Our permanent Unemployment

The Washington Post today spent some time discussing whether our system of unemployment has become a welfare system.  The longest can receive 99 weeks of unemployment compensation.  Let's just say that you are no week 85 of unemployment.  85 weeks of looking for work.  In that time youhave had countless interviews, a couple of rejections based on "better" fit...and a whole host of companies that simply change their mind about hiring.  Would you be here to complain about unemployment compensation?  Or argue against it?  Even as you diligently sit each day looking for what will hopefully the next opportunity that pays you "what you're worth" I wonder about what would be so wrong with "under-employment"?  Inconvenient, for sure.    If there weren't the unemployment compensation system, wouldn't you be under-employed right now?  You are a hard worker.  You are generally competent. On the face of it you'd rather work than not work.  But there is this problem.  You have a home, a family of 4, rent of one form or another to pay and mouths to feed.  Under the government system that we have in the United States here is what is available.  $388 per week in unemployment compensation,  $688 per month for food and medical care that is pretty good.  Let's put a monetary value upon it of $300 per month.  (Even though it would probably be closer to $800.)  Let's see what this means.  This translates into almost $36,000 a year for an individual to remain unemployed.  (OK, you do the math.)

Now this assistance, while we can all appreciated in the sense that there might be something, rather than nothing coming in, has unintended consequences.  This assistance creates an artificial floor under which it does not make economic sense for one to take employment.  That is if you come from working  within organizations where target compensation is over $150,000 annually, why settle for a 30,000 "reset". 

So, under what circumstances does it make sense for this individual, since he's "...worth $150k..." according to the market, to take a position for say $40,000?  After this individual has begged, borrowed and pleaded with creditors, family, friends, his savings account and is now struggling to keep the bills paid, does it make sense for him to take a job for $40k when the elusive 6 figure job is just around the economic bend?  How does this guy communicate to his wife that he is going to take this position?  Of course, faithful always, she knows that his six figure job is just around the bend.  Why 40k?  Take taxes and health care out of that and he can make the same amount of money by sitting home and looking for something more. 

Will he ever find it?  In this economy, we may never know.