Rand Paul: Taxpayers, jobless hurt by extended aid

Rand Paul is Kentucky's junior senator.
Rand Paul is Kentucky's junior senator.

Economic illiteracy condemns us to well-intentioned, big-hearted, but small-brained responses to real problems.

Millions of people are out of work. We all have sympathy for those who are unemployed and I believe it is our moral obligation as a society to take care of those who cannot take care of themselves. Liberal pundits try to argue that Democrats are the only ones who care about the poor and unemployed, but the truth is, caring doesn't help unless it is linked to good policy.

The first thing we have to do is help the unemployed secure jobs. That is why I went to Detroit last week, to present a blueprint for individual liberties and free markets. The "Economic Freedom Zones Act of 2013" is merely one idea that will aid cities where unemployment is more than one and a half times the national average.

This legislative idea will reduce red tape and punitive taxes, and thus, more money will be left in the hands of those living in these cities.

The Republican Party has always proposed ideas of less government and more freedom. We think everyone should have the opportunity to obtain a good job, to provide for their families and to give their kids a good education.

But long-term unemployment is clearly also a problem. No one asserts that the problem is people not wanting to work. In fact, the problem is not in the minds of the unemployed but in the minds of employers.

Study after study indicates that employers choose workers who have been out of work for shorter periods of time.

If an employer can choose between someone who has been out of work for two months or someone who has been out of work for two years, they will almost always choose the former.

In fact, it's worse than that. According to a study by Rand Ghayad and William Dickens for the Federal Reserve Bank of Boston, employers will choose a less-skilled worker who has been unemployed for two months over a worker with more skills who has been unemployed for two years.

So yes, extending unemployment benefits to two years does a disservice to the unemployed. I want to be clear: No one is blaming the worker. Economists are simply looking at the facts that motivate employers.

In fact, you could argue that conservatives who argue for shorter unemployment benefits actually have more concern for the worker than liberals who believe in no limits. Conservatives want to get every able-bodied person back into the work force.

There are currently 4.1 million Americans — 37 percent of the unemployed — who have been without work for over 27 weeks, and research shows that extending long-term benefits will only hurt their chances in the job market.

According to the public-policy brief by Ghayad and Dickens, these 4.1 million Americans will struggle finding a job regardless of job creation or vacancies. Why? Simply because they have been out of the work force for over six months and employers immediately assume that their skills are outdated.

Using a Beveridge curve to gauge the relationship between unemployment and job openings, Ghayad and Dickens found that the only discrepancy is with applicants who have been unemployed for a long period of time.

As Matthew O'Brien from The Atlantic put it, "It doesn't matter whether you are young or old, a blue-collar or white-collar worker, or a high school or college grad, all that matters is how long you have been out of work."

As a nation, though, there is more to be considered. The biggest consideration should be our $17.3 trillion debt. Should we continue to borrow from China to pay for unemployment benefits? Currently, unemployment benefits are paid for by employer taxes for 26 weeks — anything beyond that is borrowed money.

Bankrupting America to pay for unemployment benefits is not a path to prosperity, nor is it a path toward job creation. We cannot afford long-term unemployment. Our jobless cannot afford it and our government cannot afford to fund it further.

I agree with the Herald-Leader when it states, "Congress should be working on returning experienced workers to productivity and creating jobs for new and veteran workers alike, not punishing the economic victims."

But we must use our hearts and our brains to find answers for the unemployed.

At issue: Dec. 12 Herald-Leader editorial, "Jobless benefits not a 'disservice;' Paul wrong, aid encourages job search"

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