Why Homeless People Aren’t Working … Or Working And Homeless Anyway

November 21, 2011

The tool I use to produce this blog provides some interesting stats — among them, my most-viewed posts. I note, with interest, that an old post makes the top-viewed list almost every week.

It’s entitled “Why Don’t Homeless People Just Get a Job?” Are people actually asking this, I wonder.

At the time I wrote, the recession was in full swing. Now it’s officially 29 months behind us. Yet we’re facing a big jobs crisis.

Not Enough Jobs

The unemployment rate is higher — stuck at about 9%. The number of jobless people actively looking has increased from 13.2 million to nearly 13.9 million.

And the economy has shed about 1.3 million more jobs. It would need to create more than 11 million to bring the unemployment rate back down to when the recession set in.

So one reason homeless people don’t get jobs is the same as the reason millions of housed people don’t. There just aren’t enough jobs out there.

But, of course, it’s not that simple.

Challenges to Getting the Jobs Out There

The very fact of homelessness makes work searches more challenging. Blogger Steve Samra — the source for my original post — speaks from first-hand experience about these.

But, as with the current job shortage, the biggest challenges, I think, aren’t unique to homeless people. They have to do with the reason people are homeless to begin with, i.e., not enough income to pay for a roof over their heads.

For some, there are barriers to gaining — and maintaining — employment of any kind. These include mental and physical health problems, substance abuse and other severe disabilities.

For those not too disabled to work, finding a job and then going to it may cost more than they can pay.

There are up-front and ongoing transportation costs. For some, also formidable child care costs and/or the also formidable costs of home care services for disabled family members who can’t get them through Medicaid.

And then there’s the big issue of job requirements.

Many communities have passed laws to clear homeless people off the streets — possibly away altogether. So homeless job seekers may have criminal records for loitering, storing belongings on public property, etc.

The National Employment Law Project reports that many employers are running criminal background checks to screen out applicants — even for entry-level jobs that involve negligible security risks. Others post job announcements that pre-screen.

And now applicants are being screened out because of bad credit records — an ironic Catch-22 for people who are trying to get work that will enable them to pay their bills.

Last but certainly not least is the issue of education credentials.

The monthly Bureau of Labor Statistics reports consistently show the highest unemployment rates for adult job seekers with less than a high school diploma or GED. Rates drop at each education level — down to a current 4.4% for those with a bachelors degree or higher.

We read that college graduates are accepting jobs as wait staff, truck drivers, sales clerks and the like. That’s tough competition for those who traditionally fill these jobs.

Working, But Still Homeless

Yet some fraction of homeless people are working. No national figure. So a little back-of-the-envelope from my hometown.

According to last January’s homeless count, 38% of homeless adults in families and 20% of single adults in the Washington, D.C. metro area were working.

No way of knowing how many of them were working full time or at what. We do know, however, that a full-time minimum wage job in the District, where the hourly rate is $1 higher than the federal minimum, would yield an annual take-home income of a little under $16,440.*

Rent on a modest one-bedroom apartment, including basic utilities would leave the worker with about $44.00 per month for all other expenses — less than the costs of bus fare to and home from a five-day a week job.

In short, we’ve got a complex of policy issues here — jobs, income supports, anti-homelessness laws, hiring practices, education, affordable housing and a minimum wage that’s worth less than it was 40 years ago.

There, Googlers. Aren’t you glad you asked? I am.

* This reflects deductions for Social Security and Medicare payroll taxes at the current reduced rate, but not what might be withheld for income taxes.

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Shocking New Jobless Figures, But No Impact On Deficit Talks

July 12, 2011

As you’ve probably read by now, the latest figures from the Bureau of Labor Statistics show that job growth has all but stalled.

Economists express shock and dismay. But the President and his Republican counterparts in the deficit reduction/debt ceiling talks take it all in stride.

Brief review of what might — but apparently isn’t — shifting their vision from a potential faraway deficit crisis to the crisis we’ve got right now.

Private-sector employers added only 57,000 new jobs last month. The public sector shed another 39,000, leaving total new jobs at only 18,000.

This is a small fraction of what’s needed just to keep up with population growth, let alone make up for the 8.8 million jobs lost since the recession began.

Bad news wasn’t only for June job growth. The BLS report also revised the already-anemic new job figures for May downward by nearly half.

So what many economists thought might be a blip in this year’s growth trend actually heralded what could be something approaching stagnation.

More evidence for this. Average work hours per week dropped a bit, as did average hourly earnings. Employment by temporary help services firms edged downward. These are all, we’re told, indicators that employers, as a whole, aren’t about to start hiring.

The number of unemployed people who were actively looking for work increased to 14.1 million. An additional 982,000 had looked within the last year but given up because they decided that searching was futile.

Nearly 6.3 million of the actively looking had been unemployed for at least 27 weeks — many undoubtedly much longer. This is slightly higher than the figure for May and 450,000 higher than for April.

Some of these long-term jobless people are still getting unemployment benefits, thanks to two related federal programs. One will expire at the end of the year. The other will become irrelevant unless Congress changes the rules.

Workers can qualify only when they’ve exhausted their regular state unemployment benefits. So anyone who loses a job now will get, at most, 26 weeks. As I wrote earlier, some states have cut their programs back to less than that.

So we’ve got an economy that’s growing slowly. Employers who aren’t hiring mainly because they can meet demand with the workers they’ve got.

More than 22.5 million people who are officially unemployed or under-employed, plus about 3.9 million who haven’t looked recently enough to get counted.

About a third of the 22.5 million are getting unemployment benefits, which typically replace only about a third of lost wage income. Well over 2 million can’t get them any more. A large unreported number never could.

We could have scripted the Republicans’ response to all this. House Majority Leader John Boehner says they’re “focused on jobs, and are ready to stop Washington from spending money it doesn’t have.”

Blames stimulus spending, excessive regulations and “an overwhelming national debt” for holding back private-sector job creation.

What about the President?

Well, he’s jawboning Congress to extend the 2% employee payroll tax cut that was part of the December Bush tax cuts deal.

But not to extend the federal add-on to states’ unemployment benefits programs, even though it would deliver a big bang-for-the-buck boost to the economy.

He’s also urging approval of some foreign trade agreements, a streamlined patent process and some unspecified investments to rebuild our infrastructure.

But not any investments to halt the huge job cuts in state and local government programs. Well over half a million since August 2008. And no sign of a letup.

Mostly, however, the President is focusing on a deficit reduction plan that will “get the government living within its means.”

Everything we read tells us it will be mostly — if not exclusively — about spending cuts. It would be more about spending cuts than revenue raisers even if the President got the balance he wants. Not likely.

Bottom line is that we’ve got new evidence of a jobs crisis that’s bigger and more persistent than anyone predicted. Yet the President and the Republican leadership are still focused on a deal that will pull billions more out of the economy.

“Like planning a picnic after Pearl Harbor,” tweets Dean Baker from the Center for Economic and Policy Research.


Employer Tax Holiday Won’t Jump Start Hiring

June 25, 2011

The White House seems well aware that the upcoming Presidential election will pivot on the economy — and more specifically, the unemployment rate. Prospects for a spontaneous burst of growth are too dim to see with the naked eye.

But the President and his people are understandably wary of proposing anything that could be labeled stimulus spending.

Facts notwithstanding, the Republicans seem to have convinced a majority of Americans that the economic recovery act failed. Also that Congress must cut federal spending now to begin dealing with the deficit.

But tax cuts are good, right? At least so long as they benefit us.

Republicans continue to insist that cutting businesses taxes will create jobs — though we need big cuts in spending and regulations too.

For his part, the President seems eager to prove that he’s listening to business leaders, who, of course, would like lower taxes.

Not so eager, however, as to support another “tax holiday” that would let multi-national corporations bring foreign earnings home at a drastically lower rate. Or at least, say Treasury officials, not unless the giveaway is part of a broader tax reform package. In short, not right now.

But what about giving businesses a temporary reprieve from payroll taxes? They’d like it. Congressional Republicans should like. They sure used to, though they’re reportedly iffy now.

Best of all, it can be cited to show that the President has done something about the jobs crisis.

I’m no economist. But when I read about the payroll tax holiday, I said to myself, it’s not going to get businesses hiring people they wouldn’t have hired anyway.

Businesses aren’t holding back on new hires because they feel they can’t afford the additional 7.65% they’d have to pay on top of the wages.

They’re not hiring because their current workforce is sufficient — if not more than sufficient — to meet the demand for their products and services.

Corporations are sitting on a pile of dough. If they wanted to hire here in the U.S., they would. Small businesses — those putative engines of job growth — are shrinking their payrolls. And a short-term nick in labor costs won’t stop them — let alone get them hiring again.

“I hire workers to do jobs,” says the president of a North Carolina graphics firm. “If we don’t have the work coming in, nothing will make me hire another worker.”

In any event, businesses are adding jobs, though at a pretty sluggish pace. The unemployment rate isn’t budging because state and local governments are still shedding jobs — another 30,000 in the month of May.

A payroll tax holiday won’t save one of them. Another round of fiscal aid to the states could. But a proposal for that would be DOA in Congress.

The Atlantic‘s Daniel Inviglio has some other ideas. Maybe a couple of these would fly. Maybe they’d step up hiring a bit.

But the Economic Policy Institute tells us that the economy would have to create 11 million jobs for the unemployment rate to settle back to its pre-recession rate.

This figure keeps growing as the labor market fails to make up for the many millions of jobs lost and add enough to keep up with the increasing number of youth who’ve become old enough for full-time work.

Those who don’t get jobs soon are likely to face years of lower earnings and future unemployment. And they generally don’t have much by way of safety net supports to tide them over while they’re looking.

People at the other end of the working-age range may be left on the sidelines, even if jobs proliferate faster than anyone expects.

So we’ve got a complex policy problem that I don’t think anyone in Washington wants to confront. It’s bigger than how to create a whole lot more jobs quickly. Bigger than how to rapidly retrofit workers whose jobs aren’t coming back.

I don’t have the glimmer of an answer. But I’m sure as can be that an employer payroll tax holiday isn’t it.

Also sure as can be that the President’s in trouble if he doesn’t come out with a plan that gives us some hope we can believe in.


President Opts for Business Tax Breaks Over Near-Term Job Creation

September 17, 2010

Far be it from me to say that the President shouldn’t do what he can to protect the endangered Democratic majorities in Congress. But the sop he’s offered to win support from the “business community” and its allies isn’t the sort of thing I’d hoped for from someone who only recently said that jobs aren’t “being created as fast as they need to be.”

I’m talking, of course, about the President’s new business tax cut proposals.

One of them would make the research and development tax credit permanent and the “simplified” option for claiming it more profitable. Washington Post blogger Ezra Klein reports that the latter change would increase the credit from 14% to 17%. Price tag about $100 billion over 10 years.

The other proposal would allow businesses to write off the entire costs of new equipment purchases through 2011. This would extend and expand a small business expensing provision that was originally part of the Bush administration’s Economic Stimulus Act. The write-off would be doubled and available to all businesses, including the largest corporations. Price tag about $30 billion over 10 years.

Now, it could make sense to put a permanent R&D credit in place. Congress has extended the “temporary” credit ever since it was enacted. No reason to believe it wouldn’t do so again. In the long run, the permanent extension would thus cost no more than a series of periodic extensions.

But it won’t do much for the vast majority of small businesses — those putative incubators of most new jobs. When the General Accountability Office last looked at the credit, it found that corporations with annual receipts over $1 billion claimed more than half of the total.

True, small start-up companies may also claim the credit, but only if they’re already turning a profit, paying taxes and able to afford the relatively high costs of documentation. Not the next Google being developed in someone’s garage. Not your typical mom and pop store either.

Nor, I think, will the R&D extension produce game-changing breakthroughs that wouldn’t have been developed any way. After all, companies invest in research and development because they think the results will ultimately generate significant products. They’re not going to give it up just because they can’t offset part of the costs with a credit — let alone because they’re not sure they’ll have the credit for years to come.

Let’s look at the credit from another angle. Perhaps the President’s proposal would bring some R&D jobs back home since only expenses for R&D conducted in the U.S. can be claimed.

Klein’s interviewee — the far-from-disinterested president of the Information Technology and Innovation Foundation — says that U.S. companies have expanded their R&D expenditures, but in other countries, e.g., China and Taiwan. No clear evidence that this choice was affected by any uncertainty about the credit or its limited value — quite the contrary.

So not many new jobs for Americans any time soon. And very few if any created will be opportunities for the workers hit hardest by the recession — those with no more than a high school diploma.

Maybe more jobs some day if some companies develop products that generate significant expansion and don’t outsource production, sales and other work. But that latter is a big if.

What about the equipment purchase write-off? We’re given to understand that corporations are sitting on a vast amount of cash. Will the opportunity to write off expenditures faster get them to spend it now?

As Howard Gleckman at the Tax Policy Center observes, “today’s economic malaise is caused largely by a lack of consumer demand.” Companies that foresee a near-term uptick they can’t manage with their existing equipment will buy more, with or without the extra incentive. Companies that don’t won’t.

But just say for the sake of argument that some companies decide to shift equipment purchases forward. Will that create jobs for American workers? Unless I’m missing something, the equipment doesn’t have to be manufactured in the U.S. Could this be a nice stimulus for, say, China or India?

Former Labor Secretary Robert Reich looks at the longer-term impacts. Big corporations, he says, like the tax break for equipment purchases because they’re investing in automation to permanently reduce the need for workers. Insofar as the more generous provision worked, it would be subsidizing more job cuts — and not, I suspect, in big companies only.

Granted, the business tax breaks are a political strategy aimed at boxing Republicans into a corner and/or co-opting the small business argument against letting the top income tax brackets revert to their pre-Bush levels.

But they’re part of a larger picture. According to the White House blog, the President’s vision for America is “a place where we don’t just think about today; we think about tomorrow…. Where we lead the world in the things we make and sell, not just in the things we consume.”

Seems to me he’s not thinking enough about today — that he’s fixed his eyes on the future because he doesn’t have the gumption to do battle for measures that would tackle the jobs crisis we face right now.

He’d probably lose, but not in the minds and hearts of jobless and other anxious voters. And the odds aren’t much better for his latest “stimulus” initiatives any way.


House Jobs/Tax Bill Spells Trouble

May 30, 2010

As many of you probably know by now, the House passed the latest version of the jobs/tax cut extender bill just before it broke for the Memorial Day recess.

The Senate had already packed up. So, once again, jobless workers dependent on expanded unemployment benefits will, at least temporarily, be without checks.

But that’s hardly  the worst of it. The bill that passed had suffered several surgical excisions to satisfy the requisite number of deficit-obsessed Blue Dog Democrats.

First, a month was lopped off the UI benefit and COBRA health insurance subsidy extensions. Blue Dogs still hung back. So the COBRA subsidy extension was dropped altogether, along with the extension of the enhanced federal match for state Medicaid programs (FMAP).

I don’t know whether I’m more angry, frustrated or alarmed.

I’m angry about the values the package reflects. The price tag on the bill didn’t have to be reduced by tossing out the COBRA subsidy and FMAP extensions. Lead Democrats could have pared back those tax break extensions–if what Blue Dogs wanted was a smaller bill.

Do we really care more about helping NASCAR race tracks, restaurants and rum producers or about making sure that jobless workers and their families can afford health insurance? Didn’t we just go through the agonies of health care reform to make benefits affordable for more low-income people?

I’m frustrated because anyone concerned about the short-term deficit ought to know that it results from depressed tax revenues as well as spending, including the financing of two costly wars.

The American Institute for Economic Research reports that April 2010 federal tax collections were the lowest for which it could find monthly data. Individual income tax revenues down 44% since just last year. Corporate income taxes down 64%.

It doesn’t take an advanced degree in economics to know that unemployed people typically don’t owe much, if any income tax. Also that they cut back on spending, thus depressing business revenues. They apply for benefits, including entitlements like food stamps. Up goes federal spending.

So how does the House leadership placate some of the deficit hawks? It takes out of the bill further urgently-needed fiscal aid to the states.

Virtually every state has already cut way back on spending to balance its budget. The cuts have imposed pressures on local governments, which were already struggling with their own budget shortfalls. So they’ve reduced spending too–or soon will.

In March, the Center on Budget and Policy Priorities reported that state and local governments have eliminated 192,000 public sectors jobs since last August. They’ve also undoubtedly cut spending on contracts for goods and services. More job losses there.

We’ll see still more job losses in the months to come–an estimated 275,000 in education alone. The ripple effect of these could result in the loss of an additional 82,000 jobs.

But job losses thus far have been somewhat mitigated by FMAP, which has helped states cope with their rising Medicaid rolls and freed up funds for other core programs.

Without an extension, FMAP will expire at the end of the year–halfway through most states’ fiscal years. Both the House and Senate earlier passed FMAP extensions to carry states through their entire fiscal years. So many states budgeted on the assumption they’d have the funds.

Now, as the CBPP’s President says, Congress “may pull the rug out from under them.” As many as 900,000 more jobs are at risk.

Set aside for a moment the human costs–something clearly not top-of-mind for a number of House members. Does saving $24 billion on a six-month FMAP extension make any sense from a deficit control perspective? Sure looks like penny wise, pound foolish to me.

I’m alarmed because the House bill seems a foretaste of things to come. The Senate, after all, needs 60 votes to pass even what got through the House. Over there, the top-ranking Republican on the Budget Committee has already said that we must stop extending unemployment benefits “right now.”

Consider too that emergency funding to avert the impending teacher layoffs has stalled–maybe died–because neither the House nor the Senate sponsor could round up the votes.

What more can we expect as Congress dives into the Fiscal Year 2011 budget? I shudder to think.


Will Deficit Reduction Trump Investments In Economic Recovery?

May 19, 2010

It seems that conservatives have scored a big win. They’ve got the federal deficit in the bull’s eye. The debt we’re supposedly leaving to our children has become the unimpeachable reason for curtailing, if not altogether ditching, further investments to cushion the impacts of this prolonged recession and jump-start growth in the labor market.

Consider that Congress still hasn’t extended the expanded unemployment benefits and COBRA subsidies created by the economic recovery act beyond early June.

Nor has it acted on the looming crises resulting from the shortfalls in state and local budgets. The House is scheduled to vote on an extension of the enhanced federal match for state Medicaid programs tomorrow, but the outcome is uncertain because Members are queasy about the cost. This  is also the case with key provisions in Congressman George Miller’s Local Jobs for America bill.

The Center on Budget and Policy Priorities reports that at least 45 states and the District of Columbia have cut back spending in core areas like public health, elementary and secondary education and services for elderly and disabled people.

Virtually all these will cause further job losses–not only in the programs themselves, but in businesses that supply the programs with goods and services. Thirty states and the District have also instituted hiring freezes and/or layoffs in their own workforces.

All these and a host of other cuts will feed a vicious cycle. More unemployed people exerting pressures on the safety net, spending less and, of course, paying less in taxes. Perhaps, in fact, eligible for more in refundable tax credits than they pay into the states’ coffers. Retailers buying less from their suppliers, and all of them paying less in taxes too.

But, we’re told, the federal government has to address the rising deficit and related level of federal debt. No doubt about that. If we just keep on keepin’ on, spending will outpace revenues, even after the economy fully recovers.

So we’ll borrow more. The Congressional Budget Office says that the ratio of federal debt to the nation’s gross domestic product (the total value of all goods and services produced) will rise from somewhat below 60% during the coming decade to 79% by 2035. Looking ahead to 2050, CBPP projects a debt level in excess of 300% of GDP.

The consensus view is that sustained high levels of government borrowing drive up inflation and interest rates, making borrowing more expensive for individuals and businesses, as well as the government itself. And revenues that could otherwise be spent on domestic investments must be diverted to paying interest on the debt.

Economic growth slows. And ultimately, some say, investors will lose confidence and shift their funds out of investments based on the U.S. dollar. Today Greece. Tomorrow America.

But that tomorrow is a hypothetical long way off. Right now, we’ve got a jobs crisis and a lot of collateral damage. So it’s very disturbing to see concerns about the long-term, structural deficit override concerns about the here and now.

In February, Lawrence Mishel, president of the left-leaning Economic Policy Institute, and David Walker, CEO of the fiscally-conservative Peterson Foundation, co-authored an answer to the President’s quandary on the deficit. Address jobs now and the deficit later, they said.

CBPP seems to come from the same place. It recommends that Congress allow the 2001/3 tax cuts for high-income filers to expire and, in the short term, use the revenues generated to fund policies that will stimulate economic growth and job creation.

But any proposed tax increases, even those that would affect only the top 2% of the wealthiest households, stir up a maelstrom of opposition–as, in fact, has the President’s entire Fiscal Year 2011 budget, notwithstanding its selective freeze on discretionary domestic spending.

Perhaps the President’s new fiscal commission will come up with a balanced plan to control the long-term deficit. But the need for that shouldn’t be used to block spending needed now to keep the devastating impacts of this recession from getting worse.


Big Job Creation Plans Fit the Crisis, But Not the Agenda

January 26, 2010

Everyone who’s in touch with the world knows we’ve got a jobs crisis and that it’s likely to continue for some considerable time.

Just about everyone thinks the federal government should do something about it. Needless to say, there are wide differences of opinion on what. The Republican leadership says that the answer is to cut back on taxes, spending and regulations.

Progressives say, on the contrary, that the government needs to plow more money into the economy–that if it doesn’t invest in job creation, the economy will leave lasting scars on the economic prospects for individuals and our economy as a whole.

They also recognize that the recession has exposed long-standing systemic problems that have depressed real income growth among a large sector of workers and left others on the sidelines, relegated to low-wage, no-benefit, often part-time jobs or out of the labor market altogether.

Some major organizations have come out with job creation plans that will put people back to work quickly and, at the same time, help the jobless keep the wolf from the door.

The Coalition on Human Needs has a set of job creation principles. The National Council of La Raza has recommendations reflecting Latino principles for job creation. The Economic Policy Institute has a detailed five-point plan. The AFL-CIO has one also.

These are all very similar in spirit and the last two in substance. They are reflected in yet another job creation plan issued by Jobs for America Now–a coalition the organizations helped launch.

The coalition, now more than 150 organizations strong, calls on the administration and Congress to:

  • Provide relief through continued and expanded unemployment benefits, COBRA and SNAP (the food stamps program).
  • Extend substantial fiscal relief to state and local governments.
  • Create jobs that put people to work helping communities meet pressing needs, including distressed communities that face severe unemployment.
  • Invest in infrastructure improvements in schools, transportation and energy efficiency, thus providing jobs in the short run and productivity enhancements in the longer run.
  • Spur private-sector job growth through innovative incentives and providing credit to small and medium-sized businesses.

There’s no price tag on all this. However, EPI estimated that its plan would entail roughly $400 billion in investments during the first year. About $160 billion of this would be recouped in higher tax revenues and lower safety net costs.

To pay for the rest, EPI recommends a financial transactions tax, i.e., a small tax that would be imposed whenever stocks and possibly other financial assets changed hands.  The tax would kick in two years from now, when presumably the economy will have fully recovered.

But first the deficit would grow. Does President Obama have the stomach for this?

Much appears to depend on how his strategists read the mood of the public–and more particularly, the upset in Massachusetts. Thus far, the prospects don’t look good.

We hear the President talking about doing a better job of explaining his agenda to the people. He mentions health care, energy, education, financial regulatory reform and the deficit.

Not a hint that “the anger and frustration that people are feeling” stems from our justified dismay about the jobs crisis–and the fact that it’s still nowhere on that must-do agenda.