Today Kentucky Senator Rand Paul came up with an interesting argument for why unemployment benefits shouldn’t be extended.
“I support unemployment benefits for the 28 weeks they’re paid for,” the Kentucky Republican said on “Fox News Sunday.” “If you extend it beyond that, you do a disservice to these workers.”
Paul said a study had shown employers were less likely to hire the long-term unemployed like those who have been on 99 weeks of benefits.
The insinuation is that unemployment benefits encourage people to stay unemployed longer than they otherwise would and that ending benefits would encourage them to get off their butts and get jobs. This is nonsense and it can be shown in one chart.
In this chart, the red line is total job openings vs. the total number of unemployed. As you can see, the number of job openings vs. the number of unemployed remained very low… even lower than the very bottom of the last cycle in the mid-2000s. There just aren’t jobs out there for the unemployed to get.
The blue line shows total private investment as a share of GDP. This investment remains very low by recent standards, and without investment new jobs won’t be created.
Bottom line, solving the unemployment problem isn’t about ending some made-up dependency problem. It’s about boosting investment and creating more job openings.
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