New Jobs Figures Show Need To Extend Long-Term Unemployment Benefits

October 13, 2011

Another month, another bad jobs report from the Bureau of Labor Statistics. You’ve probably already read the top-line figures, but maybe not all these.

The unemployment rate is still stuck at 9.1%. Nearly 14 million people officially unemployed last month — about the same as in August.

An additional 1 million who looked for work during the past 12 months but gave up because they felt it was futile. Presumably lots who gave up earlier and so didn’t get counted as “discouraged.”

More than 6.2 million who’d been looking for at least 27 weeks, i.e., long enough to have exhausted their regular state unemployment insurance benefits — if they every qualified. This is a higher number than reported for either July or August.

A new brief from the National Employment Law Project tells us that jobless workers today face an average of somewhat over 36 weeks of unemployment. This figure is also higher than last month’s.

Not much hope for these people in the new jobs data. A total of 103,000 more people on non-farm payrolls than in August.

But about 45,000 of them were striking Verizon employees who’d returned to work. Discounting them, the private sector created roughly 92,000 jobs.

Meanwhile, the public sector shed an additional 34,000, bringing the total to more than half a million since September 2008.

Thus, the economy actually created about 58,000 jobs last month. NELP reports that it would need to create, on average, 400,000 per month to bring the unemployment rate back down to its pre-recession level in the next three years.

One might think that these dismal figures would prompt a substantial majority in Congress to vote for some targeted investments in job creation. But only if one had been living on another planet for the last two years.

House Majority Leader Eric Cantor (R-VA) has announced that the President’s jobs bill won’t even come up for a vote. But Republicans may pick out parts they agree with, he said.

Same seems to be the case in the Senate, where Republicans, joined by two Democrats, just blocked a vote on the bill.

Surely, one would think, they could agree to extend the federal programs that provide long-term jobless workers with some extra weeks of UI benefits.

One of them — Emergency Unemployment Compensation — is due to expire at the end of the year.

The other — Extended Benefits — will lose full federal funding. These benefits kick in after EUC benefits have been exhausted. So those receiving EUC benefits now will be shut out of the EB program unless Congress acts. Those who’ve already gotten to the EB phase will lose their benefits in January.

NELP estimates that nearly 1.8 million workers will lose their benefits by February. By the end of the year, the number will swell to at least six million.

As I’ve written more often than I wish I’d had to, UI benefits are one of the best quick-acting stimulus options we’ve got. According to Congressional Budget Office estimates, every $1.00 spent delivers as much as $1.90 in economic growth and employment.

Take the expanded benefits away and you can expect job losses. The Economic Policy Institute puts the 2012 figure for EUC alone at 528,000.

But the House Republican leadership finds potential common ground with the President only in certain UI reforms, not in the proposed extension of benefits for the long-term unemployed.

“More federal spending,” their memo says. If that were the answer, adds House Speaker John Boehner (R-OH), then the economic stimulus package would have kept the unemployment rate below 8%.

What’s needed are cuts in spending, taxes and those dreadful government regulations that are supposed to do things like prevent a repeat of the reckless financial transactions that helped land us in this mess to begin with.

So it looks as if we’re in for yet another donnybrook. And yet another round of made-up reasons for letting the extended UI benefits die.

Speaker Boehner’s argument is one of them, as the Center for Economic and Policy Research shows.

And then there’s this old warhorse trotted out by Congressman James Renacci (R-OH): “[T]he length of compensation eligibility has turned from a bridge between jobs into an excuse to put off that job search for just one more week.”

As if people who’ve been laid off just kick back when their benefits average $296 a week — much less for low-wage workers, of course.

In any event, as Renacci should know, you can’t get UI benefits unless you’re actively searching for work. And, at this point, there’s only one job for every four people looking.

Pushing more people into poverty faster isn’t going to change that.

UPDATE: BLS has just released the results of its Jobs and Labor Turnover Survey for August. EPI economist Heidi Shierholz, my source for JOLTS analyses, reports that the ratio is now one job for every 4.6 jobless workers actively looking.


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.

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.

We Need Action On the Job Crisis Now

December 14, 2009

For months, President Obama has been preoccupied with Afghanistan, the climate change summit and getting a health care reform bill passed. The rest of the country has been saying, Do something about JOBS!

And with good reason. We’re told that the November unemployment figures are good news. But 15.4 million American workers are unemployed–over 38% of them for more than six months. An additional 10 million have given up looking for work or are working part-time because that’s the best they can do.

The situation is even worse for black and Hispanic workers. Unemployment rates for them are 15.6% and 12.7% respectively. The Economic Policy Institute says it expects 40% of them to be unemployed or under-employed at some point over the next year. Worst off are black teenagers, with an unemployment rate close to 50%.

The economy continues to shed jobs, though at a much lower rate than earlier this year. Looking at the Bureau of Labor Statistics’ latest job openings and labor turnover survey, EPI figures there were 6.3 job seekers for every job opening in October.

The ratio of seekers to jobs will grow unless something dramatic happens. Because it won’t be enough for employers to stop eliminating jobs. EPI says the labor market would have to grow by an average of 581,000 jobs a month to bring the unemployment rate back down to its pre-recession level.

Now the President has outlined a plan to jump-start job creation, using funds appropriated for the bank-bailout. I’m still chewing it over. So, I suspect, are members of Congress–except, of course, the House Republican leadership, which is dead set against more spending.

What Congress can–and should–do is act on the most urgent elements now. Otherwise, the extended unemployment insurance provisions in the economic stimulus package will expire–notwithstanding the recent legislation to extend them.

A new brief by the Center for American Progress Action Fund and the National Employment Law Project says that 1 million workers will lose job benefits in January unless Congress acts. By March, the number will have increased to 3.2 million. NELP has a customizable e-mail we can send to support the needed legislation.

Congress should also immediately extend the COBRA health insurance subsidies. Beneficiaries have already started losing these. Millions more could face a tripling of their premiums in the months to come.

A third priority are the stimulus provisions that have helped states balance their over-stressed budgets. An estimated 900,000 jobs will be lost unless Congress extends these ASAP.

More about them in another posting.