Thursday, March 18, 2010

Bailout Bank (JP Morgan/Chase) Released Report Stating Extended Jobless Benefits Is Reason For High Unemployment - Republicans Agree

Lengthened availability of jobless benefits has raised the unemployment rate by 1.5 percentage points and has increased the average duration of unemployment spells by over a month, according to a report put out yesterday by JPMorgan Chase Bank.

The report claims that jobless benefits have the potential to increase the unemployment rate by softening the blow of losing a job and encourage people who would otherwise drop out of the labor force to be counted as job seekers and therefore in the labor force.

Analyst Rick Ellis explains the math behind the report's findings:
If the current national rate was 10 percent, half of that (or 5 percent) is what you would typically expect to see in a healthy economy. Of the remaining 5 percent, 1.5 points is attributable to the extension of unemployment benefits past the recent historical threshold of 26 weeks.

Republican pundits were already repeating that 1.5 point number late Wednesday, using it as a talking point in favor of letting the extended benefits expire.

Ellis disagrees with the premise behind the JP Morgan Chase theory:
The national unemployment rate peaked in late 2009, and at that point, only 20 of the 47 weeks of extended coverage had been enacted. ... The addition of another 27 weeks of coverage should have sent the national unemployment rate back up sharply. Instead, the number remained at pretty much a steady level.

However, the analysts at JPMorgan Chase aren't the only ones claiming that extended federal unemployment benefits are adding to the country's jobless problem.

Gary Wolfram of the Business & Media Institute writes: "It ought to be clear that if we reduce the cost of becoming or remaining unemployed, then we will have greater unemployment ... One reason we have had such a “jobless recovery” is due to the reduction in the cost of remaining unemployed due to the expansion of unemployment benefits."

You can expect to hear more of these arguments in the weeks ahead when the U.S. House of Representatives takes up the Senate jobs bill that would extend the deadlines for filing for federal extended unemployment benefits through the end of the year.

Source Story

Note from the blogger: This article was found today from Remember that the American taxpayer bailed out the goons at JP Morgan/Chase. Michael Feroli, Chase Bank, is the person we all have to thank for this recent study from Chase bank.

I bet our tax dollars helped pay Mr. Feroli for this study. His email is in case you had something to say to him.

If stories like this infuriate you as much as they do me, let me know in comments. It would seem to me the reason for our high unemployment is the simple lack of jobs. But what do I know - I'm just an average tax paying, law-abiding citizen.
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