This is an extreme rarity. I am going to make an economic prediction. If Congress DOES NOT pass further extensions of Unemployment Benefits, the Unemployment Rate will continue to decrease throughout June of next year. This is so simple I’m surprised no one is commenting on it. The unemployment rate does not reflect the actual number of people who are unemployed; it only reflects the number of people who are currently collecting unemployment benefits.
As it stands now, a person may collect their regular duration of benefits, plus three or four extensions depending on how high their state’s Unemployment Rate is. As it stands now (as long as Congress does not pass more extensions), whatever tier of benefits you are on at the end of this calendar year is the last balance of money you can collect. Of course, some people have run out a little earlier, say, in November – so voila! The Unemployment Rate (surprise, surprise) has now dropped from 9% to 8.6%. With no new extensions, even the people signing up for a new, regular claim now will exhaust their money in (at the most) six months. So, from January 2012 to June 2012, every month – in fact, every week, the Unemployment Rate will improve as more and more claimants exhaust their last week of Unemployment Benefits.
I am an Unemployment Claims expert and have worked in Unemployment extensively for most of the last 24 years. I am not saying people can’t get jobs and their Unemployment is just running out. There are as many different situations as there are people. Every day I speak to people who are clearly sincere in their efforts to find work. Every day I also speak to a smaller number of people who clearly are NOT looking very hard for work. (We have had waitresses and fast food workers who have exhausted their money. Are we really expected to believe they could not find comparable work IN TWO YEARS!?) Of course, there are the “hard to place” claimants – my heart goes out particularly to the older workers who have a notably hard time finding work despite their best efforts. In the last couple months I have noted A SURPRISINGLY LARGE AMOUNT OF PEOPLE TELLING ME THEY GOT A JOB, OR HAVE HAD, OR ARE ABOUT TO HAVE A PROMISING INTERVIEW. My perception (for what it’s worth) is that the job situation IS getting better.
At the risk of boring you, Unemployment Benefits were created during FDR’s administration, as a safeguard against another depression. It is intended to prevent an endless downward cycle ie; my employer went broke, the former employees have no choice but to accept much lower paying positions, they have no choice but to spend less money, so other businesses make less and have to lay off more employees who will have to accept lower paying jobs etc. Unemployment benefits provide you a small safeguard against having to take A MUCH LOWER PAYING JOB RIGHT AWAY for the sake of keeping your family fed and a roof over your head.
Every state pays a different amount of benefits. The average state pays a weekly amount slightly better than a FT minimum wage job would pay. Many people who now realize they are going to exhaust their benefits may have to set their standards of what they will accept a little lower. Anyone who gets some kind of a full time job, or a couple part time jobs, should not be earning considerably less than they got on unemployment. By the way, the longer you go without employment, the harder it is to get a job, so if you at least have some type of job, you do not have a huge hole in your employment history that a perspective (better paying) employer could question.
HERE IS MY BIGGEST PREDICTION – due to the constantly lowering unemployment rate over the first six months of next year, the economy will be perceived as vastly improving and Obama will be reelected.
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