Tags: Morici | defends | extended | unemployment

Morici on Jobless Benefits: 'When Do You Draw the Line?'

By Dan Weil   |   Sunday, 29 Dec 2013 03:16 PM

Peter Morici, a University of Maryland international business professor and a Moneynews Insider, supports Saturday's end of extended unemployment benefits for 1.3 million Americans.

The five-year-old program provided up to 47 weeks of supplemental unemployment insurance to those looking for jobs.

President Barack Obama and other Democrats opposed ending the benefits. "The president is using the unemployment benefits as a wedge issue," Morici told CNN. "This is an extraordinary program; 26 weeks is what we have historically had for unemployment benefits. And there is a question as to whether people delay job searches if they get very long benefits."

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There is evidence that people put off looking for a job depending on how long they receive benefits, Morici says. "So it's a matter of when do you adjust the policy. You can have long-term unemployment benefits down to 5 percent unemployment. When do you draw the line?"

The Labor Department's official unemployment rate was 7 percent in November.

Morici has several suggestions for how the long-term unemployed can be lifted back into the workforce.

"We have to develop new industries. Some of the old jobs aren't going to come back," he said.

"We need to create ways that Americans can be more competitive in Asia, where there's a lot of growth. Suggestions have been made to the president on that score with regard to China and its economic policies that keep our products out."

The United State is enjoying an energy boom that can be enpanded, Morici says. "We prohibit drilling off both the Atlantic and Pacific coasts, and we significantly curtail it in the Eastern Gulf of Mexico."

An expansion in those areas could add 3 million jobs and trim the unemployment rate by 2 percentage points, Morici says.

The country also must increase its citizens' mobility, he says. "Mobility is at an all-time low in the United States," Morici said. "The reality is even if you've got the skills, and you are living in Kansas, where there used to be a factory, and there is now a job available for you in Nevada, you don't have the means to move."

The housing crisis accounts for part of the mobility problem, Morici says: "People under water in communities where there is high unemployment. You're stuck."

"Also, just the money to pick up. A mother with two kids who is 38 years old, has two years of college, no husband, how does she move to a big city? We haven't addressed that. In other countries, they do."

Republican Sen. Rand Paul of Kentucky agrees with Morici that unemployment benefits shouldn't be extended. "I do support unemployment benefits for the 26 weeks that they're paid for. If you extend it beyond that, you do a disservice to these workers," he told Fox News earlier this month.

"When you allow people to be on unemployment insurance for 99 weeks, you're causing them to become part of this perpetual unemployed group in our economy."

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