Both right-wing and lef-wing statists are wrong when it comes to unemployment. While conservatives like Rick Perry blame the unemployed for their laziness, newspeak liberals like Paul Krugman implicitly claim that cutting unemployment benefits is showing a lack of sympathy towards the unemployed.

True, some of the unemployed can be deemed lazy because their aren’t actively looking for a job. However, their action is actually rational since they have no incentives to look for a job. Indeed, when one makes one cent above certain thresholds, one loses every benefits.

I saw it happen around me, where a woman nearly lost all her food stamps benefits because she and her husband were making slightly “too much” to receive them. Considering she’s living in New York City, this would have been a budgetary catastrophe. Now, report that to the 50-some million people receiving food stamps and the many profiting from Medicaid, and you have a good explanation why U-5 and U-6 (which includes discouraged workers and part-time who would prefer full-time jobs) are still much higher than the official unemployment rate – a reminder that the Obamacare expansion (where it happened) only covers people making below a certain amount. Those making above that amount can still receive government subsidies to get insurance if they don’t make “too much”.

I even saw it happen in my own family. For the longest time, only my mother was providing for our family of five. The temptation was great for her to go unemployed so my sinblings and I could receive some “free” services like eye and dental care. Fortunately, our father was proud enough not to go down that road. He eventually went back to school and found a job!

Benefits Begetting more Benefits

In other words, long-term benefits beget more long-term benefits as people are caught in the “safety net”. Authors like Ludwig Von Mises warned us about the dangers of unemployment benefits, as they encouraged workers to remain idle. And the more they remain idle, the more they are likely to see their talents fade away.

Of course, state intervention doesn’t help the unemployed to find work. With such regulations as occupational licensing, compulsory unionization and minimum wage, the price of work gets too high for people to be employed. As a result, the low-skilled workers are the first ones to boost the ranks of the unemployed.

In short, although conservatives are right to want to slash long-term unemployment benefits, they also need to be consistent with their small-government mentality and deregulate work regulations. This way, people will have fewer incentives to “sit around” since they will either not receive enough money to do nothing or actually have incentives to start their own business since they won’t have to ask government permission.