On the national level we’ve been having a debate about unemployment benefits. Democrats want to extended an expansion of unemployment benefits put in place along with other so-called “stimulus” policies. Republicans argue that these expanded benefits contribute to longer terms of unemployment while costing taxpayers too much money.
Who is right? Vermont might hold a clue. That state recently put a limit on the length of welfare benefits, and so far it appears to have resulted in not only fewer people on the program but fewer people unemployed as well.
“Anecdotally, we are hearing from our staff that the time limit … is contributing to people leaving the program early because they know they’re going to have to get off,” Department of Children and Families Commissioner David Yacovone told reporters in Montpelier on Monday. ”You know that old saying, There’s nothing like a deadline.”
In 2013, 6,500 households were getting ‘Reach Up’ payments from the state. That number is now about 6,300, according to Yacovone.
Since the time limit went into effect July 1, unemployment has dipped by a few thousand.
In July 2013, the unemployment rate was 4.6 percent but fell to 4.4 percent by November, the last calculation thus far.
This would seem to indicate a positive reform on the part of Vermont’s agencies, unless the figures mean people are dropping out of the work force altogether, which is unlikely according to the officials at the Department of Finance and Management.
It’s almost like when we stop subsidizing unemployment and government dependency, we get less unemployment and government dependency.