New Unemployment Benefits Report Sparks Controversy

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According to a global bank’s study, the added unemployment benefits that the U.S. Congress has approved are responsible for 1.5 percent of the high unemployment rate. A lobbyist for the National Employment Law Project has, however, called the report’s conclusions “hooey.”

Congressional members from both sides of the aisle voted for the increased benefits, since the unemployed must immediately spend all of that money on necessities, which in turn stimulates the economy.

The report (and opponents of added unemployment benefits) claim that when unemployed workers receive extended benefits, they cause the unemployment rate to remain high for a longer period of time. The thinking is that the unemployed will be more selective about the jobs they take because they know they have additional benefits. The report also concludes that this is why the current economy is growing, but not employment: the unemployed spend the benefits, but don’t take jobs they could.

The lobbyist agrees that the unemployed may be unemployed longer, but that situation only applies when unemployment is four to five percent. With the current double-digit unemployment rate, those seeking work need more time (and benefits) because there are many more unemployed competing for the few open jobs.

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