In today’s Daily Journal, John Hood does an excellent job at pointing out why extensions of unemployment insurance cause increased unemployment. But John seems to imply that except for those pesky extensions, coercive government run unemployment insurance is a good idea. Referring to the basic program John states “this reasonable idea can be taken too far.” First of all, John’s arguments regarding extensions are just as valid for the first 14 weeks. But more importantly such laws are immoral because they coercively interfere with the free contracting process between employer and employee. With this program in place it simply means that employees are coerced into taking a portion of their compensation in the form of unemployment insurance instead of higher wages or some other benefit. The program particularly hurts low skilled workers whose wages are fixed on the low end by the minimum wage. Unemployment insurance costs to employers simply raise the cost of hiring these workers. With no trade-off for lower wages possible, marginal workers are simply locked out of the labor market. The fact is that the unemployment insurance program never was a “reasonable idea.” It violates the right to freedom of contract and often hurts the very people it is supposed to help.