I’ve been on the Gerri Willis show, the Willis Report on FoxBusiness every other week for the past couple of months… it’s really fun and exciting…She always had some very interesting topics…
Yesterday the topic was the recent survey done by Harris poll of 1500 unemployed adult Americans… the major headline was that 47% of these people say that they have completely given up looking for a job…Gerri’s questions were… what’s your reaction to this… why are people giving up so easily and,… should the American taxpayers be paying for this group …???
There are more than 4 million people in the United States in this boat… people believe that there are actually no jobs out there… they believe the unemployment compensation is helping them… and overall they blame the economy…
According to the latest data, it takes the average person 17 weeks… about four months to either find a job or stop looking for one… the Council of Economic Advisers has found that a person being unemployed for five weeks or less has a 31% chance of getting a job… once they’ve been unemployed between 27 and 52 weeks, those odds drop to 12%… and what happens once your unemployed for more than a year… your odds drop to 9%… 34% of these people are men between the ages of 25 to 54 and 29% are women of the same age… 18% are young workers under 25… 15% are workers on the cost of the traditional retirement age between 55 and 64 years old… and the remaining 4% are people who are 65 years or older but would still like to work
Over the next two or three weeks I’m going to share with you the reasons I see… from in the trenches… of why people have such a hard time finding a job and why they don’t go to work
The First Reason is that looking for a job as well as losing your job is the fourth most emotional thing that people do…next to death of a spouse, death of a child, death of a parent, coupled with divorce, the fourth most emotional thing that people do is look for a job… they are just plain scared…
For most people this fear leads to massive action and they get up off their duff and really try hard to look for a job… and, if they do it within the first five weeks of being laid off they have a 31% chance of doing that… however, because of fear, lots of people decide to take a little time off, accept severance and do nothing for a while, take a vacation, go back to school… they do anything except what they ought to do which is look for a job
The second thing they do is to apply for entitlements offered by the government…. this is a well-intentioned social policy but it has done nothing but enabled a whole bunch of people to not only become dependent upon the government but become disincented to finding a job…
Malcolm Gladwell, in his book, David and Goliath speaks about the inverted U theory regarding social policies that start out as a “good thing” but wind up making things worse… unemployment insurance, disability insurance, food stamps and many other programs instituted to “help” unemployed people actually provide them an incentive to not find a job.
People can often collect more money from unemployment insurance, food stamps, disability insurance and other government programs than they can by finding a job… economists at the national Bureau of economic research reported that unemployment was worse in places with generous benefits… the new Affordable Care Act has the same kind of perverse to twist affecting the labor market….the CBO states that means tested subsidies for Obama care phase out as income rises and that some people would choose to stay poorer and either accept lesser jobs than they might be capable of or get out of the workforce completely… this incentive to become unemployed or cut back on time worked in exchange for healthcare subsidies will cost 2.3 million jobs by 2021… the intent to “help” is a deterrent to work and encourages those on this subsidy to “stay poor”
Government programs designed to help the unemployed has a tendency to keep them employed… more next week
