outspoken critic of North Carolina exiting the unemployment extension program, called it “cold hearted” (Gleason). There are some who say that morally the government’s duty and responsibility is to help its citizens during an economic recession, where millions find themselves without jobs. The purpose of unemployment is to
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