Unemployment

Many American workers have not yet regained their footing in the aftermath of the Great Recession, yet unemployment insurance has become politically controversial even though jobs are still scarce. Critics claim that America’s unemployment insurance program “subsidizes leisure” by “paying people not to work.” Some critics have lampooned extended unemployment benefits for supposedly turning “our social safety net into a hammock.” Congressional Republicans deferred to such criticisms in January, 2014, when they blocked the sort of renewal of long-term unemployment aid that has been traditional after previous severe economic downturns. As a result, roughly one million of the long-term unemployed saw their benefits abruptly cut off.

How much truth is there in these criticisms of unemployment benefits? By easing the financial harm of job loss, does unemployment insurance actually undermine people’s desire to find work? Does it make work less attractive or encourage the jobless to enjoy their added “leisure” time?By easing the financial harm of job loss, does unemployment insurance undermine people’s desire to find work?

To address these questions, I used data from the Panel Study of Income Dynamics to track thousands of people over time as many experience events that change their life circumstances—not just job loss, but other disruptions such as changes in income, giving up their house, suffering a debilitating illness or injury, having a child, and watching children leave the family nest. What comes through loud and clear in my study is that job loss is a severely disruptive occurrence that proves psychologically devastating to many people who experience it. The effects can also persist long after formerly unemployed people find new jobs. more...

“Welfare” as it now exists in the United States aims to provide a short-term safety net for very needy families with children and prepare adults to get jobs. The Temporary Assistance for Needy Families law passed by Congress in 1996 said that cash assistance should be limited to no more than five years (sixty months) over a lifetime. But states were allowed some flexibility to extend this limit for up to one-fifth of their welfare recipients who face unusual problems.

Until last year, the state of Maine took advantage of this flexibility to provide extended help to less than 15% of its caseload. Some people could continue to get benefits if they complied with all welfare rules, including the rule about seeking or preparing for employment. But in 2011, the Maine legislature voted to make the sixty-month limit virtually absolute. Exceptions would be granted only if people were awarded a special hardship extension due to coping with disability, domestic violence, or the need to care for a disabled family member.

When the new law took effect in 2012, more than 2,000 Maine families were affected. About 44% requested hardship extensions, but only a quarter of all people scheduled for termination got the exception. Since January 1, 2012, more than 1,500 Maine families, including 2,700 children have lost cash benefits. Who are these families and what are their circumstances? To answer this question and consider whether welfare has adequate protections for the most vulnerable, I surveyed a sample of 54 Maine families whose benefits were stopped and did some additional in-depth personal interviews to probe people’s experiences more deeply. more...

Why are so many Washington officials obsessed with budget deficits? And why are they so willing to entertain big cuts to social programs such as Social Security, Medicare, and education, while being reluctant or outright unwilling to increase taxes on the highest income earners? The answer cannot be that most Americans want these choices. Survey after survey shows that large majorities support asking the wealthiest to pay more in taxes and want to maintain or increase spending on Social Security and federal health and education programs.

A possible answer to where budget hawks get energy and inspiration comes from the first systematic survey social scientists have managed to do of the political attitudes of the wealthiest one percent of Americans. Working with a team of scholars from several disciplines, I am conducting a study called the “Survey of Economically Successful Americans and the Common Good.” Most national surveys include only a tiny number of very wealthy citizens, but we used additional data sources to identify a larger sample of wealthy individuals living in the greater Chicago metropolitan area. Further research would be needed to explore attitudes among the very wealthy living everywhere in the United States. But our findings are highly suggestive of what would be found in a nationwide study. For the first time, we are able to pinpoint issues on which the very wealthiest agree or disagree with other Americans. more...