“The Largest Share Of The Burden”: Sequestration Forces Cuts To Long-Term Unemployment Benefits For Millions
There’s plenty of talk about how sequestration is hurting some workers, like the government employees facing unpaid furlough days this year. But the cuts are hitting unemployed Americans hard as well, according to one employment rights organization.
A new analysis shows the federal Emergency Unemployment Compensation program – which provides benefits to long-term unemployed Americans – will be cut by $2.4 billion, impacting millions of unemployed Americans. The National Employment Law Project analysis finds that the EUC program provides an average weekly benefit of $289 before sequestration reductions. Sequestration will take $43, or nearly 15 percent, out of that average weekly check.
However, the monthly benefit cuts will be much steeper in some states, inching above $200 or even $300 per month. Among the states taking the largest chunk out of all long-term unemployed workers’ checks is Maryland, which starting June 30 cut weekly benefits to all recipients by 22.2 percent, or about $72 out of that state’s average benefit of $325. New Jersey also cut benefits by 22.2 percent, or $85 from its average benefit, as of June 30. Montana, meanwhile, cut benefits by 19.6 percent, or $51 per week, starting on May 5.
“[I]t is the workers who have benefited least from the economic recovery who are bearing the largest share of the burden of these domestic sequester reductions,” said the National Employment Law Project in a statement.
States administer their own unemployment insurance programs, providing benefits for up to 26 weeks per worker in most states. Once workers hit that point, they can start to draw on federal programs for long-term unemployed, which provides up to 47 additional weeks of federal benefits.
The reason for the differences in state cuts lies in when states started making the cuts to the federal benefit payments. Sequestration forced cuts to that EUC program, but the government left it up to the states to determine how and when to make those cuts.
In a March advisory to state workforce agencies, the Labor Department directed states to implement reductions quickly, but not every state did.
“The preferred method was the one that most states opted for, which was just to implement as quickly as possible and spread the reduction out over the entire population of individuals who were collecting EUC benefits,” explains George Wentworth, senior staff attorney for the NELP. “The later that the states implemented, that percentage [taken out of checks] increased.”
Though some states cut benefits for all workers, others chose different routes. Some implemented “non-paid weeks” for claimants, while others shortened the number of weeks that the unemployed can receive benefits. A few only cut benefits to new EUC beneficiaries.
Two haven’t done anything yet to make up the shortfall resulting from the sequester. Louisiana and Nevada have yet to cut benefits, which may mean that when they do, their cuts will be all the steeper.
North Carolina’s EUC program ended at the end of June, but those cuts were unrelated to sequestration. That state cut its weekly unemployment benefits, making it ineligible for federal EUC benefits.
While benefits are cut, long-term unemployment remains a persistent problem. Currently, nearly 4.4 million Americans have been unemployed for 27 weeks or longer. That is down significantly from an early 2010 peak of 6.7 million but is far higher than the levels of around 1.1 million seen in the mid-2000s.
By: Danielle Kurtzleben, U. S. News and World Report, July 3, 2013
“There’s War On The Unemployed”: Now You Know, And You Should Be Angry
Is life too easy for the unemployed? You may not think so, and I certainly don’t think so. But that, remarkably, is what many and perhaps most Republicans believe. And they’re acting on that belief: there’s a nationwide movement under way to punish the unemployed, based on the proposition that we can cure unemployment by making the jobless even more miserable.
Consider, for example, the case of North Carolina. The state was hit hard by the Great Recession, and its unemployment rate, at 8.8 percent, is among the highest in the nation, higher than in long-suffering California or Michigan. As is the case everywhere, many of the jobless have been out of work for six months or more, thanks to a national environment in which there are three times as many people seeking work as there are job openings.
Nonetheless, the state’s government has just sharply cut aid to the unemployed. In fact, the Republicans controlling that government were so eager to cut off aid that they didn’t just reduce the duration of benefits; they also reduced the average weekly benefit, making the state ineligible for about $700 million in federal aid to the long-term unemployed.
It’s quite a spectacle, but North Carolina isn’t alone: a number of other states have cut unemployment benefits, although none at the price of losing federal aid. And at the national level, Congress has been allowing extended benefits introduced during the economic crisis to expire, even though long-term unemployment remains at historic highs.
So what’s going on here? Is it just cruelty? Well, the G.O.P., which believes that 47 percent of Americans are “takers” mooching off the job creators, which in many states is denying health care to the poor simply to spite President Obama, isn’t exactly overflowing with compassion. But the war on the unemployed isn’t motivated solely by cruelty; rather, it’s a case of meanspiritedness converging with bad economic analysis.
In general, modern conservatives believe that our national character is being sapped by social programs that, in the memorable words of Paul Ryan, the chairman of the House Budget Committee, “turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency.” More specifically, they believe that unemployment insurance encourages jobless workers to stay unemployed, rather than taking available jobs.
Is there anything to this belief? The average unemployment benefit in North Carolina is $299 a week, pretax; some hammock. So anyone who imagines that unemployed workers are deliberately choosing to live a life of leisure has no idea what the experience of unemployment, and especially long-term unemployment, is really like. Still, there is some evidence that unemployment benefits make workers a bit more choosy in their job search. When the economy is booming, this extra choosiness may raise the “non-accelerating-inflation” unemployment rate — the unemployment rate at which inflation starts to rise, inducing the Federal Reserve to raise interest rates and choke off economic expansion.
All of this is, however, irrelevant to our current situation, in which inflation is not a concern and the Fed’s problem is that it can’t get interest rates low enough. While cutting unemployment benefits will make the unemployed even more desperate, it will do nothing to create more jobs — which means that even if some of those currently unemployed do manage to find work, they will do so only by taking jobs away from those currently employed.
But wait — what about supply and demand? Won’t making the unemployed desperate put downward pressure on wages? And won’t lower labor costs encourage job growth? No — that’s a fallacy of composition. Cutting one worker’s wage may help save his or her job by making that worker cheaper than competing workers; but cutting everyone’s wages just reduces everyone’s income — and it worsens the burden of debt, which is one of the main forces holding the economy back.
Oh, and let’s not forget that cutting benefits to the unemployed, many of whom are living hand-to-mouth, will lead to lower overall spending — again, worsening the economic situation, and destroying more jobs.
The move to slash unemployment benefits, then, is counterproductive as well as cruel; it will swell the ranks of the unemployed even as it makes their lives ever more miserable.
Can anything be done to reverse this policy wrong turn? The people out to punish the unemployed won’t be dissuaded by rational argument; they know what they know, and no amount of evidence will change their views. My sense, however, is that the war on the unemployed has been making so much progress in part because it has been flying under the radar, with too many people unaware of what’s going on.
Well, now you know. And you should be angry.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 30, 2013
“The Sequester Will Help The Economy”: Another Right-Wing Fairy Tale Debunks Itself
Remember all those fearless predictions by the usual grinning idiots on the right about how the sequester was going to work miracles for the economy? Well guess what? That never happened.
I know, I know. I’m trying to recover from the shock.
The sequester took effect on March 1, so we now have three months’ worth of jobs data that have been released in its aftermath. The results have been underwhelming, to say the least. As Brad DeLong observed this week, we are still in a depressed economy. And as Ed noted yesterday, the latest monthly jobs report was thoroughly mediocre.
I particularly wanted to highlight the point the New York Times’ Annie Lowrey made: that the report shows that the sequester is already, specifically beginning to have a negative impact on employment. Yesterday’s report shows that the federal workforce, which has suffered cutbacks due to the sequester, is shrinking at a dramatically accelerated rate:
Federal employment had been on a downward trend since the start of 2011, with the government shedding about 3,000 or 4,000 positions a month through February. Then sequestration hit on March 1. And in the last three months, the federal work force has shrunk by about 45,000 positions, including 14,000 in May alone.
Those newly unemployed federal workers, of course, now have less money to spend, which will also slow down the economy. In addition, the sequester is also causing cuts in programs like unemployment benefits and benefits to low-income people such as aid for Women, Infants, and Children (WIC) and the Low Income Home Energy Assistance Program (LIHEAP). Benefits to the unemployed and low-income folks act not only as a social safety net, but also as stimulus, since poor people and the jobless are likely to spend every penny they’ve got. Now, less of that money will be going into the pockets of those people and thus into the economy at large. That will also hurt the economic recovery, such as it is.
So, for those of you keeping score at home? The right wing/free market fundamentalists/austerity caucus? They are wrong. Again. And once again, they are continuing to drive the economy, and the country, into the ground.
By: Kathleen Geier, Washington Monthly Political Animal, June 8, 2013
“Keeping The Outcry At Manageable Levels”: The Perverse Policy Math Of The GOP’s Sequester
So we’re 10 weeks in, and the GOP’s sequester strategy is coming into sharper focus. If a cut affects Americans residing at the higher end of the socioeconomic ladder, move heaven and earth to make it right. But if it affects folks who may have less means … crickets.
So while everyone knows about the heroic efforts of Republicans to rein in flight delays and restart White House tours, we hear a lot less about those who are losing the assistance they need to send their kids to school, eat a hot meal or just make it until they find their next job.
And one is left to wonder: How did a country like America ever get here? The answer is that it’s all part of the GOP’s long game against government.
It starts with a perverse kind of policy math that says if a government cut creates an inconvenience we should do something about it. But if a cut takes away something that’s critical to your survival today or the life trajectory of your kids, well, you’re out of luck.
And the way the sequester plays out – moving slowly across the land, knocking a handful of people out of Head Start here, reducing unemployment checks there – is the perfect way to effectuate a plan as brutal as the one Republicans conceive. Spreading out the impacts keeps the outcry at manageable levels, and ensures that there is no one critical mass of objectors – until it’s too late.
And in the mean time, the GOP gets what it’s long wanted: The slow withdrawal of government from the day-to-day lives of ordinary people. Government will continue to do many expensive things if the sequester plays out as intended: protect the country; administer justice; subsidize some industries and not others. But it will be out of the “help people go as far as their hard work and talent will take them” business. That just won’t be its role anymore.
We can certainly have a society that operates that way. There’s no rule against it. But what will America look like if the GOP gets it way?
On the one hand the amount of taxes some pay should go down. And those who are fortunate enough to be born into good life circumstances will have less competition to fear from those who are less well off – they simply will have less ways to get into a position to compete. Presumably that means wealth continues to collect at the upper ends of the socioeconomic structure, while more families fall to the bottom.
That’s not how the GOP would describe their approach, of course. But at some point we have to move past hysterical rhetoric about big government and get to the nuts and bolts of the policies they are attempting to effectuate under that banner. Now would be a good time to have that discussion.
It’s not only happening on the federal level. Texas Gov. Rick Perry has made headlines by calling on his state’s universities to find a way to provide a college education for $10,000. Now I suppose we could conclude that the governor really is concerned about people who can’t afford a more expensive education, though there’s little in his record to support that notion. More likely, this is his semester sequester. Rather than finding ways for less wealthy students to get the same quality education as their more well heeled counterparts, Perry’s putting the onus on the universities to dumb down their educational offerings for a less wealthy track.
All of this, of course, turns the way most of us think about government entirely on its head. When elected officials run for office, they do so by articulating a philosophy about how to address the problems we face – as a community, town, city or country. We vote for them when we conclude their prescriptions fit with the way we would like to see the problems we care about approached. Over the history of this country, that process – electing people who’s views align with our own – has resulted in the construction of a state that is more muscular in some areas, less so in others.
Another way of saying: Head Start didn’t just emerge like some kind of algae bloom on the national treasury. We, citizens, saw a problem, that disadvantaged kids weren’t getting a very good education. We asked our representatives to do something about it. Head Start was one of the solutions they came up with. If public polling is any indication, we like it. And if research is any guide, it works.
But the sequester means Republicans don’t have to debate the merits of Head Start. Instead, they keep the debate squarely in the frame that suits them best: that government is too big, it doesn’t work, we can slash away and no one will be the worse for it. But of course they will.
So where does this all end up? My guess is programs that people rely on sustain deep cuts, which becomes an argument to cut them even more: Look! Their performance is inexplicably worsening! And in some cases we get back to a place approximating where we were when the programs were first initiated. Over time, news reports and research bubbles up showing the deplorable circumstances under which some folks live, go to school, etc. Stirred by our conscience and the better angels of our nature we decide something has to be done. And we turn to government. Because that’s what its there for.
And at that moment, a cycle of absurd sequester stupidity will have finally run its course.
By: Anson Kaye, U. S. News and World Report, May 2, 2013
“It’s Not Poor People”: A Lesson In Who Actually Matters To Washington
Last night, after just several days of complaints from flyers—who had to deal with airline delays—the Senate rushed to pass the Reducing Flight Delays Act of 2013, which give the Federal Aviation Administration the power to avoid sequestration by shifting money and avoiding furloughs for air traffic controllers. The House did the same today. Given the number of flights, and the time lost from delays, it’s a decent solution to a real problem.
It’s also incredibly frustrating.
The sequester has been a disaster. The indiscriminate cuts to discretionary spending have harmed kids in Head Start, workers on unemployment benefits, and families in Section 8 housing. It’s on track to remove tens of billions from the economy, both in spending cuts and in lost output, as people lose jobs and cut back on their consumption.
But none of this has moved Congress to act. Instead, Republicans continue to use the sequester as a political tool, attacking Obama for cutting spending they like, and touting it when it cuts spending they don’t.
That is, until the sequester begins to harm valuable constituents, i.e., businesspeople and other frequent flyers affected by the FAA furloughs. Then, Congress—and Republicans in particular—will rush to fix the damage. It doesn’t help that this comes just a day after lawmakers skipped a hearing on mass, long-term unemployment—one of the key problems facing the country.
Whenever pundits or politicians call for cuts to the social-safety net, it usually includes a pitch for “shared sacrifice.” The idea is appealing; if we have to make painful decisions, it’s only fair if everyone is affected. But the fact is that there is no shared sacrifice. As soon as the wealthy and connected begin to feel discomfort, Congress is there, ready to address their concerns.
If only the rest of us were so lucky.
By: Jamelle Bouie, The American Prospect, April 26, 2013
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