Tuesday, May 11, 2010

The Problem With Safety Nets

This helps define the problem with cushy unemployment benefits and multiple extensions. Why would someone jeopardize their guaranteed check from Uncle Gubmint than go out and work at a temp job. When they run out of extensions then it's time to go looking for a job, not beforehand.

Landscapers are having trouble filing temporary jobs in Michigan-- who has the lowest unemployment in the US-- because people don't want to give up their unemployment checks.

Landscape workers can earn about $12 per hour in Michigan and would make $480 per week before taxes working full-time, or about $350 per week after taxes. In addition, full-time landscape workers would face transportation costs and other work-related expenses. But collecting unemployment benefits and working zero hours per week, many of those unemployed workers can receive $255 per week tax-free for almost two years, which is only $95 less per week than if they worked full-time. For some workers who are getting the maximum of $387 per week in jobless benefits, they can receive even more from collecting benefits than they would get paid going back to work full-time.

It's policies like this that help kill the entrepreneurial spirit of a nation.

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