The Federal and State governments created unemployment insurance programs as the nation lingered along in the Great Depression in the 1930's. The enormous job losses in the Great Depression were devastating to the workers who lost their jobs and their families, but also to the effort to restart the economy. When a huge part of your workforce is unemployed and completely without income, your consumer base is decimated. Unemployment insurance would make job loss less devastating for workers and also allow unemployed workers to continue to contribute something to the economy as consumers.
Now, 75 or so years later Democrats and Republicans in Congress still fight over the unemployment insurance program, mostly over extending benefits to the long term unemployed. Democrats tend to assume they are all innocent victims of the economy, Republicans have a suspicion many are shirkers who like getting money for free.
Both are extreme positions not reflective of the total reality. For various reasons some people who lose their job may work really hard at finding another position but still go long periods of time without getting reemployed through no fault of their own. Their job may have disappeared under a wave of new technology so they need retraining. The job market may be really dead where they live and they can't afford to move because they are tied to a house they cannot sell. They may be physically limited in the types of jobs they can perform.
Other people either because they are feeling a little depressed and helpless, or they are feeling angry and entitled, or they are just too laid back for their own good, may ride unemployment for long periods of time making little or no effort to seek new work.
It seems to me there is a middle ground between the Democrat view that everyone on unemployment is a victim working hard to get another job, and the Republican view that they must all be slackers if they haven't got a job yet. Here is what I suggest.
People who go on unemployment should be entitled to benefits in much the same way as the current system for a period of time. At a certain point, however, they should be required to do a certain number of hours a week of volunteer work for Government or non-profit organizations to continue to receive unemployment benefits (and continue to be required to document their search for work). The longer they are on unemployment, the more hours per week they will be required to work to retain the benefits. The organizations employing them must be required to keep records on their job performance and some form of publicly available evaluation of the individuals performance, accessible to potential private employers.
I have known a few people in my life in jobs that allowed them to use regular periods of unemployment as periods of paid vacation. I suspect they take far more out of the system than they ever contribute in unemployment insurance taxes. So we should also adjust the law to take into account people who are repeatedly on unemployment over their working career by making the initial period where no work is required become shorter each time they go back on unemployment.
It suits the political needs of Congress to deal in extremes, they have no motivation to fine tune the unemployment insurance system. The system won't be improved unless we the voters demand it.
Friday, June 24, 2011
Thursday, June 23, 2011
A startling new look at the impact of immigrant workers
A new book about migration stands many of the canards of the current immigration debate on their head. It comprehensively makes the point immigration is unpopular in rich countries because people overestimate the costs of immigration and underestimate the benefits.
Most startling to me is the authors computation that if rich countries allowed a 3% increase in migration to expand their work force the world as a whole would be richer by $356 billion dollars. Completely opening borders so labor could flow freely from poor countries to rich countries would add $39 Trillion to the world economy over 25 years. That is more than 500 times what the rich world currently spends on foreign aid in a year.
This multiplying effect is a result of the fact wages in the rich world are a fortune by poor country standards, and since migratory workers tend to send large chunks of their earnings home to families, those remittances boost the poor country economy increasing their ability to become consumers of rich world products. (Unlike foreign aide, those remittances go to the people of the country instead of getting poured into the pockets of the government elite, or wasted in huge nonsense government projects)
Regarding highly skilled workers migrating to rich countries the authors note while "brain drain" hurts poor countries to some extent, it also motivates people to increase skills, and then some stay at home. Highly skilled immigrants also may start businesses in destination countries that increase the rich country employment base, so in the end brain drain can be a boost to local economies at both ends of the migration.
The authors review studies about how much immigrants displace native low skill workers and find the studies show the fear greatly exceeds the reality, the effect is relatively negligible (not to say the effect is not very real for some native workers). Migrant workers in fact sometimes create opportunities for native workers by starting businesses, or freeing up one spouse so both spouses can work.
One point in the book that particularly caught my attention was the authors point that migrant workers usually prefer to come when their services are wanted and go home when they are not.
That point brought to my mind the Bracero program we used to have in California where large numbers of people were allowed to come to the country each year to work legally in low-skilled jobs. They returned home when they were not working. As I recall that program was killed in a burst of anti-immigrant fervor some years ago. I wonder if a large part of our immigration problem now is because eliminating that option to come, work legally, then go home and come back again as work becomes available means people are more likely to try to smuggle in their family and put down roots so they don't have to deal with the enormous risks and dangers of border crossings.
The book is "Exceptional People: How Migration Shaped our World and Will Define Our Future" reviewed by the Economist (May 28, 2011, p.87)
Most startling to me is the authors computation that if rich countries allowed a 3% increase in migration to expand their work force the world as a whole would be richer by $356 billion dollars. Completely opening borders so labor could flow freely from poor countries to rich countries would add $39 Trillion to the world economy over 25 years. That is more than 500 times what the rich world currently spends on foreign aid in a year.
This multiplying effect is a result of the fact wages in the rich world are a fortune by poor country standards, and since migratory workers tend to send large chunks of their earnings home to families, those remittances boost the poor country economy increasing their ability to become consumers of rich world products. (Unlike foreign aide, those remittances go to the people of the country instead of getting poured into the pockets of the government elite, or wasted in huge nonsense government projects)
Regarding highly skilled workers migrating to rich countries the authors note while "brain drain" hurts poor countries to some extent, it also motivates people to increase skills, and then some stay at home. Highly skilled immigrants also may start businesses in destination countries that increase the rich country employment base, so in the end brain drain can be a boost to local economies at both ends of the migration.
The authors review studies about how much immigrants displace native low skill workers and find the studies show the fear greatly exceeds the reality, the effect is relatively negligible (not to say the effect is not very real for some native workers). Migrant workers in fact sometimes create opportunities for native workers by starting businesses, or freeing up one spouse so both spouses can work.
One point in the book that particularly caught my attention was the authors point that migrant workers usually prefer to come when their services are wanted and go home when they are not.
That point brought to my mind the Bracero program we used to have in California where large numbers of people were allowed to come to the country each year to work legally in low-skilled jobs. They returned home when they were not working. As I recall that program was killed in a burst of anti-immigrant fervor some years ago. I wonder if a large part of our immigration problem now is because eliminating that option to come, work legally, then go home and come back again as work becomes available means people are more likely to try to smuggle in their family and put down roots so they don't have to deal with the enormous risks and dangers of border crossings.
The book is "Exceptional People: How Migration Shaped our World and Will Define Our Future" reviewed by the Economist (May 28, 2011, p.87)
Monday, June 20, 2011
I want to sign a petition to demand better Presidential debates
I wish I had the tech skills to set one up, maybe linked to facebook.
The existing Presidential debate format is like a pillow fight. We might as well tune in to watch alternating candidate TV commercials. The candidates handlers insure that the format shields their candidates from questions that might actually reveal the vacuity of their rhetoric. If they do get a potentially difficult question they just talk about something else and the media moderator's let them get away with it.
The process produces no information beyond the carefully scripted sound bites from each campaign. The partisans at both ends of the political spectrum get reassured, the voters in the middle get nothing - we end up judging candidates on how they look, or act, not the cogency of their ideas. Nixon was judged to have "lost" the 1960 debate with Kennedy because he had a bad make-up job. George Bush Jr. was judged to have won in 2000 because Al Gore was stiff and boring, and Mr Bush exceeded (silly) media expectations by not being completely incompetent at stringing together sentences.
We should set up ground rules about questions (no trick questions, no questions assuming unproven facts) and then let each candidate's campaign question the other candidate(s), with the right to follow up questions where the answer is evasive. Have an independent panel of fact checkers to keep them honest. Then we might actually learn something useful as candidates will have to answers about unpalatable truths instead of just telling us what they think we want to hear.
Candidates won't want to use this format, but if voters won't vote for a candidate who doesn't participate, they'll have to do it.
If there is some tech person out there who knows how to set up a petition and start it circulating I would sign it in an instant and send it to everyone I know.
The existing Presidential debate format is like a pillow fight. We might as well tune in to watch alternating candidate TV commercials. The candidates handlers insure that the format shields their candidates from questions that might actually reveal the vacuity of their rhetoric. If they do get a potentially difficult question they just talk about something else and the media moderator's let them get away with it.
The process produces no information beyond the carefully scripted sound bites from each campaign. The partisans at both ends of the political spectrum get reassured, the voters in the middle get nothing - we end up judging candidates on how they look, or act, not the cogency of their ideas. Nixon was judged to have "lost" the 1960 debate with Kennedy because he had a bad make-up job. George Bush Jr. was judged to have won in 2000 because Al Gore was stiff and boring, and Mr Bush exceeded (silly) media expectations by not being completely incompetent at stringing together sentences.
We should set up ground rules about questions (no trick questions, no questions assuming unproven facts) and then let each candidate's campaign question the other candidate(s), with the right to follow up questions where the answer is evasive. Have an independent panel of fact checkers to keep them honest. Then we might actually learn something useful as candidates will have to answers about unpalatable truths instead of just telling us what they think we want to hear.
Candidates won't want to use this format, but if voters won't vote for a candidate who doesn't participate, they'll have to do it.
If there is some tech person out there who knows how to set up a petition and start it circulating I would sign it in an instant and send it to everyone I know.
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