Fox News suggested that unemployment benefits and other government assistance programs contribute to the nation's unemployment numbers, and even claimed that people are quitting their jobs to become eligible for benefits. In truth, unemployment benefits stimulate the economy and create jobs.
Reporting on news that jobless claims dropped by 27,000 last week, America's Newsroom host Bill Hemmer wondered if “government programs might be keeping unemployment rates higher than they should actually be.” Fox correspondent Doug McKelway answered that “some small business owners” say that “it's not unusual at all for people to quit work these days, because they know they can get more from unemployment and other benefits than from hard work.” He continued, “Americans are not working as much today, and there is ample evidence that it's not just an economy stuck in neutral but it may be the increasing government incentive not to work.”
Despite Hemmer and McKelway's claims, studies show that unemployment benefits stimulate the economy and create jobs. In 2010, the Congressional Budget Office (CBO) determined that increasing aid to the unemployed would have a bigger impact on the economy than reducing taxes. The Economic Policy Institute's Lawrence Mishel explained that unemployment insurance is “such good stimulus” because “virtually every dollar spent on extending unemployment insurance benefits goes directly, and immediately, toward the purchase of local goods and services, providing an extremely efficient demand boost.” And near the end of 2012, CBO concluded that extending unemployment benefits through 2013 would create 300,000 more new jobs than would otherwise be created.
What's more, the notion that one could quit work in order to receive unemployment benefits is nonsensical -- In order to be eligible for unemployment insurance (UI), the Labor Department makes clear, you must be “unemployed through no fault of your own (determined under State law).” And importantly, as CBO explained, “To maintain eligibility for benefits while unemployed, UI recipients must search for a new job and, in some states, must accept a reasonable job offer.”