One of my pet peeves is listening to the government and most people in general, say that when someone loses their unemployment benefits, that they just leave the labor force.

Actually, another pet peeve of mine is listening to people, including the monthly labor report, say that when someone goes onto unemployment, that they all of a sudden get lazy, and don't look for a job.

I can hardly think of two statements that make so little sense. I don't have any real scientific studies or surveys about what people actually do when they become unemployed. And as far as I know, neither does anyone else. I've never seen one. You would think that with all the people who make a statement like "receiving unemployment benefits makes people sit on their ass forever," that there would be some kind of scientific study to support this belief. If anyone has one, I would love to see it.

As far as I know, the amount of unemployment insurance payments that people get does not come close to the level of pay they received at the job that they just lost. I've received exactly one unemployment check in my life, back in 2001 when I got laid off from my job, and it was not even close to what I made at that job. And it wasn't exactly a high paying job, either.

Assuming that unemployment checks aren't as large as their checks from the previous job, does it make any sense that someone on umemployment is making their monthly nut? Wouldn't that person be out looking for a job so that they could meet their expenses? I think so, at least for most people.

Then comes the other statement: that people, when they stop receiving unemployment checks, really stop looking for a job. I mean, totally, just stop looking. So, they were lazy and were just playing video games when they were receiving unemployment checks and not making their monthly nut. Now, they are taking lazy to an even more extreme level when those unemployment checks stop coming, and they are facing compete financial ruin. In fact, they are so lazy, that they are not even considered to be in the labor force anymore. Again, it just doesn't make any sense for the majority of people.

there is a lot of misguided views from the employed about the unemployed.

It's not that they stop looking for work after the benefits run out (I would think the lazy/FSA would start looking at that point).

It's that .gov has decided to not count them because it makes unemployment numbers look better.

The Gallup survey is pretty accurate in my opinion. It eliminates some of the issues you're talking about.

http://www.gallup.com/poll/125639/Gallup....

The unemployment rate for Bachelors Degree or better is 4%. Nothing misguided there. Wise economists ignore the Unemployment rate, FWIW. It's meaningless.

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The unemployment rate for Bachelors Degree or better is 4%.

Like that's even believable. The labour force, overall, hasn't expanded in over a decade. College graduates are being produced in record numbers. A good number of the jobs have shifted into relatively low-skilled "McJobs", away from the higher-skilled jobs that would call for a Bachelors degree.

What may very well be happening is that the new grads of the past decade, a large number of them never even get to consider themselves 'unemployed' because they weren't able to even secure their first job. I've seen plenty of this, especially in engineering and the sciences where jobs for Citizens have been extremely scarce.

here:

The underground economy must be growing, otherwise these people would be starving, and I don't think they are.

"The underground economy must be growing, otherwise these people would be starving, and I don't think they are."

BINGO!!!

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The unemployment rate for Bachelors Degree or better is 4%.

Like that's even believable. The labour force, overall, hasn't expanded in over a decade. College graduates are being produced in record numbers. A good number of the jobs have shifted into relatively low-skilled "McJobs", away from the higher-skilled jobs that would call for a Bachelors degree.

I'm pretty sure this brings up another piece of bs about the unemployment numbers. Those just graduating college, most of whom did not work full time while in college, are not counted as being in the labor force either, AFAIK.

As an aside, the people that I see working at McDonald's around here today are the exact same ones who were working there 6 years ago, for the most part. And they don't have college degrees, unless they got one in Mexico.

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say that when someone goes onto unemployment, that they all of a sudden get lazy, and don't look for a job.

Actually, lazy is not the word, BUT studies do show the higher the amount given and the longer they are available do indeed entice people to stay unemployed.



A study from Sweden:

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The Money quote: "The evidence suggests that benefit generosity increases unemployment."

http://ftp.iza.org/dp3570.pdf

In another study I saw years back ( in Sweden or Norway..can't find a link) clearly showed people would wait until their benefits were about to run out before aggressively looking for work. In simple terms when benefits were for 4 years people found work at the 3 1/2 years. When they reduced the time to 3 years people found work at 2 1/2 years. When it was 2 years people found work at 1 1/2.

It may not be human nature to Ticker folks, but fact is many people will "settle" for free money and ride the gravy train until they have to get off.

I don't have any more posts after this one so i will not be able to respond.

Mattc - Thanks for the link. That Gallup data has YoY improvements by a lot.

(Feb 13th 2011 to Feb 12, 2012)
% FT employed has gone from 63.2% to 63.9%
% Underemployed has gone from 19.7% to 19.2%
% Unemployed has gone from 10.1% to 9%.

That is some real improvement. And actually I would probably believe the college unemployed # is 4-5% based on the 9% from Gallup and what I've seen. It was about 3% before the burst.

Why work when the govt pays you not too?

http://www.businessinsider.com/art-cashi....

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The underground economy must be growing, otherwise these people would be starving, and I don't think they are.

They're not starving but they're living on a lot less, with hopefully a spouse still bringing in some money and/or living on savings. I got laid off and my unemployment was $10 less than half what I was making a week in Texas. It's not exactly the lap of luxury.

underground economy: I KNOW that people are trading services in SoCal. I would ASSume people are trading service everywhere if they are doing it in (non-Mexically) SoCal.

Um, and I know a guy who just figured out (because other people manages his $$) that he is paying so much in taxes — he said it is not worth the effort when you can go back at LEAST THREE LEVELS and take home virtually the same amount with less stress.

I said "Who is John Galt?"

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underground economy: I KNOW that people are trading services in SoCal

They were trading services back in the late 70's. I visited a friend of mine (LA) who was a photographer and he traded his services for many items. He actually had a publication that catered to this activity.

Vegasradar wrote..

underground economy

They're now calling it "System D".

http://www.foreignpolicy.com/articles/20....

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It may not be human nature to Ticker folks, but fact is many people will "settle" for free money and ride the gravy train until they have to get off.

Back at the beginning of 2011 I was contemplating doing the very same thing, at least for 26 weeks. I'm glad I ended up not doing that tho.

Here you go Pitz:

http://www.bls.gov/news.release/empsit.t....

Now read the second part of my statement.

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The underground economy must be growing

Probably, in Mom and Dad's basement