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Continue unemployment benefits?

One of the major issues with Macroeconomics is unemployment, and it is a very sensitive issue in the States.


As you can see above, this unemployment rate table by Bureau of Labor Statistics shows the steady decline of unemployment rate.

Although the rate is declining, there are still many Americans without jobs. One of the issues that came up when the Congress reconvened on January 6 was unemployment and whether they will restore the emergency federal unemployment program (benefits) which expired on December 28. They have not come up with any agreements yet since this issue is also a political issue that both Republicans and Democrats do not want to discuss and negotiate. It will also take a while to come up with final decisions due to other important issues such as short-term stopgap spending bill and the fund for the federal government.

This benefits program has both pros and cons; it can certainly help people in many ways but it can discourage people to look and apply for jobs. Some even argue that if there is no aid from the government, then people might be motivated to find jobs or at least part time jobs for living.

Since this is also a political issue, It is really hard to determine which side is more important. However, Congress must come up with a decision. About 1.3~1.4 million people who lost the aid last month are still waiting.





  1. Under what circumstances does a boost in unemployment benefits cause unemployment to rise? – when would stepping out of line at an employment agency matter?

    It is NOT hard to “determine which side is more important” – the empirical story is very clear. Approach this issue as an economist!!!

    • gjeong gjeong

      I definitely agree with you on the idea that it is not that hard to determine with side is more important.
      What I wanted to point out was that there are people who do not believe in the data and just argue against it, which is why there is still no agreements or negotiations.
      Since this has become a political issue, It will take some amount of time for the Congress to come up with the solution.

      • Yes, and there are people who believe the earth is flat. That someone on the internet claims something doesn’t mean such claims merit consideration. If you want to repeat such absurdities, be sure to label them as absurd.

        More generally, it is not true that there are two or more sides to every issue.

  2. kuveke kuveke

    “This report argues that allowing EUC to expire would be harmful to millions of workers and their families, counterproductive to the economic recovery, and unprecedented in the context of previous extensions to earlier unemployment insurance programs.” – This quote is found in the executive summary of a report by The Council of Economic Advisors and the Department of Labor on how allowing EUC to expire will only hurt economic recovery. The points of the report are straight forward and obvious. One of the major points is that by taking away critical support of the incomes of people looking for work the macroeconomy will be hurt reducing demand and costing up to a quarter million jobs. Moreover studies undertaken to examine if EUC disincentivizes job seekers to find work show that the disincentives are small. A more effective way to end EUC and a possible compromise is a phasing out as has been proposed.

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