Extended Unemployment Benefits A Bad Thing?by Tim Manni
New York Governor David Paterson signed legislation yesterday that, effective immediately, extends the state’s unemployment benefits by 13 weeks. The over 500,000 New Yorkers on unemployment may now collect benefits for up to 18 months.
The $645 million extension, provided by the president’s stimulus package, aided 56,000 residents whose benefits would have ended this week:
“These benefits allow unemployed New Yorkers to pay for their homes and buy food for their families while also searching for jobs,” Paterson said.
Foregoing the obvious benefits, was the governor’s extension a bad decision? According to the TimesUnion.com, New York could be facing $5.5 billion in budget cuts next year. Facing similar fears, some states like Michigan are fighting to turn down the stimulus money that’s designed to bolster unemployment benefits:
The money is meant to boost Michigan’s unemployment system. Accepting the funds would require changes to state law that would cost Michigan employers in two short years more than the state would gain in the one-time payment. The permanent changes to state laws would hike costs for businesses — small businesses in particular — and act as a further disincentive for companies to locate in Michigan.
Besides the negative monetary impact, can the extension of unemployment benefits — especially for up to a year and a half — begin to have negative effects on those receiving them?
With benefits that last this long, could unemployment begin to resemble welfare? Does there come a point when those on unemployment begin to think they are better off than when they were working?
Here is a mix of reactions from Consumerist readers. Which side do you agree with?:
“…this kind of undisciplined spending will cause New York State the same kinds of financial heartache California finds itself in.”
“This is doing nothing but allowing people to wait another 13 weeks before deciding that they MIGHT NOT BE management material…”
“I guess it’s nice to know I can keep getting benefits. But I certainly hope I don’t have to.”
“Such extensions are a godsend.”
“Unemployment benefits are one of those things that sounds nice and seems to make sense, but instead people just wait longer to look for work.”
“I have a friend who was laid off over a year ago and he hasn’t been able to find work. Some people actually need the help.”
In light of this, are extended unemployment benefits a bad thing? Why or why not?
(hat tip: The Consumerist, Doug)