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December 31, 2009

Helping the unemployed

The unemployment situation isn't getting better. As a result, Congress has extended unemployment compensation payments for the third time. Is this the best way to help those without jobs?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"This has actually been a source of debate in economic circles, particularly among labor economists, for many decades. I remember when I came to N.C. State over 30 years ago, one of my colleagues then was studying this issue. And the current system we have in essence says that if you're unemployed and you qualify, the government will pay you. It's a modest amount, but the government will pay you hopefully enough to live on for a certain number of weeks. As the recession has gone on, the number of weeks has been expanded. Some economists - like my colleague over 30 years ago - have said, you know, maybe there's a better way. Maybe what we ought to do is provide folks who are unemployed a very large, one-time up-front payment. This would be several thousand dollars that they would get when they qualify, and they could use this not only to live on but hopefully also to perhaps relocate to an area where there are better jobs, more plentiful jobs, or to go back to school to get retrained so the likelihood of their being rehired is greater. So I think this is something we want to consider once the recession goes away. Are we handling helping the unemployed in the most efficient way?"

Posted by Dave at December 31, 2009 08:00 AM