Lots of Solutions to Long-Term Jobless Crisis. But Bipartisan?

June 30, 2014

A panel discussion hosted by the Congressional Full Employment Caucus took on the plight of long-term jobless workers. The big push — and push-back — as you undoubtedly know, has centered on the need to renew their federal unemployment benefits.

But even if — big if — Congress does renew them, long-term jobless workers will still face daunting challenges in the labor market.

These have everything to do with how long they’ve been unemployed — and virtually nothing to do with anything else.

A recent analysis by panelist Heidi Shierholz at the Economic Policy Institute found that long-term unemployment rates were considerably higher last year than in 2007 for every group — age, education level, race/ethnicity, gender, prior type of occupation and industry.

So “it’s not something wrong with the workers,” she said. And her fellow panelists agreed. Their main business, however, was to identify “proven bipartisan solutions to the crisis.”

I wish I could say that I came away believing that the ideas they teed up would, in fact, gain bipartisan support in Congress.

As panelist Judy Conti at the National Employment Law Project said, there is a bipartisan consensus on the problem to solve — not enough jobs for everybody who needs one.

But that’s about as far as it goes. Conti mentioned what are generally partisan splits over how job-creating measures should be paid for — by closing corporate tax loopholes, for example, or by cutting other federal spending.

The split, I think, goes deeper than that. We’ve got Republicans going on about the job-killing effects of the Affordable Care Act, other regulations that are strangling businesses, etc.

Democrats, on the other hand, talk of more federal investment — in infrastructure, education, clean energy and other cutting-edge technologies. They’d like to channel more money to state and local governments for police and firefighters.

They want to change provisions in the tax code that effectively subsidize the costs of off-shoring jobs, as well as others that enable corporations to significantly reduce — or altogether eliminate — their federal tax liabilities.

And, of course, they want long-term unemployment benefits renewed — not only because jobless workers and their families need them, but because they create and/or preserve jobs.

This is because people who receive the benefits generally perforce spend them on basic needs. So demand for goods and services rises. More demand translates into more jobs — and more jobs into more demand.

This, I take it, is the same basic premise underlying the call for more investments. It also underpins another solution Shierholz mentioned — action that would deter other countries from manipulating their currencies so as to make their exports cheaper and imports from the U.S. costlier.

What’s not altogether clear is whether more jobs would solve the long-term unemployment crisis, unless there were so many more employers needed to fill that they couldn’t continue to screen out applicants who’d been out of work for some time.

Happily, panelists also had some thoughts about how to level the playing field.

One already underway is somewhat similar to the subsidized employment programs most states created, using money from the now-expired TANF Emergency Contingency Fund that was part of the Recovery Act.

Two other solutions are already pending in Congress. An uphill battle there. One would prohibit employers from using credit checks as a screening tool. It’s not specifically for long-term jobless workers, but for obvious reasons, they’re more likely than others to fall behind on their bills.

The other would undo a Supreme Court ruling that makes it extraordinarily difficult for older workers to prove age discrimination — apparently a reason that so many who become jobless remain so.

Though I’ve referred to these solutions as leveling the playing field, the last two could also be viewed as preventive measures.

Another explicitly endorsed by two panelists (and a third who couldn’t participate) would also tend to prevent unemployment — and thus the risks of its becoming long term.

It’s commonly known as work sharing. And federal funds are temporarily available for states that adopt it — or modify their existing programs to comply with the Department of Labor’s standards.

Under work sharing, employers may reduce workers’ hours, with their consent, rather than lay them off when business is slow. What the workers lose in wages is partly made up for by unemployment benefits.

This is obviously better for workers than getting fired. And better for employers because they don’t lose experienced workers — and incur the costs of hiring and training when business picks up again.

Work sharing isn’t new, but we’ve been hearing more about it, thanks to the Great Recession — and ongoing labor market woes. It’s often cited as the reason Germany’s unemployment rate didn’t spike, though its economy was hard hit.

Even though our unemployment rate is inching down, there are still about 1.5 million layoffs a month, Shierholz told us. So work sharing could still save a lot of grief.

And it enjoys support from lead economists at the right-leaning American Enterprise Institute and the decidedly left-wing Center for Economic and Policy Research. Bipartisan in this respect, at least.

Lastly, Conti reminded us that jobless workers used to have to pick up their unemployment benefits checks. Office staff told them about suitable openings and sometimes helped them in other ways.

Such individualized, in-person services have dwindled — at least partly due to cuts in federal funding for the One Stop Career Centers.

A greater investment in these services would more than pay for itself, NELP says — in unemployment benefits saved, tax revenues collected and reduced social and human costs.

We see a glimmer of bipartisan support for more robust reemployment services in the new “bipartisan” bill to renew long-term unemployment benefits, as in the bill that recently died in the House.

Ultimately, I suppose, it all depends on what we mean by “bipartisan.” A number of the panelists’ solutions have — or could gain — support from some conservatives. But substantial support from both parties in Congress is a whole other matter.

 


Code Blue For TANF Emergency Contingency Fund

September 12, 2010

Back in March, I wrote about the need to extend the TANF Emergency Contingency Fund. It seemed at the time that the extension stood a good chance of passing as part of the then-latest version of the jobs/tax break extender bill — the American Jobs and Tax Loopholes Closing Act (H.R. 4213).

The House had twice passed an extension — once in March as part of the Small Business Jobs and Infrastructure Act (H.R. 4849) and again in May as part of H.R. 4213. But the small business bill is still hung up in the Senate. And the big jobs/tax break bill was ultimately whittled down to just a temporary extension of expanded unemployment benefits.

So here we are nearing the third week of September, with the Fund due to expire at the end of the month.

Republicans seem dead set against more stimulus spending. The Obama administration seems reluctant to step up to the plate, though Jared Bernstein, the Vice President’s Chief Economic Advisor, has blogged in support of an extension.

Hard to know whether the Democratic leadership in Congress will tee up the extension again or focus on high-stakes fights, e.g., the expiring Bush tax cuts, the energy/oil spill legislation, must-pass appropriations and maybe (given the egg recall) the long-pending bill to strengthen the federal food safety system.

Some of the major liberal research and advocacy organizations are trying to get the extension on the agenda — notably, CLASP, the Center on Budget and Policy Priorities and the Center for American Progress. But this is not a typical liberals versus conservatives issue.

Kevin Hassett, an economist at the quite conservative American Enterprise Institute, told the Senate Finance Committee that a major expansion of at least the subsidized employment provisions of the Fund would be a good idea, if focused “as much as possible” on private-sector jobs.

Beyond the Beltway, the bipartisan National Governors Association, National Conference of State Legislators and National Association of Counties have all come out in favor of an extension. Governor Haley Barbour of Mississippi, former Chairman of the Republican National Committee and now  Chairman of the Republican Governors Association, wants an extension too.

At least two West Coast nonprofits are drumming up grassroots support. One — Mission Neighborhood Centers — is a social services provider in San Francisco. The other — Internet Archives — offers free access to digitized books and other resources.

What’s brought these strange bedfellows together are the subsidized jobs programs that state and local agencies have created or expanded using Emergency Contingency Funds.

Those who follow this blog know that I’ve got serious reservations about the District’s use of these funds for its Summer Youth Employment Program. I’ve none at all about programs like San Francisco’s Jobs Now!, which has placed more than 3,600 unemployed and underemployed low-income parents in temporary jobs that build workplace skills and experience.

Or Mississippi’s STEPS, which also focuses on low-income parents and provides phased-out wage reimbursements intended to promote regular hires. Or Tennessee’s program, which has focused on a rural county where the unemployment rate shot up to 25% after an auto plant closed.

All-told, 36 states are operating subsidized jobs programs. A new CBPP brief indicates that they’ve placed more than 250,000 parents and teens.

Only four states will indefinitely continue their year-round programs at the current level if the Emergency Contingency Fund isn’t extended. Twelve will immediately terminate their programs, and three will continue operations only till their current funding runs out.

This will be bad for the many thousands of people who will be thrown out of work and for those who would be eligible for future placements. It will be bad for small businesses that have managed to stay afloat and, in some cases, expand because they’ve had subsidized workers. It will be bad for our economy as a whole, which, as we know, needs more consumer spending.

Close to home, the District could claim nearly $27.8 million if Congress passes the extension that’s been under consideration. It could use the funds for a broad range of purposes, including support and training for its TANF participants, homeless services for families and (dare one hope?) a robust, well-targeted subsidized jobs program.

So if you live outside the District, I urge you to sign my petition (a new one) in support of an extension of the Emergency Contingency Fund. And if you’re disenfranchised like me, please pass the word along.


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