The Kroog Versus The Dickensians

Paul Krugman reminds us that North Carolina dropping itself out of federal employment benefits because cuts to unemployment benefits were too steep to meet federal rules is just the latest example of the GOP theory that flogging the unemployed will magically create jobs.

So what’s going on here? Is it just cruelty? Well, the G.O.P., which believes that 47 percent of Americans are “takers” mooching off the job creators, which in many states is denying health care to the poor simply to spite President Obama, isn’t exactly overflowing with compassion. But the war on the unemployed isn’t motivated solely by cruelty; rather, it’s a case of meanspiritedness converging with bad economic analysis. 

In general, modern conservatives believe that our national character is being sapped by social programs that, in the memorable words of Paul Ryan, the chairman of the House Budget Committee, “turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.” More specifically, they believe that unemployment insurance encourages jobless workers to stay unemployed, rather than taking available jobs. 

Is there anything to this belief? The average unemployment benefit in North Carolina is $299 a week, pretax; some hammock. So anyone who imagines that unemployed workers are deliberately choosing to live a life of leisure has no idea what the experience of unemployment, and especially long-term unemployment, is really like. Still, there is some evidence that unemployment benefits make workers a bit more choosy in their job search. When the economy is booming, this extra choosiness may raise the “non-accelerating-inflation” unemployment rate — the unemployment rate at which inflation starts to rise, inducing the Federal Reserve to raise interest rates and choke off economic expansion. 

All of this is, however, irrelevant to our current situation, in which inflation is not a concern and the Fed’s problem is that it can’t get interest rates low enough. While cutting unemployment benefits will make the unemployed even more desperate, it will do nothing to create more jobs — which means that even if some of those currently unemployed do manage to find work, they will do so only by taking jobs away from those currently employed. 

Ding ding ding!   Without actual job creation to make additional jobs for the unemployed to fill, it becomes a zero-sum game.  Republicans are well aware of this, for example, North Carolina's new unemployment laws means that until you are employed making at least the same income you were making when you initially received benefits before you are eligible again.  If you find a lower-paying job and then get laid off (even years later) you're screwed.

Republicans are basically making being poor such an impossible burden that people leave the state and become somebody else's problem.  It's a race to the bottom in the Austerity 500 and nobody wins.