Article: "Incentives Not to Work"

The link: http://online.wsj.com/article/SB10001424052702303828304575180243952375172.html?mod=WSJ_hpp_sections_opinion

"The second way government assistance programs contribute to long-term unemployment is by providing an incentive, and the means, not to work. Each unemployed person has a 'reservation wage'—the minimum wage he or she insists on getting before accepting a job. Unemployment insurance and other social assistance programs increase [the] reservation wage, causing an unemployed person to remain unemployed longer." (NOTE: This opening statement was italicized in the article, therefore it is also italicized here.)

Any guess who wrote that? Milton Friedman, perhaps. Simon Legree? Sorry.

Full credit goes to Lawrence H. Summers, the current White House economic adviser, who wrote those sensible words in his chapter on "Unemployment" in the Concise Encyclopedia of Economics, first published in 1999.

Oops. "The one's" economic advisor stated that gov't assistance programs provide an incentive not to work. Granted, that's distilled down, but the full comment is above.

I ran into this once, years ago while I was working at K-Mart. I was talking in the electronics area of the store to another worker and his girlfriend and they were talking about going on welfare because they could make more that way.

Granted, hearing it here, this is third-hand information at best. But it did happen.

Let's jump to the end of the article, shall we?

" In any case, no one should be surprised that when you subsidize people for not working, more people will choose not to work. "

'Nuff said.