Jobless Benefits Increase Joblessness

By Grant Davies

Kudos to Dan Mitchell over at International Liberty for finding this letter to the editor in the Marietta Times from an employer who was actually trying to hire people to expand his business, but has been thwarted by the state government's unemployment insurance program (which recently turned into a federal giveaway program). Dan wrote a blog post about the phenomenon this morning, and it's well worth the few moments spent reading it because it has some excellent links to information about what he describes as the "perverse impact" that unemployment "insurance"* has on actual employment.

As I have previously explained in an earlier, well read piece titled  The Best Place to be Poor anecdotal evidence can be used to mislead people. But it always has some truth to it as well, and it's often a good way to illustrate a point. In this case, the letter describes what happened to one construction company when it tried to expand last year and hire some new workers to do so. Here are some excerpts to start you off:

"The plan was initiated, the additional contracts were signed up and then we set out to hire the employees. Little did I know that attempting to hire the employees needed, which I had thought to be the easiest part, would turn out to be a nightmare if not impossible. I'm sure that reading this you will be almost as surprised as I was directly experiencing it.
My experience: Before 2009 if our company advertised for an open position, on average we would get 20 to 30 applications, interview six to eight of the applicants, and hire one or two, based on the quality and potential of the candidates. This process has been deteriorating dramatically since 2009 and now at the end of 2011 it has completely hit bottom. Of all the applications that we have received this year, when asked why they were seeking a job with us, one out of three answered: my unemployment is running out and I have to go back to work. Earlier this year after I hired two new full-time employees, went through our company's orientation process, fitted them with our work clothing and booked them to start within a week, they both quit. One called ahead of the start date to apologize but wanted to inform us he would not be coming in because the government had just extended unemployment benefits again. The second one just did not show on his first day and when I called him he said he couldn't come in now because unemployment had been extended and he was making almost as much as we were planning to start him out with. 

If this is not frustrating enough to those of us that provide jobs and pay taxes let me give you my last two attempts this year."  Read the rest here ...
As you can see, no matter what you read that informs you to the opposite, common sense tells you that people would rather sit on their ass (if they are getting paid to) than answer to a boss and be held accountable for their contributions. It's just easier. And when it comes to sense, the common type is usually the best kind.
It's just one reason that government benefits, while trying to make things better, often make them worse.

* (quotations on the word, insurance, are mine)

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