Unemployment Benefits: When Does Help Begin to Hurt?
Regarding Rep. Jim McDermott's letter of May 28 on the virtue of extending benefits to the unemployed: The Journal has noted that increasing the period over which unemployment benefits may be paid tends to reduce incentives for the recipients to seek jobs.</br></br>Any increase in such benefits will induce the job seeker to narrow his list of job targets. The reason for this assertion is that, after ranking possible job opportunities in order of preferences, and because of the additional unemployment benefits, the seeker will forgo exploring inferior openings in favor of the relatively more attractive ones. He can afford to be more choosy.</br></br>These reduced options become his new set of opportunities. It is in this sense that the incentive to search for jobs is reduced. In turn, the reduced set implies a longer period of job search and a lengthening of the average period of unemployment. Because of lengthening unemployment spans, it also implies, all other things being given, a tendency for total unemployment to rise.</br></br>William Beranek</br></br>Aiken, S.C.