Shocking News: People Are Less Likely to Work When Government Subsidizes Joblessness

Kudos to the Detroit News for a great story revealing that people are refusing to accept jobs because of government unemployment benefits. None of this should be surprising to people who understand that if you subsidize something, you get more of it. Alan Reynolds has been beating this drum for quite some time, but the message doesn't seem to get through to politicians who think it is compassionate to lure workers into lives of dependency. But perhaps this excerpt from the Detroit News report will help (In a perverse way, I admire the one guy who admits that he doesn't plan to find work until the government stops sending him checks):

In a state with the nation's highest jobless rate, landscaping companies are finding some job applicants are rejecting work offers so they can continue collecting unemployment benefits. It is unclear whether this trend is affecting other seasonal industries. But the fact that some seasonal landscaping workers choose to stay home and collect a check from the state, rather than work outside for a full week and spend money for gas, taxes and other expenses, raises questions about whether extended unemployment benefits give the jobless an incentive to avoid work. ...Chris Pompeo, vice president of operations for Landscape America in Warren, said he has had about a dozen offers declined. One applicant, who had eight weeks to go until his state unemployment benefits ran out, asked for a deferred start date. ...Some job applicants are asking to be paid in cash so they can collect unemployment illegally, said Gayle Younglove, vice president at Outdoor Experts Inc. in Romulus. "Unfortunately, we feel the economy is promoting more and more people and companies to play the system and get paid or collect cash money so they don't have to pay taxes," Younglove said. ...A full-time landscaping employee would make $225 more a week working than from an unemployment check of $255. But after federal and state taxes are deducted, a full-time landscaper would earn $350 a week, or $95 more than a jobless check. ...The federal jobless benefits extension "is the most generous safety net we've ever offered nationally," said David Littmann, senior economist of the Mackinac Center for Public Policy, a free-market-oriented research group in Midland. The extra protection reduces the incentive to find work, he said. It's impossible to know exactly how many workers are illegally declining employment, but 15 percent of Michigan's economy is underground, where people trade services, barter or exchange cash without reporting it to the government, Littmann said. One former landscaper, who has been on unemployment for a year, said he will search for work when the benefits expire, but he estimates he earns about $50 to $60 less a week than he would if he were working. "It's crazy," he said. "They keep doing all of these extensions."