“Bad News For The Jobless And America”: How Our Economy Lost $400 Million In One Week Alone
Long-term unemployment benefits expired on December 28, meaning an absence of checks this week for more than 1 million jobless Americans. That’s bad news for them, of course—but also the rest of us. According to a new analysis from the minority staff of the House Ways and Means Committee released Friday, $400 million was drained from state economies this week alone thanks to the lapse.
Unemployment benefits are one of the more effective forms of stimulus because the money is badly needed and thus spent right away. The Congressional Budget Office says 200,000 jobs will be lost this year if the benefits are not restored, and this week the damage began.
Big states were obviously the hardest hit, naturally: nearly $65 million came out of the California economy in one week alone, according to the analysis. And of course, states represented by Republicans who oppose the extension each suffered some economic harm. Senator John Cornyn twice blocked a vote on an unemployment insurance extension before the holiday recess, and his home state of Texas lost $21.8 million this week.
Yet Republicans, so far, have not expressed any desire to extend the benefits. “Every week that Republicans fail to act tens of thousands of additional long-term unemployed Americans lose this vital lifeline as they look to get back on their feet after the worst recession in generations, and the economy in each state is taking a hit,” said Representative Sander Levin, the ranking member on Ways and Means.
Senator Harry Reid has promised a vote early next week on a bill by Senators Jack Reed and Dean Heller to extend the benefits for three months, with no offsetting spending cut, so that a longer-term bill can be worked out. But Heller is the only known Senate GOP sponsor to date, and House Speaker John Boehner has said he doesn’t want any bill without a pay-for attached.
If that bill fails, Democrats have a couple options this month: an extension of benefits could perhaps be folded into either the farm bill, which is in conference negotiations, or into the several omnibus spending bills that need to be finalized soon. In those latter two cases, Republicans would no doubt extract some sort of price from Democrats for extended benefits, but perhaps a solution is still possible.
But, again, Republicans seem to have other plans. House majority leader Eric Cantor announced Thursday his plans for the new year: yet another vote to modify Obamacare, this time adding new security requirements to the health insurance exchanges. The White House has said there is no danger of breaches, and some observers, like Steve Benen, think Cantor’s bill is simply a ploy to scare people away from the exchanges.
In any case, while Cantor fiddles around with his messaging bill on Obamacare (which will never be signed into law), his home state of Virginia lost $2.8 million in economic activity this week, as 9,700 people lost benefits. That’s going to be hard to justify as time goes on, both for Cantor and his colleagues.
By: George Zornick, The Nation, January 3, 2014
“Job One, Helping The Jobless”: Can Congress Pass An Unemployment Insurance Extension?
When extended Unemployment Insurance benefits expired late last month, 1.3 million jobless Americans immediately lost that bit of safety net; if Congress fails to act, another 3.6 million Americans will lose this support by the end of 2014. Senate Majority Leader Harry Reid recently said that on Monday the Senate will take up a temporary extension. Getting it done would not only be smart economics but it’s also simply the right thing to do.
Many on the right oppose extending benefits under the deeply dubious theory that too much unemployment compensation makes the social safety net a comfy hammock, to borrow Paul Ryan’s evocative simile. Why would people work, the theory goes, when they can get paid to not work? So people like Kentucky Sen. Rand Paul paint opposition to extended benefits as being rooted in concern for the jobless who suffer under the seductive yolk of big government’s helping hand – never mind that the study he cites doesn’t say what he says it says. And never mind that in order to receive jobless benefits, you have to be actively seeking a job, meaning that cutting benefits could actually discourage people from continuing to look for work. And never mind the paltry nature of support. As I wrote in my column last month:
The National Employment Law Project notes that “while the average American family spends $1,407 per month on housing alone, the average monthly extension benefit is only $1,166.” Still the modest sums help: According to the Council of Economic Advisers, in 2012 alone unemployment insurance benefits “lifted an estimated 2.5 million people out of poverty.” Further, the National Employment Law Project estimates, 446,000 of those people were children.
If members of Congress (and for that matter the yammering class) need any further evidence of the importance of extending benefits, the state of North Carolina has been unkind enough to conduct an experiment in punishing the unemployed. Last February the state enacted a law which not only slashed the duration (from 26 weeks to 12-20 weeks) and amount (from a maximum of $535 to $350 per week) of unemployment benefits, but also managed to run afoul of the federal jobless program, disqualifying North Carolinians from receiving those benefits.
So what happened when the lazy parasites were forced to stop suckling at the governmental teet? BloombergBusinessweek’s Joshua Green has a good piece today answering that question:
At first glance, the effect appears to be positive. North Carolina’s unemployment rate dropped dramatically, from 8.8 percent to 7.4 percent between July and November. By comparison, the national unemployment rate fell by 0.6 percent over the same period. A closer look, however, suggests that North Carolina’s unemployment numbers have fallen not because the long-term jobless have found work but because they’ve quit looking altogether. As a result, the state no longer counts them as unemployed.
As John Quinterno of the economic research firm South by North Strategies tells Green, while the number of unemployed in the state fell by nearly 102,000 year over year, 95,000 of those people aren’t counted as jobless not because they found jobs but because they stopped looking. Meanwhile, North Carolina’s food banks are getting overwhelmed, reports Bloomberg’s Evan Soltas, who quotes one food bank director who oversees seven counties and 230 organizations as saying that “some of our member agencies have been able to meet that need, but many have not.”
So what are the odds of Congress doing the right thing? As with many prominent issues these days, Democrats have the public on their side – according to a poll by the Democratic firm Hart Research, 55 percent of voters want the benefits extended. In order to pass an extension through the Senate, Reid will need to peel off at least a handful of Republicans (he already has one – Nevada Sen. Dean Heller, who is co-sponsoring the three month extension Reid is pushing). The Washington Post’s Greg Sargent has a good run-down of Republicans from either blue or purple states or from high unemployment red states who might vote with Reid. But, Sargent concludes:
The campaign to pressure Republicans into agreeing to extend UI has essentially amounted to an effort to shame them into it, by highlighting the huge numbers of their own constituents who stand to lose lifelines if they don’t act. Local press coverage has dramatically spotlighted the issue within states, as press compilations by Dems show.
But this doesn’t appear to be working with too many Republicans.
And even if the Senate passes the bill, odds remain long that House Republicans – who refused to include an extension when they cleared last year’s budget deal – will suddenly do the right thing.
If the GOP does block the extension, 2014 is off to a grim start for millions of Americans.
By: Robert Schlesinger, U. S. News and World Report, January 2, 2013
“Another Self-Inflicted Wound”: For Republicans, Unemployed Americans Are Lazy And Lack The Proper Motivation
As expected, federal emergency unemployment benefits expired over the weekend for 1.3 million jobless Americans. By the summer, another 1.9 million will be affected by the lapsed assistance. For Republicans, who celebrate the expiration, this will encourage the unemployed to work that much harder to find work – because the safety net that helped them keep their heads above water has now been removed.
Matt Yglesias, who called the situation “morally scandalous,” responds to the GOP argument by pointing to real-world evidence.
People who’ve been out of work for a long time obviously really need some money to get by, and they’re going to lose their money. And they’re not going to make up for it by getting jobs.
One way we know they won’t is from the experience of North Carolina, which for reasons of state politics did a UI cutoff for the long-term unemployed this year. Evan Soltas summarized the results and you can read Reihan Salam on the same thing if you want more right-wing street cred, but suffice it to say there was no “jobs boom” where lazy bums suddenly got off their asses and found readily available work. It turns out that being unemployed is really humiliating and depressing, and people who’ve been unemployed for a long time are people who genuinely can’t find any jobs. Cut them off from their benefits, and they end up scrounging at soup kitchens – they just can’t get work.
It speaks to the assumptions that undergird the political positions. For Republicans, unemployed Americans are lazy and lack the proper motivation. The government could help the jobless get by with meager, temporary support, but that only creates a “dependency.” It’s better, the argument goes, to cut these people off, encourage them to fend for themselves, and push them back into the workforce by leaving them with nothing.
Indeed, that’s precisely what Republican policymakers said in North Carolina back in July, when it became the only state in the nation to cut off access to federal emergency unemployment compensation after state benefits have been exhausted.
Did the far-right theory prove true? Of course not – the jobless, unable to find work, effectively abandoned the workforce altogether.
So, if cutting these struggling Americans off doesn’t help, what would? As we discussed last week, a more concerted effort to get these folks jobs.
As for Washington, congressional Democrats are eager to renew this fight when lawmakers return to Capitol Hill next week. For his part, President Obama called Sens. Jack Reed (D-R.I.) and Dean Heller (R-Nev.) late last week to offer his support for their plan for a three-month extension.
Gene Sperling, the director of the National Economic Council, added that allowing UI benefits to expire, as they did on Saturday, “defies economic sense, precedent and our values.”
By: Steve Benen, The Maddow Blog, December 30, 2013
“The Meaning Of A Decent Society”: What Do We Owe One Another As Members Of The Same Society?
It’s the season to show concern for the less fortunate among us. We should also be concerned about the widening gap between the most fortunate and everyone else.
Although it’s still possible to win the lottery (your chance of winning $648 million in the recent Mega Millions sweepstakes was one in 259 million), the biggest lottery of all is what family we’re born into. Our life chances are now determined to an unprecedented degree by the wealth of our parents.
That’s not always been the case. The faith that anyone could move from rags to riches – with enough guts and gumption, hard work and nose to the grindstone – was once at the core of the American Dream.
And equal opportunity was the heart of the American creed. Although imperfectly achieved, that ideal eventually propelled us to overcome legalized segregation by race, and to guarantee civil rights. It fueled efforts to improve all our schools and widen access to higher education. It pushed the nation to help the unemployed, raise the minimum wage, and provide pathways to good jobs. Much of this was financed by taxes on the most fortunate.
But for more than three decades we’ve been going backwards. It’s far more difficult today for a child from a poor family to become a middle-class or wealthy adult. Or even for a middle-class child to become wealthy.
The major reason is widening inequality. The longer the ladder, the harder the climb. America is now more unequal that it’s been for eighty or more years, with the most unequal distribution of income and wealth of all developed nations. Equal opportunity has become a pipe dream.
Rather than respond with policies to reverse the trend and get us back on the road to equal opportunity and widely-shared prosperity, we’ve spent much of the last three decades doing the opposite.
Taxes have been cut on the rich, public schools have deteriorated, higher education has become unaffordable for many, safety nets have been shredded, and the minimum wage has been allowed to drop 30 percent below where it was in 1968, adjusted for inflation.
Congress has just passed a tiny bipartisan budget agreement, and the Federal Reserve has decided to wean the economy off artificially low interest rates. Both decisions reflect Washington’s (and Wall Street’s) assumption that the economy is almost back on track.
But it’s not at all back on the track it was on more than three decades ago.
It’s certainly not on track for the record 4 million Americans now unemployed for more than six months, or for the unprecedented 20 million American children in poverty (we now have the highest rate of child poverty of all developed nations other than Romania), or for the third of all working Americans whose jobs are now part-time or temporary, or for the majority of Americans whose real wages continue to drop.
How can the economy be back on track when 95 percent of the economic gains since the recovery began in 2009 have gone to the richest 1 percent?
The underlying issue is a moral one: What do we owe one another as members of the same society?
Conservatives answer that question by saying it’s a matter of personal choice – of charitable works, philanthropy, and individual acts of kindness joined in “a thousand points of light.”
But that leaves out what we could and should seek to accomplish together as a society. It neglects the organization of our economy, and its social consequences. It minimizes the potential role of democracy in determining the rules of the game, as well as the corruption of democracy by big money. It overlooks our strivings for social justice.
In short, it ducks the meaning of a decent society.
Last month Pope Francis wondered aloud whether “trickle-down theories, which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness…”. Rush Limbaugh accused the Pope of being a Marxist for merely raising the issue.
But the question of how to bring about greater justice and inclusiveness is as American as apple pie. It has animated our efforts for more than a century – during the Progressive Era, the New Deal, the Great Society, and beyond — to make capitalism work for the betterment of all rather merely than the enrichment of a few.
The supply-side, trickle-down, market-fundamentalist views that took root in America in the early 1980s got us fundamentally off track.
To get back to the kind of shared prosperity and upward mobility we once considered normal will require another era of fundamental reform, of both our economy and our democracy.
By: Robert Reich, The Robert Reich Blog, December 19, 2013
“Clothed In Righteousness”: Who Is Really Waging War On Christmas? Look In The Mirror, Right-Wing Scrooges
Spreading holiday cheer, a Western tradition for hundreds of years, no longer engages our so-called conservatives as the end of the year approaches. In fact, the innocent phrase “Happy Holidays” only serves to infuriate them. The new Yuletide ritual that excites the right is the “War on Christmas” – an annual opportunity to spread religious discord and community conflict, brought to us by those wonderful folks at Fox News.
Once started, wars tend to escalate and intensify — and the War on Christmas is no exception. The same right-wing Christian ideologues enraged by any multicultural or ecumenical celebration of the season — the people trying to transform “Merry Christmas” from a kind greeting into a mantra of hate — are now merrily inflicting additional misery on the nation’s downtrodden.
Just in time for the birthday of baby Jesus, they are cutting food stamps and unemployment benefits. It’s all for the benefit of the poor.
Just ask John Tamny, the Forbes magazine columnist and Fox News personality. During a Dec. 17 appearance on The Daily Show, Tamny endorsed the congressional decision to cut $5 billion from the Supplemental Nutrition Assistance Program by declaring, “If I were in control, I would abolish SNAP altogether. I think food stamps are cruel.” Looking very well fed himself, he explained that if people were “literally starving,” they would be saved by a ”massive outpouring of charity.” That will happen, said Tamny, when “people have literally distended bellies where they’re getting almost nothing.”
He sounded oddly let down when he added, “We don’t hear about the poor in this country starving on the streets.” That probably won’t happen immediately, even with the scheduled cuts, but maybe we can look forward to such Dickensian scenes by next Christmas if Tamny and the Republicans get their wish.
As for the unemployed, food stamps are not the only source of succor that will soon be snatched from them and their Tiny Tims. The Republicans have insisted on a budget that discontinues emergency unemployment benefits beyond 73 weeks, which means that millions of families will soon stop receiving the minuscule payments – usually a few hundred dollars a month – that kept them from destitution.
According to Republican theory, as articulated by Senator Rand Paul, helping jobless workers and their families for longer than the 26 weeks ordinarily provided by most states is just as “cruel” as giving them food stamps. “If you extend it beyond that, you do a disservice to these workers,” the Kentucky Republican said recently. “When you allow people to be on unemployment insurance for 99 weeks, you’re causing them to become part of this perpetual unemployed group in our economy.”
Actually, the absence of work is what causes long-term unemployment – not the presence of unemployment benefits. But in North Carolina, the right-wing state government has applied Paul’s theory by cutting benefits drastically. The result, as Bloomberg’s Evan Soltas has shown, has been to drive more people out of the state’s labor force, which has shrunk sharply, rather than somehow forcing people to find nonexistent jobs. To receive benefits, after all, it is necessary to prove that you’re seeking a job.
Facts are not about to deter statesmen like Paul or philosophers like Tamny. The spirit of this holiday is supposed to stimulate charitable concern for everyone, including the very least among us. What we are seeing instead is a real war on Christmas – not a silly struggle over greeting slogans or public displays, but an aggressive drive to deprive those who have almost nothing of the little we provide as a society.
The true enemies of Christmas – and of Christian hope, as articulated in this season by Pope Francis – are those who pretend to befriend the poor by taking bread from their children’s mouths. Both the mean old Grinch and Ebenezer Scrooge were saved from villainy before their stories ended. Our modern political misers, clothed in self-righteousness, have no such prospect of redemption.
By: Joe Conason, The National Memo, December 19, 2013
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