Saturday, October 9, 2010

On the Issues: Unemployment Benefits

Many Americans have been depending on unemployment benefits as their main source of income during this recession. Given that unemployment benefits are a type of insurance that is paid for by employees while they work, you would think there would be no question as to a person's right to these benefits.

However, recent declarations by Republican candidates, and in conservative opinion columns, throws this right into question.

Alaska Republican Joe Miller, who is vying for the U.S Senate seat in that state this November, has questioned the constitutionality of unemployment benefits.

In response to his claim, the New York Sun, a former broadsheet that now publishes online, wrote an editorial in support of Miller.

For the record, a lot of people agree with him, including a number of Supreme Court justices. It may yet be that, as our country bores down to constitutional bedrock in the great political struggle under way today, a new generation of justices will take a new look at the question.

A number of conservative blogs have also chimed in to support Miller. Other Republican candidates have been supporting mandatory regular drug tests for people on unemployment benefits.  If people fail these drug tests, they could be denied benefits.

Republicans have balked at extensions of benefits during the recession, although in the end some have crossed over to support Democrats and pass these extensions.

However, should the situation deteriorate, future extensions could fail in a more conservative environment. 

The Democratic stance is that extensions are necessary because of the extraordinary recession -- the greatest since the Great Depression -- that continues in the form a jobs recession.  By not extending benefits, people will run out of money and will hardly be in any position to help with the consumer economy.  In some cases, loss of benefits could result in people losing their homes and contributing to the depressed housing market.

Also, the Democrats are defending unemployment benefits rather than questioning their constitutionality.

The Tea Party has been pushing libertarian sentiments that threaten not only unemployment benefits but also Social Security, minimum wage laws and a host of  other "safety net" items that Americans have come to expect.  Unfortunately, mainstream Republicans -- many fearful after Tea Party primary victories -- have at times been voicing support for such extreme measures.

President Obama Speaks on September, 2010 Jobs Numbers at Ernest Maier Block in Maryland
President Obama speaking at a family business in Maryland.

1 comment:

Ed Dolan said...

I am not a judge of the constitutional legalities of federal vs state unemployment laws, but moving unemployment insurance to the states raises some daunting practical issues

First, not all states are hit equally by unemployment. Enlarging the pool covered by insurance benefits everyone by spreading risk, for much the same reason as it is easier for large employers to provide health-care coverage than for small ones to do so.

Second, unemployment benefits, as a transfer from the federal government to states, help the hardest-hit states to manage their budgets. This moderates the business cycle for the whole country.

Discussions of what is wrong with fiscal policy in Europe often point to lack of center-to-regional transfers as a source of instability, one of many factors that is behind disasters like Greece and now Ireland. We should learn from the mistakes of others, not copy those mistakes!

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