Bernanke: Unemployment Benefits Don’t Keep Jobless Rate High

Unemployment insurance may help encourage workers to stay in the labor force, Federal Reserve Chairman Ben Bernanke said Monday at an economics conference.

Providing benefits to workers without a job likely doesn’t contribute to the jobless rate or the high level of the long-term unemployed, Bernanke said, responding to questions at the annual conference of the National Association for Business Economics.

“I would not attribute the extent of long-term unemployment or the very high level of unemployment to unemployment insurance,” Bernanke said. “Unemployment insurance is a very important part of our support system, our safety net.”

Lawmakers have debated how long the federal government should provide unemployment insurance to laid-off workers, with some arguing it could diminish unemployed workers’ motivation to find another job. Bernanke didn’t weigh in on how many weeks of aid the government should provide.

Bernanke also said that the slow rate of wage growth is likely consistent with his view that the high rate of long-term unemployment is due to cyclical factors, rather than structural reasons. Economists generally think cyclical unemployment is caused when weakness in the overall economy pushes down demand for goods and services and therefore the need for workers that provide them. Structural unemployment reflects deeper problems, such as a gap between the skills workers have and those that employers want. Structural problems don’t disappear as the economic recovery gains traction.

“The interesting question at this point is: will the improvements we’re seeing in the labor market– will they continue to feed into consumer confidence, which we’ve seen happening to some extent, and will they start to feed into earnings?” Bernanke said. “We haven’t really seen that in a persuasive way yet,” he said. Fed officials must “remain cautious and see how the economy develops.”

Bernanke also noted that wages aren’t pushing up inflation.

“Wages themselves are not a major concern for inflation,” he said. “We still need to be concerned about commodity prices and other factors.”

Por: Kristina Peterson
Fonte: Real Time Economics, em 26 Março