Does handing out unemployment benefits to out-of-work Americans discourage them from finding a job?
In an op-ed article in Monday’s Wall Street Journal, Harvard economist Robert Barro argues that the current unemployment rate would be 6.8 percent rather than 9.5 percent if the Obama administration hadn’t extended unemployment-insurance eligibility to up to 99 weeks from the standard 26 weeks.
Barro reckons the program “subsidizes unemployment, causing insufficient job-search, job-acceptance and levels of employment.” In other words, the extension of jobless benefits actually creates unemployment by discouraging people from going out and finding a new job.
It's an old argument, and a divisive one, as msnbc.com’s John Schoen pointed out in a thoughtful piece on the topic recently.
New York Times columnist Paul Krugman has argued that in the current economic environment there are simply no jobs for unemployed workers to find, with or without benefits.
Mychal Massie, a columnist for WorldNetDaily.com, and Mark Sawyer, a professor of political science at UCLA, debated the issue on CNBC today: