Sunday, July 12, 2009

100s of Thousands of Workers Will Lose Unemployment Benefits Soon

Hundreds of Thousands of Workers Will Lose Unemployment Benefits Soon

By Marie Cocco

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When a virulent disease is ravaging you like a cancer, you don't want a cacophony of voices promoting different or contradictory cures. Yet that is what we're starting to hear about the economic crisis, not only from a politically divided -- and pretty scared -- capital, but from within the Obama administration itself. In just the past few days, Vice President Joe Biden has said the young administration misread the depth of the recession -- an honest account, since most private economists did as well. Laura Tyson, an outside economic adviser to the White House, said it's wise to start preparing another stimulus package.

Then President Barack Obama made everything perfectly muddy when he said in an ABC News interview that the seriousness of the downturn and how to attack it is "something we wrestle with constantly." Yet in the next breath, he expressed concern about the burgeoning deficit. But if anyone's looking for some clear voices, there are 650,000 of them just waiting to be heard. That is roughly the number of long-term unemployed who will begin losing their jobless benefits in September, according to the National Employment Law Project. Remember, the recession didn't start last fall when the government bailed out AIG and the financial system froze. It began in December 2007 -- and 6.5 million jobs have been lost since then. Depending on which state and the sort of triggers that apply to benefits, hundreds of thousands of workers laid off early in the downturn are soon to be left without the basic sustenance of an unemployment check.

Meanwhile, the Labor Department says, the number of unemployed people out of work for 27 weeks or longer continues to grow, reaching 4.4 million last month. In June, three out of 10 jobless workers had been out of work for at least six months, according to the department's data. The stimulus package the president signed soon after taking office did provide extended benefits, and boosted weekly payments. But even that extension runs out on Dec. 26, and would not apply to all the unemployed. Does anyone really believe that a significant portion of the unemployed will have found new work by then? Hardly. Both private and government economists now predict that unemployment will continue to rise at least through the end of this year.

"We can't ignore this moment when all these folks are running out (of benefits)," says Maurice Emsellem of the National Employment Law Project.

"That needs to be a top priority, to help these workers." Let's stop kidding ourselves. In no contemporary economic crisis -- not even those that unfolded on the Republicans' watch -- has Congress left the unemployed completely in the lurch. So some sort of spending package -- call it stimulus, call it stopgap emergency aid, whatever works -- is going to have to be passed.

The unemployment emergency helps feed another crisis Congress is going to be forced to address: the state budget disasters unfolding around the country. So far, 42 states have cut budgets that already had been enacted for fiscal 2009, according to the National Governors Association. More and deeper cuts are expected next year.

Already states have laid off and furloughed workers -- including, in some states, the very workers who process unemployment claims. Generally speaking, states are required to balance their budgets each year, a mandate that forces them to pull money out of the economy through spending reductions and tax hikes, counteracting the federal government's efforts to juice things up. "That is what happened during the Great Depression, we had states working against what the federal government was doing," says Heidi Shierholz, an economist with the Economic Policy Institute. With red states and blue, Republican governors and Democrats, all struggling against the same relentless, recession-driven drops in tax revenue, an almost irresistible political coalition for more aid to states eventually will take shape. And with the fast-approaching September deadline for extending some unemployment benefits, there will likely emerge one of those must-pass measures that may or may not be called another stimulus bill.

Any hot air expended trying to stop it serves no purpose but to fuel political fires. Remember, that is the whole point of those now huffing and puffing most heartily. They don't want to figure a way out of this morass; they just want to figure out a way to unseat those now in office.

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