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Why The Government Should Continue Unemployment Benefits in the United States

Concerns for American individualism and character in the 21st century have early origins that date even prior to today’s era, among them the concept of work ethic and the American Dream. According to an academic journal published by the International Social Science Review, this could be explained by dramatic transitions in the workplace, which while seemingly improving in higher quality jobs and more educated workers, was also regressing with a lack of employer support for work ethic. The issue at hand was that intrinsic motivation and interest to work hard therefore no longer existed, as Americans increasingly pursued money and other extrinsic factors. Despite the journal being published in 1989 and in a vastly different context, these same concerns are still controversial as people debate over the current state of the American work ethic today.

One way, the issue manifests itself is through unemployment insurance (UI) benefits. The program, first initiated in 1932 during the Great Depression, intended to alleviate economic difficulties for those formerly employed but now without jobs and without fault. Currently, requirements for applications vary across states and additional aid programs targeted towards specific groups such as students or the disabled are in place. The argument over UI benefits is grounded in the government’s role of providing this aid and its effectiveness in waning unemployment rates and helping people locate jobs. The safety net of unemployment benefits has cushioned long-term job seekers since the mid-twentieth century, maintained as a crucial means of providing income support to those who are unable to secure employment. The economic progress made since then, especially in recent years with recovery from the Great Recession, has been largely emphasized by the Obama administration and now in 2017 faced by Trump’s government to continue.

Though the unemployment rate today is considerably low at 4.9%, in comparison to the near 10% reached less than a decade ago during the Great Recession, issues in the job market and in the inherent work ethic of Americans still prevail. With the new government comes new decisions that need to be made regarding the extent and proportion of distribution to which unemployment benefits should be maintained. However, given the political implications, individual support, overall national economic security, as well as the discrediting of common misconceptions regarding them, unemployment benefits should definitely be continued and further improved by the United States government to suit the needs of the unemployed and changes in the job market.

Political Lens: Unemployment Benefits and Government

In 1971 then-president Richard Nixon presented his Labor Day Address to the nation, through which he emphasized the importance of hard work to the honor of the family and the progress of the nation, as well as its continuing strong presence at the time. This contrasts with Trump’s speech announcing him running for president, as he claims that the “American Dream is dead” and competition from outsourcing and machinery has led to a decline in American work ethic.

Today, most Republicans have challenged unemployment benefits as disincentives to American virtues of hard work and as difficulties to creating quality jobs. The majority of Democrats, on the other hand, have favored the program and sought to extend it during periods of higher unemployment, as seen most conspicuously under the Obama administration. This political dispute has often underscored the question of whether the safety of unemployment benefits erodes Americans’ values of work, which has now become ever relevant today with the overwhelming competition from outsourcing and machinery advancements that pressure the job market. These concerns have been reflected in both political history and the present, from the reputed French politician’s political analysis of “Democracy in America” noting America’s wealth due to its civic virtues, to Nixon’s labor address stressing the importance of diligent work for the country’s overall economic growth, and to Trump himself claiming that “the American Dream is dead” in his speech a few years ago to run for president. While unemployment insurance itself and alone cannot be representative of the lasting or lacking work ethic within the United States, it does express the willingness to seek and the perceived accessibility of jobs that American workers have.

Social Lens: Unemployment Benefits to the Individual

Unemployment benefits provide individual support for the long-term unemployed in the face of a challenging, competitive job market force. This can be seen in two ways: through income that sustains households, as well as through health effects by alleviating stress and risk to disease that would have otherwise been caused by the removal or lack of unemployment benefits. Firstly, according to the Council of Economic Advisors and the Department of Labor, both reputable organizations closely linked to the White House government, as of 2014 over 69 million adults had received and been helped by federal aid from its signing by President Bush in 2008, with 2.5 million lifted from poverty. Today with a disproportionate ratio of still 7.3 million unemployed and 5.2 million job openings, the need for unemployment benefits to fulfill basic needs during job searches remains large in the economy.

Furthermore, health risks arise simply from loss of employment, and can be further exacerbated by the removal of unemployment benefits. According to the 2014 academic journal study published by the U.S. National Institutes of Health, not only had previous studies indicated that not only does unemployment increase risk to disease, but also that unemployment benefits mitigate risks of cardiovascular disease. The active effect of unemployment benefits on maintaining a healthy well being for those without jobs indicates the need to sustain the program.

Economic Lens: Unemployment Benefits and Economic Security

Continued unemployment benefits would not only aid individuals, but also ensure overall economic stability in the United States. Being cost-effective and conducive to lesser long-term unemployment, UI benefits are an effective system for the government to maintain for the unemployed. This can be seen as the amount of those unemployed long-term have decreased in the past decade with government expenses on income distribution having also declined. At the end of 2013, the 1.3 million long-term unemployed was a significant drop from the 2.1 million in 2012, and government expenditures had similarly dropped from dedicating 3.3 billion dollars a month to dedicating 2.1 billion. This downward turn in unemployment rate and costs suggests that people still in the labor force are successfully able to secure new jobs and contribute to the national economy, signifying unemployment benefits are not futile in providing costs with no foreseeably payback. Thus, in the government’s perspective it would be efficient to invest in unemployment benefits as the unemployment rate decreases and input from American workers offsets program costs induced by the state, federal government and business companies. Furthermore, with reservation wages that prepare for disruptions to regular income and different taxing policies for companies with varying degrees of workforce turnover and higher payrolls, the steady flow of economy is set to remain stable even in times or areas of higher unemployment.

However, while unemployment benefits may retain the willingness of the unemployed to remain in the labor force and seek a job, it is countered by economists that the willingness of employers is challenged by the minimum safety income that unemployment benefits provide. Business companies are taxed to partly provide unemployment benefits, based on their payroll to workers and workforce turnover. In order to reemploy long-term unemployed workers, they must meet a competitive wage demand that entices an unemployed person to leave their job. Thus despite understanding the benefits brought to the unemployed, employers are still subject to costs they may consider not worth the extra effort. By continuing and perhaps increasing unemployment benefits, employers may be more reluctant to cooperate and employ those who have been without jobs for the long-term.

Credits: Klavdija Dajčman via Slovenske Notice

Unemployment benefits are not disincentives to job seeking Americans, nor job creation in the labor market. Various studies made by prominent economists have found increased unemployment rates attributable to the benefits distributed during that time, such as the 2010-2013 Federal Reserve System studies by Nakajima, Ghayad and others. Opponents of unemployment benefits then conclude that unemployment benefits perpetuate higher unemployment rates and fail to find jobs for the long-term job seekers. However, they fail to recognize that unemployment benefits themselves are not intended to increase employment but to mitigate the struggle of those unemployed and currently looking. Other programs have been instituted in order to lower unemployment while benefits support the basic needs of those without jobs: federal student aid, self-employment assistance, extended benefits when exhausted regular income, and other programs specialized to help ease the job search.

So what should the government do?

Ultimately, the United States government today should continue unemployment benefits for the long-term unemployed in the United States, as the insurance provides safety, support and security to both the American individual and nation as a whole. “A World Without Work” by Derek Thompson discusses the likelihood of a post- work society, with the government providing incentives for or alternatives to Americans working. As the “visible hand,” the government actively serves to maintain peace and order within American society by providing cultural centers, proposing shared jobs, offering financial incentive, etc to the people. Continued unemployment benefits may be one step closer to the overseeing government role that Thompson suggests will be the way people are able to contentedly transition into a world without work. However, the possibility of turning to a post-work society is so far mostly unlikely – the current government administration under Trump has firmly expressed belief in “bringing back the American Dream”. Although the current administration is Republican, the issue itself does not warrant a partisan split and therefore necessary changes can be made to the unemployment insurance program without removing it or reducing it from the original Democratic system. Trump has already been faced with prospects of new reforms, having recently been requested to lift Obama’s restriction on drug testing for those seeking UI benefits. 

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Sally Jin
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Sally Jin is a 17 year old pun/meme enthusiast and avid daydreamer based in Shanghai, China. She does rugby and basketball, and loves playing with her dogs, making and appreciating all forms of art, and exploring the city with friends during her free time.

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