One of the ancillary benefits of the success of Michael Wolrach's Unreasonable Men is that when websites like The National Memo choose to excerpt from it I get to know websites like The National Memo.  So, today I found their excellent write-up about a study showing that cutting unemployment benefits failed to motivate workers to rejoin the work force.

The conclusion there is hardly surprising.  The economic recovery has been driven largely by margin expansions involving cost cutting, not job creation.  Whether or not you give people unemployment benefits, they cannot go back to work if there are no jobs.  Further, unemployment benefits in the United States are not generous.  The idea that people prefer a subsistence lifestyle to a reasonable salary has always struck me as absurd. Yes, there will be some exceptions (there always are) but the idea that life on welfare is somehow a life of luxurious leisure can only have been pushed by people who have never been on welfare and sold to people who imagine that somebody is getting away with something while they work.

That said, the post Financial Crisis era did not leave to rampant starvation in the streets (I want to be careful there, some people have, in fact, starved in the streets and some children suffer from malnutrition so I don't mean to dismiss this as problems solved).  Somehow, during a period of high unemployment, people have found a way to get by.  We know that unemployment benefits and food stamps are not enough, particularly for unemployed people with dependents. We know that, contrary to economic logic, that the state scaled benefits back when they were needed the most.  So, how did we avoid a total Grapes of Wrath nightmare?

The answer, I think, is friends, neighbors and families.  When the state falls down, people step up to fill the gap.  The psychic and financial sacrifices that people have to make to support a sibling, a parent, a cousing or an in-law are considerable and not really well covered in the media.  In terms of job creation and new business development it's a definite negative.  It's hard enough to leave a job to try to create your own business without having extra temporary dependents.  

When the state reduces unemployment benefits politicians will say that they are protecting the public coffers and reducing burdens on taxpayers.  What really happens, though, is that the state transfers its obligations onto working people.  A burden on the State Treasury becomes a direct burden on individual bank accounts.