Tuesday, July 13, 2010

Moral Compensation

The issue of extending unemployment benefits seems all the rage this morning with media outlets like WaPo suggesting that it’s the “fiscally responsible” and “morally decent” thing to do while the majority of NPRs On Point guests yesterday agreed.

While some may believe that extending unemployment benefits is the moral thing to do and further that the elites in Washington are rightfully tasked with deciding what to enact and when wholly on the basis of our apparent collective sense of morals, is it really responsible?

The extension would allow for some 99 weeks… that’s roughly two years… of weekly unemployment compensation yet given the severity of the current downturn we could easily see many millions of former workers surpass even this extent jobless.

Is there no limit?

Is it society’s moral obligation to keep providing you a nominal weekly salary even years after you have exhausted what you have contributed, and even in light of the deficit and debt created by all the other gross misappropriations on the part of the Federal government?

As Paul Krugman put it in his NPR spot from a few days ago, debt and deficit didn’t matter in this case as it was simply cruel to cut off benefits at a time where there were more than five jobless applicants for every job opening (note… this morning’s JOLT report will update this ratio).

So possibly therein lays the acceptable and moral limit… so long as there is excessive competition for open jobs… say a ratio at or over 3:1 jobless workers to job openings, unemployment benefits continue without end and without regard for deficit financing.

But possibly even 2:1 is simply too competitive and immoral… that’s two jobless vying for the same job so there is bound to be a demoralized and dejected applicant at every turn.

Possibly in a world where supposed social morals dictate public policy, deficit financed unemployment benefits would be a constant so long as there were not a job for every jobless applicant.

Or… we could simply implement the original statue which had as its objective to facilitate the states in providing the basic insurance of income support to the unemployed with the amount and duration of compensation commensurate with the applicant’s prior wages and length of employment.