Over the past few years, I have written extensively about my belief that extending the unemployment payments was a disincentive to work. People who took advantage of the multiple extensions became the subject of pieces appearing in newspaper and magazines and television news.
(Graphic courtesy Urban.org)
“Too many Americans took advantage of a system that was meant to be a temporary cushion, and stopped looking for work as long as the free ride continued,” I wrote in my Nov. 12, 2014 post, “Economy big loser with big government.” And, as the Wall Street Journal has pointed out, the generous unemployment extensions discouraged businesses from creating jobs.
As predicted, when the unemployment extensions stopped, many returned to the job force. As the unemployment percentage went down, the president was there to chronicle the fact that it was his economic policies that made the difference. Not true.
“The cut in unemployment benefit duration led to a two percent increase in aggregate employment, accounting for nearly all of the remarkable employment growth in the U.S. in 2014,” wrote economists Marcus Hagedorn, Iouril Manovskii and Kurt Mitman in an abstract of a working paper for the National Bureau of Economic Research.*
The authors reported that 1.8 million jobs, slightly more than three of five net positions, were filled as a result of the halt in unemployment benefits. The also indicated that the cut also pulled a million workers who had dropped out of the workforce back into the workplace.
*The National Bureau of Economic Research is a private, not-profit organization.
