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.


Small Victory For Jobless Workers

July 26, 2010

As you all know by now, Carte Goodwin, temporary replacement for the late Senator Byrd, arrived last Tuesday past the nick of time to break the Republican’s filibuster of the latest extension of unemployment insurance benefits. The House swiftly passed the bill. The President signed it. And the Senate moved on to other stalemates.

The UI extension bill provides immediate relief for about 2.5 million jobless workers whose extended benefits were cut off when the authorizing legislation expired. Extended benefits will also be available to other workers who exhaust their regular state benefits before the end of November.

They’ll get somewhere between 34 and 73 weeks of additional benefits, depending on how high their state’s unemployment rate is. Here in the District, with a current unemployment rate of 10%, eligible jobless workers will be able to get a total of 99 weeks of benefits.

I wish I could just rejoice in the hard-won victory. But I can’t help pondering the relatively small impact the bill will have on what promise to be long-term hardships for a vast number of jobless workers and their families.

Several major issues here.

First off, all jobless workers will get $25 a week less than they would have under all but the latest versions of was once a modest, but broader effort to deal with the jobs situation.

This will bring the average weekly benefit down to $284 — less than what’s needed to lift a family of three above the federal poverty line. So jobless workers may have benefits, but we’re still likely to have more families facing utility cutoffs, evictions, etc.

Second, we’re told that only about two-thirds of the 14.6 million people who are officially unemployed are getting unemployment benefits. “Officially” here means that they’ve got no job whatever and are actively looking for one.

At least some portion of the remaining third didn’t earn enough and/or work enough recently enough to qualify. The 1.2 million people who’d looked but given up aren’t getting unemployment benefits either.

Third, the extension will do nothing for workers who’d already exhausted their maximum benefits — the so-called 99ers. Blogger Jackie Headapohl says that economists estimate their number at around 1 million. Also says it’s expected to double or even triple in the months to come.

Received wisdom seems to be that the longer you’ve been out of work, the longer you’ll be out of work. Various reasons floated for this. One, which is bad news even for a lot of recently laid-off people, is that employers have eliminated certain types of positions, e.g., secretaries, travel agents, auto workers.

These jobs have been automated, outsourced or foisted off on other employees. Even a full economic recovery won’t bring them back.

This may be a particular problem for older workers who don’t have the time and resources to retool. Even if they do, they’re likely to face out-and-out age discrimination. Also some biases that amount to the same thing.

Employers may be ready to hire young workers with little or no relevant job experience. But as a commenter on the Poverty in America blog said, “a 57 year old with no experience in a new field isn’t exactly in demand.”

What are these workers to do until they’re old enough to qualify for Social Security benefits that will barely cover their living expenses, if that? By then, many will probably have tapped their shrunken retirement savings.

We can expect the Democrats to mount yet another effort to extend the extra tiers of unemployment benefits some time before the end of November. But, as Washington Post blogger Ezra Klein says, the latest vote in the Senate shows that any further extension will have to be offset — and may not pass even if it is.

Back in May, Senator Charles Schumer (D-NY) pledged to “work with [his] colleagues to create a fifth tier of benefits,” i.e., some unspecified number of weeks beyond the current 99-week maximum. Colleague and influential Finance Committee Chairman Max Baucus (D-MT) has already turned thumbs down on this.

Over on the House side, Speaker Nancy Pelosi (D-CA) has thus for remained technically neutral. At the end of November, she says, “we’ll take up something,” but it will have to satisfy members “from low unemployment areas [who] are very concerned about the deficit.” Odds are Senate Majority Leader Harry Reid (D-NV) will adopt the same calculus and that both will limit their efforts to the existing tiers.

But even repeated extensions of unemployment benefits, with still another tier for at least some long-time jobless people wouldn’t resolve the underlying problem.

The labor market has shed 7.5 million jobs since the recession began. Heidi Shierholz at the Economic Policy Institute says it would need to add about 325,000 jobs every month for the next four years to bring the unemployment rate back down to its pre-recession level. Haven’t seen anyone projecting anything remotely approaching this.

Will Congress rise to the challenges of what promises to be a prolonged jobs crisis, with even longer-term damage to human lives? If past is prologue, the answer is a resounding NO, even if the Democrats do better in November than the prognosticators expect.

What’s worse, it’s hard to know what Congress could do to put such a large number of unemployed people back to work, while at the same time ensuring that new entrants to the job market find work too.

Which is not to say it should wash its hands of the problem. Every job it could save or create would mean at least one less person on the brink of desperation — or over the edge.

Poverty and the Race Factor

June 17, 2009

Several recent reports call attention to something we all know but perhaps don’t talk about as much as we should. Poverty is not an equal opportunity condition.

No matter what measure you look at, racial minorities (except for Asian-Americans) rank well below whites. Blacks, along with Native Americans, generally fare worst. Here are a few of the many examples in the Applied Research Center’s new report on race and the recession:

  • In March 2009, the unemployment rate for blacks was 13.3%, as compared to 7.9% for whites. (Figures for May are 14.9% versus 8.6%.)
  • In all but 4 of the past 15 years, the rate of blacks who were under-employed, i.e., employed part-time though they wanted full-time work or unemployed but no longer looking for a job, was twice the rate for whites.
  • The recent median weekly earning for blacks was $577, as compared to $785 for whites.

It’s conventional to attribute these gaps to ongoing race discrimination. And that’s certainly a factor. For example:

  • The ARC report shows that blacks without a high school diploma earn 76 cents for every dollar whites without the diploma earn. For those with an advanced degree, the gap is just 1 cent less.
  • A study out of Princeton found that blacks without a criminal record were less likely to be called back after a job interview than whites with a criminal record.

But the root causes of the inequities are more complex than persistent race discrimination. A new book by sociologist William Julius Wilson signals his view in its title–More Than Just Race.

Wilson argues that inner-city blacks are poor due a combination of systemic causes–principally the legacy of past discrimination and changes in our economy that have significantly reduced living-wage job opportunities for people without more than a high school education.

An issue brief by the Center for Economic and Policy research adds more factors:

  • The share of manufacturing jobs held by blacks has steadily declined–from 23.9% in 1979 to 9.8% in 2007.
  • For this and perhaps other reasons, their union membership has dropped from 31.7% in 1983 to 15.7% in 2007.

Add to all these the fact that black males are significantly more likely than white males to be incarcerated–and thus to have a major strike against them when they later try to get a job. A new report by the Center for American progress puts the black/white incarceration ratio at 7/1.

A pre-recession report by the DC Fiscal Policy Institute documented the large and growing race gap here in Washington, D.C.

  • In 2006, blacks were 5 times more likely to be unemployed than whites–the greatest disparity since the mid-1980’s.
  • Only 51% of blacks were working, as compared to 62% in 1988.
  • The median income for black households was slightly lower than in 1980, while the median income for white households had increased 68%.

Lack of postsecondary education was–and still is–a primary factor here. According to a 2008 report co-authored by DCFPI and DC Appleseed:

  • In 2003, only 32% of D.C. minority residents had a postsecondary degree, as compared to 93% of non-Hispanic whites.
  • Only 70% of minority adults had  even a high school diploma, as compared to 1% of non-Hispanic whites.

Our local economy is somewhat unusual. But I think it’s in some ways a forecast of things to come–a shift to what DCFPI characterizes as a “high-skills, knowledge-based economy,” combined with a growing demand for at least some postsecondary education and/or specialized skills training.

But will black youth come out of our public schools with the basic competencies they’ll need to cope with postsecondary-level coursework or other training that will qualify them for good jobs, with opportunities to advance?

For many, the prospects don’t look good. I’ll return to this in another posting.