A Happy New Year to You and Two Million Jobless Workers

January 2, 2013

Before I knew Jesse, I thought that New Year’s Day was mainly for recovering from hangovers — and for making resolutions. Nothing like a headache to make you resolve to lead a better life.

Now I know the day is also for eating greens (for money), black-eyed peas (for luck), some sort of pork (we’re not sure for what, though I’ve read it represents progress) and cornbread (for nothing, so far as I know, except that it goes well with the mandatory dishes).

I’ve made the usual resolutions — eat less, exercise more, etc. For the blog, I’ve resolved not to be so persistently gloomy and angry. Surely there’s some unequivocally good news to impart, even in these troublesome days.

I know from past experience that the new leaves I vow to turn over usually wilt before the crocuses sprout. But it’s surprisingly easy to begin the new year with a cheerful post.

Because more than two million jobless workers who were about to lose their unemployment insurance benefits will get them after all, thanks to the last-minute, barebones bill Congress passed to pull us back from the so-called fiscal cliff.

The workers, as you probably know, are those who’ve been actively looking for new jobs for more than 26 weeks — the period that most regular state UI programs will cover.

They’ve been getting federally-funded benefits under the Emergency Unemployment Compensation program that was originally part of the Recovery Act.

The last extension of the program kept it alive, though in shrunken form, through December.

So all those jobless workers faced a hard cut-off of their EUC benefits — this at a time when there are still more than three job seekers for every job available.

Another million or so workers would have had no UI benefits by April — and by the end of the year, about three-quarters of all jobless workers.

The belated, but welcome action by Congress will be good not only for many of these workers, but for our slowly recovering economy, which will surely need all the help it can get in the months to come.

As go-to economist Mark Zandi has testified, extending UI benefits will deliver a bigger bang-for-the-buck boost to the economy than virtually any other measure in the stimulus arsenal.

The Congressional Budget Office recently reported that the spending will save and/or create 300,000 jobs — or looked at another way, that 300,000 jobs would have been lost if Congress had refused to invest in EUC benefits.

But economists didn’t save the EUC program. We’ve got to give the President credit for insisting on the extension.

More credit, I think, is due to the advocacy organizations that kept the issue on the front burner — and to 134,000 of us in the grassroots who joined the effort.

This in itself is good news because it tends to suggest our voices matter — and, of course, in some cases our votes.

Worth recalling in the months ahead because we who care about poor, near-poor and about-to-be-poor people have our work cut out for us.

UPDATE: I should also have acknowledged the majority of Democrats in the Senate and the House Democrats who urged their colleagues to extend the UI benefits.


House GOP Has Radical Agenda For Unemployment Insurance

December 14, 2011

I guess you’ve read by now that the House Republican majority (with help from some Democrats) has passed a bill that would extend federal unemployment insurance benefits.

Sort of. Jobless workers couldn’t get them for as long as they can now. Nor could all jobless workers now eligible get them.

The benefits cuts have gotten the most attention. The other so-called reforms deserve more because they’d effectively change the very nature of unemployment insurance.

Perhaps this is all a not-to-worry.

The UI benefits provisions are bundled together with a bunch of other measures, including some that ensure the bill won’t become law — even if the Senate passed it, which it won’t.

Senate Majority Leader Harry Reid has pronounced it dead on arrival. “The wrong side of ridiculous,” he said, referring specifically to the UI changes.

This by no means ensures a clean extension. Reid doesn’t have enough Democrats to overcome a potential Republican filibuster threat. Many House Republicans would probably balk.

Yet Congress is in a hurry to wrap up business so members can go home for the holidays.

All but some of the diehard Tea Party types don’t want to face constituents who’ll lose their benefits — or their payroll tax cut, which the House bill would also extend.

So lots of hurried compromising may go on behind closed doors.

Here then are some thoughts on what might seem one of the less divisive UI reform provisions — a novel “participation in reemployment services” qualification.

At this point, states decide who should be eligible for UI benefits, though they’ve got some federal guidelines to follow. Rules relate strictly to immediate past and future legal employment.

The House bill establishes an unprecedented requirement based on the type of work an applicant could qualify for.

Specifically, no one could receive UI benefits unless he/she had a high school diploma or an equivalent like the GED or, if not, was “enrolled and making satisfactory progress in classes leading toward the satisfaction” of the minimum education requirement.

Jeff Carter, the Acting Director and President of the D.C. Learns, attacks this provision from several perspectives.

Briefly, he notes the large number of jobless workers who’d be affected — a goodly, though unknown number of the more than 1.5 million who are actively looking for work without the credential now. More, of course, as time goes on.

He then argues persuasively that the requirement will effectively deny unemployment benefits to a large percent of these workers. There are already long waiting lists for adult education classes, he says.

And like as not, many affected workers don’t have the basic literacy skills to do the work GED preparation classes require. Nor is it clear that those who do should be enrolled in these classes anyway, since there are other ways to get up to speed for the exams.

“Perhaps,” Jeff says, “it [the education provision] was a misguided attempt to provide an incentive to those lacking a high school diploma.”

I wouldn’t altogether rule this out. But we can make other inferences from the predicable results.

Perhaps, for example, the House Republicans hope to cut program costs by erecting new barriers to enrollment.

Whether or no, their bill suggests something more radical than that.

Basically, the education requirement would convert an insurance program to a welfare program — a source of cash assistance contingent on what the drafters seem to view as preparation for work.

Lest we doubt the intent here, the bill also authorizes drug tests for applicants — something state policymakers have already seized on to screen out applicants for public benefits.

And it denies UI benefits to millionaires — or so the Republicans say.

If I understand what the bill says correctly, it actually takes back all or some portion of the benefits paid to high-income taxpayers, including those filing jointly who had no taxable income of their own.

This is not, as it might seem, just a gesture to us 99%. And, as the Political Correction blog notes, it’s not really a cost-saving measure either.

Rather, the “millionaire” exclusion establishes a means test for unemployment compensation — another feature of public assistance programs.

All these welfare-like provisions are, to my mind, an entering wedge for further attacks on the UI program. Because what they say is that we’ve got waste in it — people getting benefits who don’t need or deserve them.

Once you start down that road, you end up … Well, I don’t know where. But with something that’s assuredly not the straightforward insurance program Congress created nearly 80 years ago.


More Than Half A Million Jobs Lost If Federal Unemployment Benefits Expire

December 1, 2011

I’m not acutely distressed by the fact that Super Committee members couldn’t cut a deal.

The Democrats had moved so far to the right that whatever deal got enough Republicans on board would probably have been worse than the automatic spending cuts the no-deal will trigger — assuming Congress lets them happen.

In one respect, however, the stalemate disappoints me.

I’d hoped that Democrats could wedge an extension of federally-funded unemployment benefits into a deal that could pass — just as President Obama got them extended as part of last December’s deal on the expiring Bush tax cuts.

Hope is the operative word here because the UI benefits extension had reportedly gotten tangled up in party-line differences based on a more fundamental consensus, i.e., the cost of the extension must be fully offset by savings elsewhere in the budget.

This incidentally marks a change from past precedent — and from the Democrats’ position as recently as last December.

In any event, we need a Plan B fast because the programs are due to expire at the end of the year.

So millions of jobless workers may soon find themselves with no cash income — 5,500 in the District of Columbia alone. And that’s only losses through early February.

Republicans balked at extending the programs last year. The situation is worse now because Congress as a whole is so riveted on the deficit. And extending the programs is, of course, not free.

But also not nearly as costly as what the federal government will spend to fund the programs. Nor nearly so costly as letting them die.

Costs in human terms should go without saying. We read story after story about the plight of jobless workers who’ve exhausted their UI benefits.

But the debate, of course, revolves around economic costs. So a bit of perspective on these.

The Congressional Budget Office estimates the cost of extending the UI programs for year at somewhat over $44 billion.

The Economic Policy Institute, however, argues that we need to factor in the jobs that will be created or saved because workers and their families spend most, if not all their benefits on basic needs — food, rent, gas for the car, clothes for the kids, etc.

Their spending supports jobs throughout the economy — in retail businesses, the companies that supply them, the companies that supply the suppliers and so forth.

So every$1 paid out in UI benefits delivers as much as $2.00 in economic boost.

Using a more conservative multiplier, EPI finds that the UI extensions will increase GDP, i.e., the total value of domestic economic activity, by $72 billion.*

This, it calculates, translates into 560,000 jobs created or saved.

The workers who hold those jobs pay federal taxes. They don’t depend — at least, not solely — on publicly-funded benefits.

EPI figures that the federal government would thus recoup $26.9 billion of what it would spend for the extra weeks of UI benefits — partly in tax revenues and partly in savings on safety net programs like food stamps and Medicaid.

Bottom line then is that, in real terms, the extensions would cost only $18.1 billion — far less than what the price tag seems to be.

Turn the story around. If Congress doesn’t extend the federal UI benefits programs, the economy will shed well over half a million more jobs. Our already sluggish GDP would lose a half-percent boost.

Economist Mark Zandi — a guru on such matters — puts the negative GDP impact a tad lower. Even so, he estimates the loss at $58 billion.

Makes the UI benefits extensions look like a good dollars-and-cents choice as well as a simple act of compassion.

* EPI uses a somewhat higher cost estimate than CBO because it assumes that Congress would adopt a technical fix to the so-called “look-back” provision in the Emergency Benefits law. Without it, states couldn’t get EB funds unless their unemployment rates had risen in the last two or three years.


More Than 2 Million Jobless Workers May Lose Unemployment Benefits Next Month

November 26, 2010

As you may recall, in late July, the Senate finally managed to pass the latest extension of the two related programs that fund expanded unemployment insurance benefits. Now the programs are again about to expire. And prospects for renewal are even more uncertain.

The prior extension got hung up because the Republicans insisted that it be paid for. But, of course, they wouldn’t have accepted a tax increase offset. We know this because they had no end of objections when a larger bill that included the UI benefits extension had a pay-for that would have closed a couple of costly tax loopholes.

During the stalemate, about 2.5 million jobless workers lost their UI benefits. These were restored retroactively, though at a reduced rate. A better thing than no extension at all. But what it meant was that the six-month extension actually funded future benefits for less than five months.

So here we are again, with expanded unemployment benefits due to expire on December 1. Congress reconvened for one post-election week, then went home for a longer Thanksgiving break than most of us enjoy. That leaves perhaps just one voting day before the benefits expire.

We can expect another donnybrook over the pay-for issue — maybe even over the principle of a further extension. There are, after all, some members of Congress — Senator Jon Kyl, for example — who maintain that UI benefits deter jobless workers from seeking employment.

So what will happen if Congress ends this session without approving another extension?

The National Employment Law Project reports that more than two million jobless workers will lose their benefits during the holiday season — about 800,000 of them on December 4. The number will swell to nearly five million in the next couple of months.

And go on swelling as more and more workers exhaust the benefits available through their regular state UI programs. In all but a few states, the maximum is 26 weeks.

As of October, jobless workers who were actively seeking employment had been looking for an average of nearly 40 weeks — nearly three and a half months more than most regular state UI benefits cover. Nearly 42% had been looking for more than 27 weeks.

And no wonder when, according to the Economic Policy Institute’s analysis of the latest U.S. Labor Department Job Openings and Labor Turnover Survey results, there are five job seekers for every job opening.

Here in the District, 8,017 jobless workers will lose their UI benefits before the end of December. More than 3,300 of them will be cut off immediately. The remainder will either lose some of the additional weeks they would have qualified for or exhaust their regular 26 weeks, with no federally-funded lifeline beyond.

Views across our borders are equally dismal. In Maryland, 13,915 jobless workers and their families may face the holidays with no source of income. In Virginia, the total facing a December cut-off is 30,871.

We can expect the Republicans — maybe some Democrats too — to argue that any extension of expanded UI benefits must be fully paid for because we can’t afford to add to the deficit.

Well, EPI estimates that extending the expanded UI benefits for a year will create the equivalent of 723,000 jobs. This because recipients will immediately spend most, if not all of what they get on basic necessities.

The result will be higher tax revenues and less spending on safety net programs. So, the analysts say, the actual cost of  a year-long extension would be only $25.9 billion, rather than the $65 billion “sticker price.”

A mere drop in the bucket compared to the unpaid-for $400 billion the federal government will lose in the next 10 years if the Bush-era tax cuts for the wealthiest 2% of Americans are permanently extended, as the Republicans insist they must be.

And the modest impact on the deficit would be only temporary, since no one’s saying the expanded UI benefits should continue indefinitely.

NELP, among others, is calling for an extension through 2011. This makes good policy sense because the unemployment rate will almost surely remain extraordinarly high. It makes even better political sense because another short-term extension will kick the issue into the opening days of the next Congress.

The new Republican House Majority Leader will want to prove he’s serious about rolling back most categories of discretionary spending to the pre-Recovery Act level. The strengthened Republican minority in the Senate will still be led by Senator Mitch McConnell, whose top priority is to make President Obama a one-term president.

The Republicans banked on voters blaming the President for their economic woes — and election results suggest they were right. Every reason to believe that at least those on the Senate side will pursue the same strategy going forward.

So those of you with voting representation in Congress need to make your voices heard loud and clear. I’ve got an editable online letter you can use.

And, as always, I ask that you pass the word along.


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