Friday, December 14, 2012

Update on the 9.1

The following blog post from September 2011 made me rather unpopular with a number of readers. I did receive a few nods as well, but it's always the ones I rattle who stick in my memory---and I acknowledge, it does smack of insensitivity. The attached video (I pulled from this article on cafehayek) inspired me to risk this one again, and offer you an update (in red) on these real-life stories.

Of course this minute sampling offers no credible reflection of the whole, however, considering the employment opportunities discussed in the video, you have to wonder...

The 9.1 (September 2011)

This Thursday President Obama will address the nation and tell of how the government will tackle our whopping 9.1% unemployment rate. From what I gather, there may be yet another plan to extend benefits in the works.

Rudimentary economic theory teaches that you get what you pay for. In essence, if you pay for unemployment, you get unemployment. Not to suggest that we shouldn’t assist our fellow citizens in need, but I can’t help but wonder (per my observation below) if too large a percentage of recipients aren’t abusing the system.

The problem being, as Milton Friedman pointed out;
When you spend someone else’s money on someone else (which would be every government program) you have no incentive to economize and no incentive for quality…

The 9.1

I personally know of exactly five individuals who have received unemployment benefits over the past year. Here are their true stories:

1. A woman who’s now permanently housewifing, who refers to her unemployment checks as her "Macy’s money"… Well, the benefits ran out, and she decided that Macy's stuff was worth working for. She found a job within days of her last check...

2. The Giants fan my son met at the gym who says “at 2,500/month (had to be his salary while working) it’s not worth going back to work.” He brags of watching his premium MLB channels all day long... All I know is that Nick says he hasn't seen this guy at the gym in months...

3. A young man I play basketball with who works 9 months for the state and takes 3 months unemployment benefit every single year, and “absolutely loves it”… He hasn't been showing up at the court lately. I'm guessing I'll see him when those 3 months roll back around...

4. A guy who claims he could get a job in a heartbeat, who, when he worked, outspokenly resented those who exploited the system, yet now confesses to be loving life as one of the 9.1, with no intent whatsoever to get a job till his benefits expire (if ever)… He was right, employable he was. When his unemployment checks stopped coming he immediately went back to work...

5. A gentleman who accepted benefits just long enough to get his real estate license, who now works full time… He's doing great!

So then, empirical evidence (my study) suggests 80% of the 9.1 are abusing the system. And that unemployment benefits clearly inspire unemployment.

I suspect (hope) this isn’t the norm---that surely the majority are using their unemployment benefits to tide them over as they diligently look for work---or, like #5, learn a new trade. I just can’t prove it.

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  1. We completely agree with your observations. We know several who are abusing the system. Know one person who will go on unemployment soon, and plans to stay there until he's old enough for SSI. Perfectly capable of working, but not planning on it. Don't listen to the critics, they won't get it until it hits their pockets.

  2. Yep, when the government subsidizes unemployed workers the country has more unemployed workers. Funny how that works.