If you’ve been following the news at all lately, you have probably heard of the HR 4213 bill, which has been on the Congressional floor for some time now and would extend unemployment benefits to people who have been out of work for six months or more. If the bill passed, it would extend unemployment benefits to at least two million individuals and last until November of 2010. The reason the bill has not been passed so far is because Republicans have been filibustering it and not allowing it to come to a vote.

The reason used by Republicans for the bill filibuster is that they are afraid that the $34 million needed to enact the bill would worsen the budget deficit. However, Republicans did not voice such a fear when the bank bailout was occurring, or even when bailouts were being considered for companies such as GM. Also, the monetary amounts spent to bail out big banks ($700 billion in total spent on the Troubled Asset Relief Program, or TARP) were much larger in comparison to the amount being proposed for the unemployment extension. So, what gives?

While no one will say it openly, there is an unspoken sentiment that is shared by several members of Congress on both sides that unemployment benefits encourage people to become lazy bums. In coded sentences, some senators and House representatives have stated that they feel that unemployment benefits would actually encourage folks to NOT look for work.

For example, Jon Kyl, the Republican Senator from Arizona, has stated that unemployment insurance payouts create a "disincentive…to seek new work." Then there is Judd Gregg, the Republican Senator from New  Hampshire. Mr Gregg stated that extending unemployment benefits actually delays economic recovery because it "encourages people to, rather than go out and look for work, to stay on unemployment." And Jason Altmire, the Democrat Representative from Pennsylvania, noted that business owners in his district were having trouble with hiring because potential employees preferred to stay on unemployment insurance instead of go to work.

To be fair, unemployment benefits have already been extended several times. Some states have doled out an unheard of 99 weeks’ worth of benefits. And it just may be that some of the unemployed are hesitating to look for work when instant money just keeps appearing in their mailboxes. However, unemployment benefits have never made anyone rich. Unemployment benefits have merely allowed individuals to survive and pay their bills until a good job came along.

If people who are on the unemployment roster are not looking for or returning to work, the real reason for their hesitation may be something other than laziness. Rather, it could be that no one in his or her right mind would want to take on a $14/hour job when, prior to being laid-off or downsized, that person made $73/hour at the same job. And even if this person’s unemployment benefits are not exactly paying out a full $73/hour, such benefits are at least paying more than the proposed $14/hour. I am referring, of course, to the new wage scales set for the United Auto Workers (UAW) employees at GM. As opposed to those long-forgotten days when UAW people would earn up to $73/hour in wages and benefits, the union recently renegotiated their contracts with GM and set new worker wages at $14/hour. While this is all fine and well for new hires, would laid-off UAW workers really return to a fraction of their salary at this point in time, when even their unemployment benefits are bigger? I know I wouldn’t.

Regardless of whether or not you think UAW members were overpaid, the matter of unemployed individuals having their unemployment benefits cut off is a very real one. Some of these individuals are certainly looking for work- and just not finding any. Alternately, they may be very willing to go to work- but if the hourly wage is $8/hour, that may not justify paying for items such as gas, daycare, or adult care in order to go to work. People still need a living wage- whether it come from employment compensation, or from unemployment benefits.

References:

Where’d the bailout money go? Banks aren’t saying

Unemployment Extension Standoff, Day 36: Blaming The Unemployed

GM, UAW Agree to Cut New-Worker Pay Scale, People Say (Update3)