Congress extends unemployment benefits

Betsey Stevenson Feb 15, 2012

Kai Ryssdal: There’s a deal a’brewin’ in Congress to extend the payroll tax cuts through the end of the year and provide continued jobless benefits for the long-term unemployed. It’s a rare instance of economic bipartisanship in Washington.

Commentator Betsey Stevenson says that’s great — for starters.

Betsey Stevenson: The U.S. used to be a dynamic labor market where people got back on their feet quickly after losing a job. Most people who lost their jobs found work within eight weeks prior to the recession.

In this context our unemployment insurance system made sense. We support folks who draw the unlucky straw and are laid off. But because in the past most who searched could find work quickly, we only provide support for up to six months. And our unemployment insurance system isn’t really focused on helping people back into jobs.

But this system doesn’t work for us today. Today, a majority of the unemployed haven’t found work despite having searched for more than 21 weeks. Millions remain unemployed when their usual 26 weeks of unemployment benefits expire.

But the ongoing debate in Congress over extending the number of weeks of benefits has come at a serious cost. It has crowded out an important discussion about how best to reform our unemployment insurance system.

For example, we know that giving unemployed workers job search assistance speeds the time to finding a job. That reduces how much time we pay them benefits. In fact, randomized trials show that this assistance saves the taxpayer more money than it costs. And there are surely other reforms that could help get people back to work, and maybe even save us money.

But the debate is bogged down in politicians fighting over the basics — whether to give the unemployed a lifeline, rather than over how best to do it. We need to discuss and fund ideas that will make our unemployment insurance system more successful in helping the unemployed find jobs. After all, what we all really want is for everyone who wants to work to be able to work.

Ryssdal: Betsey Stevenson used to be the former chief economist at the Department of Labor. In real life she’s a professor of business and public policy at the Wharton School at the University of Pennsylvania. Let us know what you think — write to us.

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