Political Economics

One way Republicans can take credit for the US jobs recovery

April 10, 2014
April 10, 2014

When you’re on the losing side of politics, your best bet is to muddy the waters, obscure the facts, or at least spit in the other guy’s petri dish.

That seems to be the position US Republicans find themselves in now, with signs of serious momentum building in the job market. It’s been a long time coming, but if honest-to-God labor market improvement finally does materialize on Barack Obama’s watch, that will be a strong talking point for Democrats in upcoming elections. (As a reminder, the economy was essentially a smoldering crater when George W. Bush, a Republican, left the White House.)

But there’s a pretty clear path for Republicans to take on this issue. They have repeatedly blocked the extension of emergency unemployment benefits, arguing that long-term payouts keep the unemployed on the sidelines of the labor market. That’s an unpopular stance. A recent CBS News poll showed 65% of Americans support an extension of jobless benefits. The Senate—with the help of moderate Republicans—struck a deal that would restart benefits. And pressure on the Republican-controlled house is rising to pass it.

But recent economic data have handed Republicans a tool they can use to defend themselves against attack: a sudden spurt of growth in the US labor force, which started right around the time long-term unemployment benefits expired in January.

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Can the Republicans credibly say their policy’s have been just the thing to get Americans back to work? Well, no. Probably not.

There’s a long-standing debate among economists about whether unemployment insurance acts as a disincentive to would-be workers. Some studies have suggested that the extension of unemployment benefits have helped add to the long spells of joblessness seen during and after the Great Recession. (Here’s one of them.) And of course, other economic studies have knocked those findings down. (Here’s one of those.)

But the fact of the matter is that all of the sudden, right around the moment when 1.3 million Americans were cut off from benefits, the US labor force has sprung back to life.

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For Republicans, whether this argument stands up to economic scrutiny isn’t important. As unpopular as it was to cut off unemployment benefits, the decision does have have a powerful appeal to the sort of tough-love approach that plays well in large chunks of the American populace. After all, they’re presenting a political argument, not a peer-reviewed economic paper.

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