Unemployment Benefit Debate

8 Jan

Compassion for your neighbor or enabling laziness?

This seems to be the gist of the debate on extending unemployment benefits.

This week, our Congress debates extending emergency benefits to the millions of unemployed Americans that were canceled at year end as part of the compromise made to our budget crisis last year.

In this link, a very smart man makes the case for extending the benefits.

Dr. Mohamed El-Erian is no Socialist. He’s a Cambridge and Oxford educated, former deputy director of the IMF and now is the CEO of the world’s largest mutual fund company, PIMCO.  He’s a capitalist.  He’s also pragmatic.

He does talk to the thought that by extending these benefits, you remove any incentive for folks to try and get work.  This is the one valid argument against the extension.

However, as he points out, pragmatically, this costs our country more than it saves us.  He doesn’t spend too much time here but alludes to the fact that incentives aren’t the root of this unemployment issue.

To flush that thought out further, I think we can look at the mismatch in the skills of the unemployed and the openings for jobs in the private sector.

Last weekend, at a cocktail party, I was fascinated to meet and discuss this topic with the CEO of a Silicon Valley start up.  This man has taken three companies from start up to cash out and is a billionaire many times over. “Why don’t I retire?” he asked me “I love the thrill of staring a new venture!”

He surprised me when he said his new start up is having trouble finding qualified people to fill needed roles in his company.

“How can that be?” I asked him. Apparently, while millions are out of work, millions more simply lack the required skill sets employers need in today’s modern workplace.

There we have it. 4.1 million employable Americans have not had a job for over three years. All the while companies across the country have jobs to fill if only they could find qualified workers.

Seems to me the solution lies in incentivizing folks to obtain the right training need to fill these jobs.

Maybe I’m just being too practical. Your thoughts?


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