Wonkblogger Brad Plumer teed up this question in response to the imminent expiration of the Emergency Unemployment Compensation program.
As I (and many others) have written, 1.3 million jobless workers will lose their federally-funded unemployment insurance benefits on December 28, unless Congress renews the program.
By a year from now, about 3.5 million more will have had no EUC to turn to when they’ve searched, without luck, for work longer than their regular state UI program covers.
House Speaker John Boehner has seized on the latest jobs report as a new reason to shrug off “calls for more emergency government ‘stimulus,’” understood by one and all as a reference to the EUC program.
House Minority Leader Nancy Pelosi has said that Democrats won’t vote for a budget deal without the EUC extension, though it wouldn’t have to be in the budget bill itself.
But as Washington Post blogger Greg Sargent observed, the Democrats might back down rather than vote against a bill that offers some sequestration relief. For most, that now seems a virtual certainty, as Pelosi’s response to the deal suggests.
Not to detract from the potential immediate crisis, but Plumer’s question raises a broader issue. What will long-term jobless workers do when their UI benefits expire, as they will for some even if Congress extends the EUC program.
As Plumer indicates in a followup post, we can be pretty certain that most of the workers who lose their UI benefits won’t try to use SSDI (Social Security Disability Insurance) as a safety net, notwithstanding debunked reports to the contrary.
They may just drop out of the labor force, Plumer says. Robert Oak at The Economic Populist reports that more than 3.1 million did over the course of the last year alone.
What happens to them then?
If they’re in their early 60s, like one of the “real people” ThinkProgress editor Bryce Covert profiles, they may apply for early Social Security retirement benefits.
They’ll receive less than they would if they waited until they reached full retirement age — and perhaps less than they received from the EUC program, as would be the case 62-year-old Covert interviewed. But they may have no choice, given the barriers older job-seekers face.
They’re a relatively small portion of the unemployed workers the Bureau of Labor Statistics counts, however. Uncounted, for all age groups, are those who haven’t recently looked for work. There are more than 5.6 million of them, according to the Economic Policy Institute’s latest estimate.
Surely some stopped looking when their UI benefits ran out. Not before, of course, because you’ve got to be actively looking to get them. Yet we know the job search gets increasingly futile.
Time was when there was some interest in the really long-term unemployed — the 99ers, so called because the combination of state and federal UI benefits provided 99 weeks of coverage in states with the highest unemployment rates.
Now they’re invisible, Daily Kos blogger Bud Meyers says. By and large, I think this is true.
But New York Times reporter Annie Lowrey recently told the painful story of a woman who’s now “broke and homeless” because she hasn’t been able to find any job at all since she was laid off from a mid-level position in 2008.
A veteran Lowrey also interviewed hasn’t had a job since he came back from Iraq in 2007. “I’m just trying to hang on until my retirement kicks in,” he says. But he’s only 57.
They run through research findings indicating a range of human costs, e.g., a higher male mortality rate (due partly to suicides), serious illnesses, divorces, an impact on what children in the family will ultimately earn.
A recent report by the Urban Institute and First Focus identifies a variety of harms to children that can account for the lower earnings — most, if not all of them related to family income loss.
To poverty, in fact, since the poverty rate for parents who’ve been unemployed for more than six months nearly triples, even when the value of safety net benefits is counted as income.
There’s no dearth of sensible ideas for what our government could do to address the long-term unemployment crisis. Baker and Hassett itemize a whole policy package.
I’ve seen many others. Most, if not all reflect a consensus on some measures, e.g., subsidized employment, direct government hiring, larger (and better) training programs.
All these would, of course, be good for the economy — more consumer spending, so more jobs created, even beyond those the government itself might fund. There’d thus be more tax revenues as well.
But it’s the “human disaster” flagged in the Baker-Hassett headline that concerns me here.
When people drop out of the labor force, they don’t drop off the face of the earth. Our failure to avert the damages so many have already suffered is, to my mind, a shame, since the single largest reason is our federal government’s short-sighted focus on reducing spending.
At the very least, Congress can act immediately to extend a lifeline to the long-term — but not longest-term — jobless workers who haven’t dropped out.
But it also ought to do something to help them — and the rest — find gainful work again.