Proposed Tier 5 Unemployment Extension Will Discourage Job Hunting – Harvard Economist

Jeffrey Miron, Director of Undergraduate Studies in the Department of Economics at Harvard University recently opined in an interview with FoxNews that the proposed Tier 5 unemployment extension benefits would probably discourage the unemployed from accepting less desirable or less paying jobs, and instead opt to remain on unemployment benefits “for extra weeks or months” and “for a little bit longer.”

Under current legislation, people laid off in the US are entitled to 99 weeks worth of federal unemployment assistance, and people who still failed to find a job after 99 weeks (colloquially referred to as “99ers”) no longer qualify for federal unemployment assistance.

99ers have long campaigned for an extension to the 99-week period, and recently Senator Debbie Stabenow (D-MI) filed a Tier 5 unemployment extension 2010 bill, which aims to provide 99ers with a further 20 weeks of unemployment benefits.

Miron voiced his concerns about the possible consequences of the proposed bill during his interview with FoxNews, and also disagreed that the unemployment extension will stimulate the economy by giving cash to those who are unemployed, enabling them to spend the money back into the economy.

“That money came from the taxpayers, so others in the economy have less money to spend now or in the future,” he argued. Miron also suggested that compassion for the unemployed, rather than the claim that increased benefits would effectively provide the economy with much needed stimulus, would provide a better footing to try and push the bill through. “At what point do we say we have to put aside compassion and worry about efficiency and worry about giving people stronger incentive to go back to work, even if it’s not the job they’d most prefer?” asked Miron.

Senator Stabenow’s unemployment extension bill is due to be discussed again by the Senate once it resumes after the current 1-month recess.