In "National Lampoon's Christmas Vacation," perennially jobless cousin Eddie shows up at Clark Griswold's home in an RV, ready for a free holiday feast and lots of presents.
When Clark (Chevy Chase) asks where Eddie (Randy Quaid) is working, Eddie's wife answers nowhere. "He's holding out for a management position," she explains.
That silly scene is the comedic version of what conservative economists say is happening in America's dreary job market today.
Even left-of-center thinkers like Peter Diamond, who shared the Nobel Prize in economics this week, appear to agree.
Explaining persistently high unemployment amid an increase in the number of job openings, Diamond's "friction" theory posits that more generous unemployment insurance benefits can spur higher levels of joblessness because more displaced workers can afford to spend more time looking for their elusive -- or illusory -- dream job.
Extended jobless insurance is one "friction" factor that keeps workers and employers apart, according to Diamond and fellow laureates Dale Mortensen and Christopher Pissarides.
Other friction points include employees' unwillingness to relocate for new work and companies' hesitation to train new hires.
Though the struggling U.S. economy is still creating a net average of some 65,000 jobs per month, jobless rates remain stubbornly high.
Conservative economists at the Washington, D.C.-based Heritage Foundation argue that repeated extensions of unemployment insurance can exacerbate the situation.
"In a world with no unemployment benefits, workers would be more willing to accept any job," says Ed Sherk, a senior economist for labor. "I'm not advocating that, but the fact is people spend more time looking for work when benefits are about to run out. This is not a disputed point."
Sherk, who praised the Nobel committee's selection of Diamond, an MIT professor, acknowledged that businesses can be choosy in a time of high unemployment. "Obviously, not all workers are the same," he notes.
But as employers and prospective employees look for the best fit, an ongoing renewal of unemployment benefits -- now set at 99 weeks -- can harm workers in the long run, Sherk argues.
"You have to look at the nature of the job losses -- housing construction and manufacturing make up almost 50 percent of the net losses," Sherk notes. "Since neither of those sectors is likely to come back anytime soon, workers will need to find work elsewhere. But longer-term (unemployment) benefits encourage them to seek work in those same old areas. Meantime, their skills deteriorate and their market power decreases."
Sen. George LeMieux, R-Fla., was criticized by Democrats during the last day before the congressional recess for leading Republican opposition to another extension in federal jobless benefits.
Conservative economists say there must be limits. Or, to use Diamond's term, "friction" must be reduced.
Diamond, who has been nominated to the Federal Reserve Board by President Barack Obama and is awaiting Senate confirmation, modifies his "friction" theory by noting that a longer job search can sometimes result in a better fit for an employee and employer.
In a paper he wrote in the early 1980s, Diamond stated, "(Workers) become more selective in the jobs they accept" because of unemployment aid. That, he said, made for better matches and increased efficiency.
Sherk countered that the "better match" theory has limits, too.
"The evidence is mixed. It's not like there's 10 to 15 percent more in earnings. It's a relatively small effect," he reports.
By way of advice, Sherk offers, "It's not a good use of workers' time to keep looking for construction jobs in Florida. You need to be moving and looking at other sectors."
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341 begin_of_the_skype_highlighting(772) 801-5341end_of_the_skype_highlighting.
