Thursday, December 09, 2010

The price of extending unemployment insurance

Economists call it 'lag' when employment lags the demand for labor.  One of the causes is 'mismatch' - in other words, the jobs on offer are not the ones that the unemployed either want or can do.  Of course when you extend unemployment insurance for the THIRD time, you cause millions of unemployed to 'want' jobs that are better than they would otherwise take.  Thus unemployment stays high far longer despite 'labor shortages'.  

Just one more way that cynical lawyers writing special runes on the magic hard drives cause destruction in the real world,  Sigh.  Hattip Carpe Diem.

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