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

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.

 

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