I Expect Employment Numbers To Improve


I stumbled upon a recent report, Hat Tip Calculated Risk, that is saying a number of states are changing their unemployment eligibility standards.  Apparently the number of weeks that a person is eligible for unemployment has been a standard 26 weeks:

…the maximum number of weeks that jobless workers can receive unemployment insurance to less than 26 weeks—a threshold that had served as a standard for all 50 states for more than half a century…

So, for 50 years we have been following a standard without question.  It turns out that at least 6 states in the good ol’ US of A actually DO read TarHeel Red.

See, for a long time I’ve argued that one of the reasons we see extended unemployment is that we offer benefits for so long.  We create the incentive to remain unemployed.  Now, it may be true that the benefits are enough to keep the individual in home and food, but barely.  However, it’s also true that the benefits encourage “under the table” wages.  Either way, the incentive to work is gone.  And when that incentive to NOT work is replaced with the incentive TO work, well, people will, in general, work.

So, to that end, I hereby predict that the following 6, actually 4 –25 is not very different from 26– states will see their employment/unemployment numbers improve:

Michigan, Missouri, and South Carolina cut their available weeks down to 20; Arkansas and Illinois cut down to 25; and Florida cut to between 12 and 23 weeks, depending on the state’s unemployment rate.

As of this month, this is where each stands:

Every one but Arkansas is down from the same time last year.Only Missouri is down since last month with Florida holding it’s own.  Michigan has seen the largest improvement over the last year Illinois and Florida coming in second.

Let’s see if I’m right.

Michigan Missouri South Carolina Arkansas Illinois Florida
July 2010 12.4 9.5 11 7.8 10.1 11.5
August 2010 12.2 9.6 11 7.8 10 11.6
September 2010 11.9 9.6 10.9 7.8 9.8 11.7
October 2010 11.6 9.6 10.9 7.9 9.6 11.8
November 2010 11.4 9.6 10.9 7.9 9.4 11.9
December 2010 11.1 9.6 10.9 7.9 9.2 12
January 2011 10.7 9.5 10.5 7.8 9 11.9
February 2011 10.4 9.4 10.2 7.8 8.9 11.5
March 2011 10.3 9.1 9.9 7.7 8.8 11.1
April 2011 10.2 8.9 9.8 7.7 8.7 10.8
May 2011 10.3 8.9 10 7.8 8.9 10.6
June 2011 10.5 8.8 10.5 8.1 9.2 10.6
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