Former George W. Bush administration economic official Keith Hennessey has a post looking at what he calls the "trade-off between the ladder and the safety net" on extended unemployment benefits, minimum wage, and ObamaCare:
The costs of all three of these policies include higher structural unemployment and fewer people building additional skills to move up the income scale over time. When the U.S. economy eventually recovers fully, our unemployment rate should be in the low 5s. Because they keep layering on "protections" and "assistance," France's comparable rate is around 10 percent. Imagine if the U.S. steady-state unemployment rate were 10 percent. We're not there yet, but all of President Obama's policies push us toward a European-style model.
I think movement in that direction is a huge mistake, but my point today is a more basic one. These trade-offs must be considered and debated openly, and the Obama Administration is doing a disservice by suggesting that no trade-offs exist, and that those who oppose these programs do so because they are mean. Extending unemployment insurance benefits, raising the minimum wage, and ObamaCare have long-term labor supply costs that must be weighed against their more immediate benefits. There is no free lunch here. Do you want a stronger ladder or a higher safety net?