Some Anecdotal Evidence That Jobless Benefits Make Things Worse

Kudos to Dan Mitchell over at International Liberty for finding this letter to the editor in the Marietta Times from an employer who was actually trying to hire people to expand his business, but has been thwarted by the state government's unemployment insurance program (which recently turned into a federal giveaway program). Dan wrote a blog post about the phenomenon this morning, and it's well worth the few moments spent reading it because it has some excellent links to information about what he describes as the "perverse impact" that unemployment "insurance"* has on actual employment. 


As I have previously explained in an earlier, well read piece titled  The Best Place to be Poor,  anecdotal evidence can be used to mislead people. But it always has some truth to it as well, and it's often a good way to illustrate a point. In this case, the letter describes what happened to one construction company when it tried to expand last year and hire some new workers to do so. Here are some excerpts to start you off:

"The plan was initiated, the additional contracts were signed up and then we set out to hire the employees. Little did I know that attempting to hire the employees needed, which I had thought to be the easiest part, would turn out to be a nightmare if not impossible. I'm sure that reading this you will be almost as surprised as I was directly experiencing it.

My experience: Before 2009 if our company advertised for an open position, on average we would get 20 to 30 applications, interview six to eight of the applicants, and hire one or two, based on the quality and potential of the candidates. This process has been deteriorating dramatically since 2009 and now at the end of 2011 it has completely hit bottom. Of all the applications that we have received this year, when asked why they were seeking a job with us, one out of three answered: my unemployment is running out and I have to go back to work. Earlier this year after I hired two new full-time employees, went through our company's orientation process, fitted them with our work clothing and booked them to start within a week, they both quit. One called ahead of the start date to apologize but wanted to inform us he would not be coming in because the government had just extended unemployment benefits again. The second one just did not show on his first day and when I called him he said he couldn't come in now because unemployment had been extended and he was making almost as much as we were planning to start him out with. If this is not frustrating enough to those of us that provide jobs and pay taxes let me give you my last two attempts this year." 

Read the rest here ...

As you can see, no matter what you read that informs you to the opposite, common sense tells you that people would rather sit on their ass (if they are getting paid to) than answer to a boss and be held accountable for their contributions. It's just easier. And when it comes to sense, the common type is usually the best kind.

It's just one reason that government benefits, while trying to make things better, often make them worse.

* (quotations on the word, insurance, are mine)

Crunching The Numbers

I received a forwarded email this morning which contained an interesting analysis of the much talked about surge in employment the country has experienced according to the most recent government numbers. The analysis is by Arthur Cashin in his always informative and entertaining daily missive called "Cashin's Comments" which I enjoy immensely whenever I can get my grubby little hands on it.

His somewhat whimsical history lessons are mixed in with market commentary and analysis and I would happily pay him for a subscription to it. Unfortunately, it is not for sale and I am guessing it is available only to clients of his employer as a gift, and I am not among them. I receive it from time to time as a professional courtesy from a colleague in the financial industry and I don't use it as a tool to earn money, with so I'm guessing Art doesn't mind if I enjoy his efforts. At least I hope not.

I also hope I am not breaking any copyright laws by making it available. The copyright is held by UBS corporation and I do not know how to get their permission for a reprint. It is not an article which can be linked to as is my usual custom, so attribution is the best I can do. The following is his analysis:

Dissecting The Somewhat Suspect Payroll Data
"As we suggested in yesterday’s Comments, Friday’s non-farm payroll numbers got swallowed up by the on-going worries about Greece. But, the “jump” of 290,000 new jobs was a big topic on the weekend talk shows. There was a lot of “we’ve turned the corner” portrayals. Longtime readers know I’ve thought some of the improvement in the data was “suspect” (to be kind).

For the last eight weeks, Initial Unemployment Claims have averaged 450,000 per week. So, over the last four weeks, 1.8 million people were laid off. How does that fit in with the claim that 290,000 new jobs were created? The obvious answer is that it doesn’t.

So, let’s drill down into the payroll numbers to see what’s going on. The CES Birth/Death adjustment added 188,000 of those jobs. Birth/Death does not refer to people but to businesses. The BLS guesses how many new companies opened versus how many closed their doors. The BLS then uses that guess to guess again how many jobs those business created or lost.

Another 66,000 of the new jobs came from census hiring. Those are temporary jobs and those folks will be laid off later in the year. Speaking of temporary, another 26,000of the new jobs were non-census temporary. Let’s recap. A guess produced 188,000 of the jobs, 66,000 were census and 26,000 were temporary. Thus, it seems 280,000 of the 290,000 “new jobs” were either temporary or the result of guesswork. Some turn. Some corner."

It's always the "numbers behind the numbers" that matter if you are trying to get an accurate picture with statistics. It's why it took a few days to figure out that GM paid back all the money they owed to the federal government (themselves the owners of GM) ahead of schedule, with a different government loan. Which is also why a biased media and an intentionally misleading government don't want you to crunch them.

Instead of the numbers getting crunched, it may be the politicians who get crunched, at the polls.

The American Suicide Bombers

The hardest enemies to fight have always been the suicidal. Those maniacs who are resigned to death in the quest to attain their goals, in the past and now, have something in common with each other, delusional visions of post mortem glory.

The Kamikaze pilots during what may ultimately prove to be a futile war against those who would change our way of life thought they would gain glory with the Emperor and their deceased relatives shortly after their fiery demise. They may have been the most effective weapons employed against us in that struggle.

The delusional Islamo-Facists who were merely copycats of that effort flew our own airliners into American buildings in an attempt to destroy freedom here with the idea that they would be rewarded with sexual adventures with numerous underage girls in some bizarre fantasy "heaven" for their sacrifice.

And now in our own country we have a group of legislators who, like the Bushido Japanese back then, see that they are about to lose their political lives and are willing to go out in a blaze of glory under the also delusional fantasy that their legacy will be the undying future admiration of millions upon millions of grateful recipients of government largesse who are delighted to have turned over the decisions about their own health to government employees. The "leaders" now feel so close to the ultimate goal of control for which they have striven for a century or more, that not even the prospect of political unemployment matters any longer.

Unless they are even crazier than I think, they now know that the orgasmic "twenty-somethings" and the mentally unhealed hippies of the sixties who voted them in while the "thrill was still going up their legs" have returned to less exciting pass-times like mourning Michael Jackson. Most have lost interest in going to the polls in hopes of change. Maybe the thrill has lessened along with their prospects for useful work.
The neo-socialists in congress and the White House are probably about to be "un-elected" in the face of actual 17% unemployment, and 34.5% unemployment among young black males. It's too late to turn back, so they have decided to blow themselves up with the nationalized health insurance bomb instead of merely dropping it on Americans.

With support dropping to 38% for the two thousand page monstrosity that none of them have read, and outright opposition going up faster than the price of gold, no rational person could deduce that Americans want this shoved down their throats. Even those who admire socialism conceptually (due to their belief that everyone must be as stupid as them and thus the government needs to "do something") are getting uncomfortable with the idea that a game-changing shift in national direction should be forced on the citizens with anything close to an even split. This isn't some tax policy or traffic law where a simple majority is sufficient. This is a fundamental change in that quaint old notion of the "American way."  And this one is opposed by more than a majority.

If you are entertaining the notion that everyone will fall in line in support of this after it’s rammed through, try that theory out by forcing a huge new change on your social club or church congregation with the support of 51% of the membership and see what happens the next year. Here’s a hint, it won’t be harmony, and it might be revolt.

The only thing we can do now is what our brave sailors did to the kamikaze crazies at the end of WWII -- help them along in their quest for oblivion, even if it means we have to temporarily re-elect the nitwit Republicans for a term or two in 2010 until a new way to select our representatives emerges.

To do anything else would be to commit national suicide.