unemployed

Job Seekers React To Dismal Jobs Report

by on June 4, 2011

Huffington Post…

This story was reported in collaboration with our partners at Patch.com. For the past three months, the millions of Americans who’ve been getting by on savings and unemployment checks could at least take some comfort in the job reports that the Bureau of Labor Statistics releases on the first Friday of every month. Almost 200,000 new jobs in February, about as many as that in March, and 232,000 in April. Even people who hadn’t worked since the recession began had reason to believe that things were looking up. Yet there were signs all along that things could get worse, and then last month they did. According to Friday’s bombshell jobs report, the U.S. economy added only 54,000 jobs in May, far fewer than expected or needed. Meanwhile, the unemployment rate actually worsened by a tenth of a percentage point. For some job-seekers, this news was just too bleak to contemplate. “The numbers are just so discouraging that after a while there’s no reason for me to look at them,” said a battle-weary Stephen Brown, a 31-year-old business school graduate from Morristown, N.J. Brown is among the millions of people for whom today’s news landed with an especially heavy thud -– the unemployed, the temps, the part-time contractors. A couple days ago, some of those job-seekers gathered at a workshop in the suburbs of Chicago . Sherri Gould, a resident of the town of Wilmette, was there. Gould said she worked for a decade in client services at Quest Diagnostics, the company that sends out those metal boxes labeled “Blood and urine specimens only.” When the economy crashed, the metal-box traffic slowed, she said. “Someone who is unemployed and has just lost their health insurance is not going to go to the doctor,” Gould explained. Soon she was among the unemployed herself. Sixty miles away, in Yorkville, Ill., a man named Robert Castro took his job search to the side of the road . He could be seen standing alongside Route 47 Friday, a cardboard sign in metal frame propped up beside him: “Any Work Wanted.” Castro, 47, said he spent more than a decade at a food distribution company, working his way up from a general worker to a supervisor. The upward trajectory ended when he was laid off a little over a year ago. His unemployment benefits ended about a year after that. Castro says he’s tried the traditional route to employment, the route that doesn’t involve standing alongside an actual road. “It’s a dead end,” he said. “I’ve had job offers, and they say overqualified. I’ll take a pay cut, whatever.” He said this is the first time he’s been unemployed since he started washing pans in a bakery when he was 14. In the past, when people in Danvers, Mass., lost their jobs, they could go to Gia Page for help. Page is a manager at CoWorx Staffing Services, a company that places people in clerical and manufacturing jobs. But her own job’s gotten tougher recently, thanks to the lack of opportunities awaiting the people who walk into her office. “I thought we would have more at this point,” she said, ” so that’s disappointing .” Nearby, in North Andover, Mass., someone else in the job-hunt business actually sounded a note of optimism today. Jori Blumsack, an accountant at a company that provides job-seekers with video resumes (it’s called The Vesume Group), said she’s seen a “very strong demand” for the people who come to her firm for work. Her reaction to the job report: “Wage levels have come down. People that are out of work are not going to go back to making what they made when they lost their job.” While it might be true that people are simply holding out for better pay, it isn’t true for everyone. Certainly not Stephen Brown, the business-school grad from New Jersey. For the past few months, Brown’s been holding down a temporary job in consumer-goods marketing that pays almost as much as his old job, which he lost in January 2010. What he wants is a permanent, full-time position, and he’s applied for about 500 of them. He says he’s had 75 to 80 interviews. “I started to count,” he said, “until I got a little too depressed.” Just yesterday, Brown was rejected from a job that he’d applied for back in October. The company had called him for the first time in January, interviewed him in April and again in May. Recounting the story, he was surprisingly even-toned. Brown said he’s trying not to dwell on his frustrations. “What can I do?” he said. “There’s not much I can do, I just gotta keep moving.”

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Job Seekers React To Dismal Jobs Report

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James M. Lynch: 5 Signs They’re Probably Not a Coach

by on May 27, 2011

Huffington Post…

As more and more people seek to run their own businesses, find their way through difficult financial situations and, in general, have the best life they can manage, many have turned to professional coaches for guidance and support. Coaches can help people and institutions grow past the limits they’ve set for themselves and generally keep things moving forward in a world that often trends toward inertia. The problem lies in the fact that as the field grows, more and more people want to get in on the trend and the designation “coach” is being adopted by just about anyone looking to sell their services — no matter how far from legitimate their claim. The following guidelines should be of some small help to help you decide which coaches NOT to hire: If they have a certificate in coaching but no real life or business experience in a “real job” then no matter what international coaching board has credentialed them, they are apprentices and not coaches. Hire them at your own risk if you want, but don’t pay full price. If their rate is low and their experience is questionable, they’re probably not a coach. My wife is a VERY effective home and small business organizer and, with the depth of what she accomplishes with her clients in improved results and time management, I have added her company as a resource for my coaching company. She and I find it fun when we see people whose last job description was house cleaning and now they’re billing at a higher rate than other maid services, but drastically lower than an actual organizer. We literally have seen former maid services that have re-named themselves as “household organizers” or “clutter coaches” (no kidding). If they do the job for you, they’re probably not coaches, but consultants. If you were ever at a little league game you’ve seen a coach tell the kid how to get more hits, throw and field better, but you don’t see the coach taking the at bat for a kid or out in left field shagging flies. It doesn’t work if the job gets done for you; how can you learn and improve that way? A coach should not make you dependent on them for the long term, but empower you to succeed on your own. If they have more than one job title, they’re probably not a coach. I just found a “coach” in one of my Linkedin networks who is a CPA/Accountant, Financial Advisor and Life Coach. How does that work? These are usually those people who think they have a knack for telling others what they should do or think they have a gift for giving advice. If that were the case then 90% of parents-in-law (not mine of course) and my unemployed cousin, the one who everyone says “isn’t living up to his potential,” would be in the coaching business. If their business card contains the word psychic, they’re probably not a coach. Seriously, I ran into someone on the street the other day and he introduced his friend, “She’s a coach too!’ His friend shared her card and it said “Psychic Coach.” Let’s just call them an numerologist, astrologer, tarot card reader or whatever it is they actually do and, if you go in for that sort of thing, hire them for that purpose — but not coaching. I suppose it’s not fair to leave this topic as just “who you don’t hire” but the “how to hire a coach” topic is probably enough to fill another totally separate article and I’ll take a stab at it for next week, including recommending one or two people who are world class coaches with proven results. In the meantime, I’d love to collect some stories about coaches, good or bad, that anyone would like to share below.

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James M. Lynch: 5 Signs They’re Probably Not a Coach

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Rich Tafel: Nudge the Market, Change the World

May 20, 2011

“It’s sort of the worst of times and the worst of times.” This quote from Irv Katz, president of the National Human Services Assembly, a coalition of nonprofit organizations, sums up the state of nonprofit organizations’ funding cuts in the public policy arena. Nonprofit organizations that survived the budget cuts in 2011 are now developing a new campaign to combat far deeper reductions in 2012. Even if these entities are successful in staving off the worst, it is clear that the familiar ways of doing business with the government are over. To continue aiding their constituencies, nonprofit organizations must reconsider the “old-style advocacy” type of government funding requests and take a more creative, long-term approach. This “new normal” in economic matters requires a new perspective. In Nudge: Improving Decisions About Health, Wealth, and Happiness , Cass Sunstein and Richard H. Thaler discuss the power of choice architects, who shape incentives to advance the public good. The government is the largest choice architect in citizens’ lives; it incentivizes and nudges people in thousands of different ways toward what it considers to be the public good. Should a person buy or rent a home? This decision is often based on government tax incentives for home ownership. Should one purchase a hybrid or conventional car? Tax write-offs and privileges such as using fast lanes on highway can make the hybrid a better choice. I put more money in my retirement account because I get a tax break for doing the responsible thing, although this action resulted from prodding by the government. When the government taxes cigarettes, smoking decreases and tax revenues increase, which is another example of government nudging. Government incentives can allow greater freedom of choice and, unlike government grants, do not require an annual public request for funds. Home mortgage deductions total about $100 billion each year and silently drive our housing market. But, imagine if individual homeowners were required to lobby the government every year to grant them a mortgage refund. Their chances of success would likely be zero. Because it’s a nudge through our tax system, we hardly notice this $100 billion annual payout. Nonprofit organizations seeking to improve the lives of the voiceless should pay attention to this psychology. The truth for nonprofit organizations is that neither philanthropic nor government grants can provide the sustainable funding solutions required to meet the needs of those they seek to serve. Their cause might be popular this year, but popularity among funders and government can vanish when the newest, hottest social entrepreneur comes onto the scene. To be successful in the new normal, nonprofit organizations need to become policy choice architects, for those they serve, by answering this question: “What government policy, if changed, would incentivize those we seek to serve to come to us?” Let’s look at a real-world case study of Shifting Gears , a career transition pubic-private program in Michigan, to see how this approach might play out. As Diana Wong , the program’s creator, summed up, “This new fiscal environment has made us re-think our advocacy strategy.” This public-private program has been getting grants from donors and the government. It offers a focused career-coaching program, placing white-collar workers in second stage growth companies that need new talent after working through entrepreneurial start up stage. They have an amazing success rate, with over 75% of all participants landing a well-paying job. However, they spend a huge amount of their time chasing government and foundation funding. Following this, they spend more time recruiting unemployed workers into the program. They are thinking of a new advocacy strategy by asking this powerful question: “What government policy could we change that would incentivize the unemployed to use our successful career transition model?” They decided the best policy nudge with the greatest impact is the unemployment check sent by the government. They promoted the idea of having state governments extend unemployment benefits to those who enroll in their programs. Under this scenario, all stakeholders win. Workers win because more than 75% of those enrolled get new jobs. Government wins because this transforms the unemployed into taxpayers and prevents the brain drain the state is facing. In addition, given the program’s success rate, only a small percentage of those who seek such an extension will likely ever use it. Nonprofit organizations win as well. Rather than focusing on expensive, time-consuming lobbying campaigns to get government and philanthropic support every year, these organizations’ leaders can spend less time on fundraising and marketing these programs and more time implementing them. Changing incentives makes all stakeholders winners, which is the goal of all successful advocacy efforts. Nonprofit advocates can begin by envisioning themselves as choice architects for lasting world change and asking this simple question: What public policy could we change in order to nudge the world? Rich Tafel is President of Public Squared , an organization based in Washington, DC, that is dedicated to training nonprofits for success in the public policy arena. Tafel is also a board member of Michigan Corps . -a local and global network of leaders advancing education and entrepreneurship across Michigan. His email is rich@thepublicsquared.com.

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For Jobless, Florida Set To Become Stingiest State In America

May 10, 2011

Thanks to a pending law, next January Florida will become the stingiest state in America when it comes to unemployment insurance benefits. A bill awaiting Republican Gov. Rick Scott’s signature will cut unemployment taxes on businesses by reducing the maximum benefits for people laid off through no fault of their own to 23 weeks. That’s three fewer weeks than the standard 26 weeks provided by nearly every state for the past 50 years. And as the unemployment rate falls, benefits will diminish on a sliding scale, with a floor of just 12 weeks when the rate is 5 percent or lower. Rep. Doug Holder, the Sarasota Republican who sponsored the bill in the Florida House of Representatives, told HuffPost the measure wouldn’t harm the unemployed because the average person who draws unemployment in Florida uses only 17.7 weeks of benefits before finding work. “If the average person is utilizing 17.7 weeks, we’ve got quite a cushion between 17.7 and 23 weeks,” Holder said, adding that the bill would replenish the state’s unemployment trust fund within a few years. “The most important thing for us in Florida to do is to send a message to the business community and let them know we’re open for business.” The legislation directs new claimants to participate in a skills review program to develop a plan for referring the worker to potential job opportunities, Holder added. It also makes it easier for businesses to challenge claims from former workers and provides stricter work search requirements for claimants. “The proposed reforms provide relief to employers by weeding out individuals taking undue advantage of the system and provide relief to the unemployed by offering additional assistance to help them get back to work,” bill sponsor Sen. Nancy Detert (R) said in a statement . “The bill also saves administrative costs which can be reallocated to make sure those receiving benefits are meeting the requirements of the program.” National Employment Law Project, a worker advocacy group, has said Florida will take first place in what the group has called a “race to the bottom” once Gov. Scott signs the bill. Florida is the third state after Michigan and Missouri to cut the standard 26 weeks of benefits. The reductions in the Florida bill, which are the steepest by far, will take effect in January. Florida is one of 25 states where the jobless are eligible for 99 weeks of unemployment benefits thanks to 73 weeks worth of federal extensions put in place to fight the recession. Unless the Republican-controlled U.S. House of Representatives is willing to reauthorize those extensions, they’ll expire in January and 23 weeks of support will be all that’s left in Florida. All states require people collecting jobless aid to search for work, but the specific requirements vary by state. Floridians collecting jobless aid must search for “work that is reasonable for the claimant considering his or her background, training, abilities, and duration of unemployment,” but the law doesn’t specify a minimum number of job contacts, according to a 2010 report by the National Foundation for Unemployment Compensation and Workers’ Compensation, a research nonprofit founded by UWC Strategic Services on Unemployment & Workers’ Compensation, which lobbies on behalf of business interests on worker issues. The new law will require workers to prove they’ve contacted at least five potential employers each week, supplying the name, address, and phone number of each employer. “Requiring submission of detailed evidence of five employer contacts each and every week through automated and voice response systems that are already strained by high workloads will only lead to more system breakdowns,” said NELP director Christine Owens in a statement . “These kinds of mandates will inevitably and unnecessarily impose major new administrative burdens on the state’s unemployment insurance program, cause more payment delays, and undoubtedly frustrate and discourage some workers from filing for unemployment insurance they have earned.” The bill also broadens the definition of “misconduct” to include behavior outside the workplace or work hours, which NELP says goes beyond the standard in most states. Dough Holmes, president of the UWC, said that while many states might not have such broad misconduct statutes, legal cases have set standards for out-of-office behavior being considered misconduct if it reflects badly on a business. The Florida Chamber of Commerce, which strongly supported the legislation, said it cuts down on waste and fraud. “One of the big things we hear from our members is frustration from having fired or dismissed individuals for misconduct and the employee having filed for benefits immediately after they’ve left,” said Teye Reeves, policy director for the chamber.

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‘America Wants To Work’: Organizing The Unemployed

April 26, 2011

The community organizing affiliate of the AFL-CIO is coordinating with state labor groups to hold monthly meetings of the unemployed in five U.S. cities, in hopes of connecting the jobless with helpful resources and involving them in local politics. Hundreds of jobless Working America members (and non-members) have attended meetings in Portland, Ore.; Albuquerque, N.M.; Denver, Colo.; Pittsburgh, Pa. and Minneapolis, Minn., officials said. The meetings, which began in February, are part of a campaign called “America Wants to Work,” aimed at helping struggling workers at a time when public officials are more focused on slashing spending on social programs and taking away collective bargaining rights. “We just want to help folks,” Chelsey Evans, state director of Working America in New Mexico, told HuffPost. “We’ve had several meetings and we’re coming together to provide services and support to anyone in the community who is unemployed. We’re finding that a lot of people really struggle to navigate through this extremely complex system, whether it’s unemployment, rental assistance, utility assistance, job counseling.” Evans said that of Working America’s 98,000 members in New Mexico, some 11,000 are unemployed. Working America is launching the New Mexico Wants to Work campaign in collaboration with the New Mexico Federation of Labor, the United Way of Central New Mexico, and the Central New Mexico Central Labor Council. Susan See, laid off early in 2009 from her job doing advertising and administrative work for a local newspaper in Albuquerque, said the New Mexico Wants to Work monthly meetings have been a big help. She’s doing some freelance photography while her search for full-time work grinds on, seemingly endlessly. “It helps a lot just to have a support network, just to know that I’m not alone,” said See, 41. “It starts to feel after a while, ‘What am I doing wrong? Is it my age, is it because I’ve been out of work so long?’ And then you start hearing that from other people, that they’re having the same issues.” Bob Tackett, executive secretary-treasurer of the Northwest Oregon Labor Council, said about 70 people showed up at the first Oregon Wants to Work meeting in February, and that turnout’s diminished slightly at subsequent meetings, which Tackett said has been disappointing. At the second gathering of the jobless, Tackett said, “I got one of the managers from the unemployment office to be there and answer some of their questions. I thought boy, this is good stuff.” Working America member Teresa Berlin of Portland said she’s been at every meeting. “It’s kind of like a support system as a well as a political activist thing,” she said. Berlin, 37, said she lost her job as a server at a restaurant in 2007. She’s been scraping by with part-time work as a cab driver, unemployment insurance, and rental income since then. “I rent out all the rooms in my house to pay the mortgage,” she said. “I have five roommates.” Berlin said she’s networked with other unemployed folks, some of whom seem to be struggling more than she is. “There’s a lot of people that are really depressed, that feel isolated,” she said. “One woman had been putting out resumes for a year and hadn’t got one single interview. I’m really blessed compared to a lot of people.” The America Wants to Work campaign is reminiscent of Working America’s effort last year to mobilize its unemployed members ahead of the midterm elections in November. Among the group’s 3 million members, half a million are jobless, according to a spokeswoman.

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Recent College Graduates Not Only Move Back Home, But Stay There

April 22, 2011

NEW YORK — Ashley Moore never planned on moving back in with her parents. Nearly a year after graduating from college, Moore, 22, also never expected to still be waking up in her old twin bed every morning. “It’s been difficult because not only was I on my own, I was really far away,” explains Moore, a St. Louis, Mo., native who graduated from Pace University in New York City. At one point, she spent an entire year away. “What I miss most is my freedom and having my own space.” We spoke yesterday via Skype. You can see Moore describe what it’s been like to move back home: Like many 20-somethings, Moore is experiencing what it’s like to not only move back home, but stay there . Despite a recent report released by the National Association of Colleges and Employers, which predicts that 2011 graduates may enter into an improved job market, many remain skeptical. Andrew Sum, an economist at Northeastern University, concedes that while “it’s better to be plus than minus, we’ve still got a really long way to go until we restore things back to the way they used to be.” Sum calls it the war against the young. Specifically, he’s seen a record number of college graduates forced to move home. Using data from the U.S. Bureau of Labor Statistics, Sum reports that 12.8 million college graduates under the age of 30 are either unemployed, working part-time or working at a job that doesn’t require a college degree. Such jobs can make it difficult for young people to establish a steady stream of income — to get the money required to not only move out of their parents’ house, but stay out. Further, Sum finds that young adults without a college degree have been pushed out of the labor market entirely and are finding work at a lower rate than anytime since the end of World War II. “The kids not working today will have a difficult time working tomorrow,” concludes Sum. “The evidence is overwhelming.” Since moving back home last June, Moore has been unsuccessful in securing a full-time job . She works part-time as a teaching assistant at a nearby pre-school. Her mother is an in vitro technician; her father owns a small carpentry business. For others forced into a similar situation, Moore stresses that communication is key to making the living arrangement work as best it can. “Your parents might regress and start treating you like you’re back in high school because, well, you’re back in their house.” Moore also advises to save, not spend. “Just because you’re not paying rent, doesn’t mean it’s a good time to go shopping.” The financial burden of going to college has always been her own. Moore is carrying $45,000 in undergraduate student loans and another $5,000 of debt split between two credit cards. Each month, she puts $250 of her part-time paycheck toward paying each of them down. Moore wants to attend law school and someday run for political office. In the meantime, she is keen on first getting her own apartment. Recently, Moore set a new deadline for herself: Come August, her goal is to finally be out from under her parents’ roof. “I know they love me, but it’s time for me to go,” says Moore. “I just hope that I can.”

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‘We All Need Jobs!’

April 22, 2011

Tired of getting nowhere in their search for work, 18 unemployed Californians are advertising themselves on billboards throughout the San Francisco area’s public transit system. “Let’s face it,” the advertisements say. “We All Need Jobs!” Howard Friedenberg, the leader of the group, said he got the idea for a campaign after seeing what he considered a badly-designed billboard for a lawyer or real estate agent. Friedenberg, who lost his job as a computer company’s communications specialist in November 2009, said he thought he could do better, and he recruited acquaintances he’d made while networking with other unemployed people. He said each of the 18 contributed $150 to cover the costs of ads and a website: www.WeAllNeedJobs.com . “We are a small group of self-promoting individuals looking for jobs,” the billboards explain. “Although we are talented, experienced professionals, getting attention of Bay Area employers hasn’t been easy. So here we are, on a poster.” Friedenberg said the initial goal was to receive media attention — and since the billboards went up in February, pretty much every TV station area has run a story . The campaign directs the curious to the group’s website, where employers can browse profiles of each of the 18 jobless individuals. Two of them have actually found work since its inception, according to the site. The word “LANDED!” is superimposed on their portraits. Do the billboards deserve credit for the hires? Not quite. But, Friedenberg said, it didn’t hurt. “I think what it did was it gave all of us a little more confidence,” he said. “We’re not embarrassed.” Friedenberg said the group has paid for for another eight weeks of ad space.

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Florida Workforce Agency Ends Program That Gave Superhero Capes To Jobless

April 20, 2011

A workforce agency in central Florida has ended a campaign to give superhero capes to the unemployed. Since its launch last week, the “Cape-A-Bility Challenge” faced intense media skepticism and an investigation from the statewide Agency for Workforce Innovation , which apparently considered the program a bit too innovative. In a Wednesday press release, Workforce Central Florida announced that it has “listened to the public” and will withdraw it’s “admittedly out-of-the-box creative campaign.” “Even though it seemed to offend some, it was the farthest thing from our intention which was to introduce our programs and services to job seekers and employers who need them,” the release said. “The decision was made today by our board leadership team in concern that the campaign may have been a little too out-of-the-box and missed the mark with such a broad audience.” The Associated Press reported that the job center spent more than $14,000 on 6,000 red capes as part of the campaign, which encouraged the unemployed to vanquish “Dr. Evil Unemployment,” a cartoon villain brandishing a pink slip. Cynthia Lorenzo, director of the state’s unemployment agency, reportedly called the spending “insensitive and wasteful.” The campaign included several photos, a comic strip, and a video on the central Florida agency’s website. The agency said the program had not been all bad news: “Fortunately, we’ve achieved some success in the short week-and-a-half the campaign has run, including new job postings online, new job candidates registered for services and an increase in usage of our website,” the release said. Dr. Evil Unemployment remains at large: The unemployment rate in Florida stands at 11.1 percent, according to Labor Department data released Tuesday. Here’s a picture of the supervillain facing off with a Florida worker: HuffPost readers: Did you, or did someone you know, participate in the Cape-A-Bility Challenge? PLEASE tell us about it — email arthur@huffingtonpost.com .

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Jodie Levin-Epstein: Don’t Cut Off Your Knows

March 7, 2011

Federal Reserve Chairman Ben Bernanke knows it. Education and training are central to our nation’s economic competitiveness. In fact, he recently urged that budget deliberations recognize the benefits of programs that equip workers with needed skills — even when we must grapple with difficult decisions around balancing state and federal budgets. But House leadership is taking action that will cut off our nose to spite our face. The House-passed Continuing Resolution, which would fund the government through the remainder of FY 2011, includes drastic cuts to adult, dislocated worker and youth programs under the Workforce Investment Act (WIA). These cuts would sharply reduce or eliminate funding for summer jobs for youth, job and training assistance for unemployed and underemployed workers, and support for one-stop career centers. Chopping job training programs is counterproductive to an effective recovery, especially at a time when the number of unemployed and underemployed is at historically high levels and nearly 14 million people are struggling to find work. Dislocated workers and other unemployed and underemployed workers benefit from WIA by gaining valuable skills. In fact, during the worst of the economic recession in 2008 and 2009 more than two-thirds of adults and three-quarters of dislocated workers who completed training programs found jobs, according to the U.S. Department of Labor. In a new CLASP report , workforce development policy experts Neil Ridley and Evelyn Ganzglass look specifically at how the WIA Adult program in three states responded to the urgency of the Great Recession. In good economic times, a major barrier to upgrading skills is “opportunity cost” — or what economists describe as the trade-off between spending time in training and at work. During the recession, however, jobs were scarce and the opportunity cost of education and training was low, making it an ideal time for many unemployed and low-income adults to build skills and earn credentials. Even though unemployment has declined in recent months, it’s still significantly higher than it was before the start of the recession. Further, given the skills/jobs mismatch that many economists have noted, now is the worst possible time to cut investment in workforce development programs. Many signs point to a long road to pre-recession unemployment rates. Workforce programs are helping by providing opportunities for the unemployed and underemployed to prepare for jobs once the economy fully recovers. They help employers by providing workers with the skills to compete. Cutting jobs and training just doesn’t add up, and it’s hardly the way to out-compete the rest of the world in a changing global economy that increasingly relies on what a workforce knows and the skills it possesses. On its face, these facts should move Congress to act on what we know: that training our workers is fundamental to recovery and future competitiveness.

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State GOP Lawmaker: Unemployed Should ‘Get Off Their Backsides’

March 3, 2011

Missouri state Senator Jim Lembke, a Republican who recently made headlines for taking issue with red light cameras , railed against unemployment benefits earlier this week during a debate about whether the state should accept additional federal funds in to extend the program. “Ninety-nine weeks is too long,” Lembke said, referring to the 99-week window during which the unemployed can receive jobless benefits. “People need to get off their backsides and get a job. Maybe they’ll have to get two jobs or three jobs to make ends meet, but they need to quit stealing from their neighbors.” Lembke’s comments appear to be part of a larger trend that has taken place across the country during heated debate about providing additional aid to the unemployed. Many legislators who have opposed the extension or reauthorization of benefits over the past months have expressed their belief that unemployment insurance either discourages recipients from seeking jobs, or simply rewards the “lazy.” HuffPost’s Arthur Delaney reported last year in the heat of the congressional standoff over unemployment benefits: Beneath the deficit concerns, however, there’s something else: the suspicion that the long-term unemployed are a bunch of lazy drug addicts. It’s not an opinion openly shared by most members of Congress, but a handful of senators and representatives from both parties have said this year that they suspect extended unemployment benefits actually discourage people from looking for work. While the one-year extension of funds for unemployment benefits ended up being a large selling point for President Obama’s tax cuts compromise in December, the House GOP recently blocked a proposal to include additional benefits to the long-term unemployed in legislation that would have funded the government through September.

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Dave Johnson: Blaming the Economy’s Victims for Economic Crimes

December 22, 2010

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF Blame the unions, blame the unemployed, blame loans to the poor, blame the government. As income and wealth increasingly go to a few at the top, public anger is directed at the economy’s victims. I am in a clinic all day participating in a medical study, so I was talking to one of the nurses. She brought up that California is in real trouble, is going broke, it’s a real mess. She says she doesn’t know what we’re going to do. She has heard that, “lots of states are going bankrupt. There is no money anymore.” So I asked her what we should do about it. She said it is because of the unions. “It’s just ridiculous. They want so much.” I asked if she follows the news closely, she said she does. “I watch the news a lot.” Some facts: California is famous for leading the country in a wave of anti-government tax-cutting and into Reaganism . We cut taxes an an anti-government ferver and increased prison spending in a law-and-order fever. Then the federal government cut taxes and increased military spending, leading to big deficits. Now we’re out of money to run the state government and the country is getting there, too. California’s problems have little or nothing to do with what state employees are paid, and a lot to do with tax cuts and people across the state not getting paid enough. Blaming The Unions This weekend CBS’ 60 Minutes joined the anti-worker chorus, blaming public employee unions for the problems faced by the states. Media Matters, in 60 Minutes’ one-sided, GOP-friendly report on state budgets describes the segment, In 2,600 words about state deficits, you won’t find the phrase “tax cuts.” Instead, CBS adopts the Republican framing that deficits are all about spending — frequently with loaded phrasing like “gold-plated retirement and health care packages.” And throughout the report, CBS allows Christie, New Jersey’s Republican governor, to launch attacks on unions and make unsupported claims about budget problems, all without ever challenging his assertions and without including substantive disagreement from Christie critics. … You’d never know from CBS’ report that a big part of the reason that “Christie and his predecessors” failed to make required contributions to the pension fund is that they decided to use the money for tax cuts instead. [emphasis added] Mike Hall at the AFL-CIO blog explains that New Jersey’s workers and pensions are not the problem, While politicians like Christie rail against the pensions public employees have secured through collective bargaining–painting them as overly generous golden parachutes, McEntee notes the average annual pension for an AFSCME member is $19,000, and the workers contribute 80 percent during their lifetime on the job. Tax cuts, income and wealth going to a few at the top, but the unions take the blame because they fight for a better life for working people. Blaming The Unemployed The unemployed and the checks they get are often blamed for their plight. They are called “lazy,” and it is even suggested the be tested for drugs . CAF graduate David Sirota, in Why the ‘Lazy Jobless’ Myth Persists The thesis undergirding all the rhetoric was summed up by conservative commentator Ben Stein, who insisted that “the people who have been laid off and cannot find work are generally people with poor work habits and poor personalities.” [. . .] The trouble, though, is that the whole narrative averts our focus from the job-killing trade, tax-cut and budget policies that are really responsible for destroying the economy. And this narrative, mind you, is not some run-of-the-mill distraction. The myth of the lazy unemployed is what duck-and-cover exercises and backyard nuclear shelters were to a past era–an alluring palliative that manufactures false comfort in the face of unthinkable disaster. Blaming The Poor And Government Republicans on the Financial Crisis Inquiry Commission are sabotaging the commission’s work, demanding that “Wall Street” and “deregulation” not appear anywhere in the report. They are refusing to participate , instead releasing a counter-report blaming the government, claiming We, the People forced the giant banks to give home loans to the poor , and blaming the poor for receiving those loans. What People Think People tend to think about what is put in front of them to think about. That’s why everyone goes to see a new movie on the first weekend instead of waiting until they can get good seats with no lines. Wall Street and the likes of the Chamber of Commerce understand this so they put scapegoats in front of the public to mask what they are doing. Right now there is a corporate/right campaign to blame working people for the problems they caused. Like 60 Minutes this weekend, the news sources are run by big corporations, and they have been saying over and over (and over and over) that unions and the unemployed and the poor and the government are the cause of the problems. (When was the last time you saw a union representative on TV, explaining the benefits of joining a union ?) And, naturally, after hearing these things over and over (and over and over), viewers like the nurse at the clinic I am in think they should blame the unions, the unemployed, the poor, the government, too. So much of the income and wealth are concentrating at the top. Taxes have been cut so far. The things our government does for us have been cut back so far. Working people’s wages have been stagnant for so long. But the blame right now is directed at the unions, the poor, the unemployed and our government: We, the People. As the AFL-CIO blog concludes , The long term solution to state and local fiscal challenges … is “a robust economy, one that is creating jobs and replenishing tax revenue.” To repeat: The long term solution to state and local fiscal challenges… is “a robust economy, one that is creating jobs and replenishing tax revenue.” Sign up here for the CAF daily summary .

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Dave Johnson: Blaming the Economy’s Victims for Economic Crimes

December 22, 2010

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF Blame the unions, blame the unemployed, blame loans to the poor, blame the government. As income and wealth increasingly go to a few at the top, public anger is directed at the economy’s victims. I am in a clinic all day participating in a medical study, so I was talking to one of the nurses. She brought up that California is in real trouble, is going broke, it’s a real mess. She says she doesn’t know what we’re going to do. She has heard that, “lots of states are going bankrupt. There is no money anymore.” So I asked her what we should do about it. She said it is because of the unions. “It’s just ridiculous. They want so much.” I asked if she follows the news closely, she said she does. “I watch the news a lot.” Some facts: California is famous for leading the country in a wave of anti-government tax-cutting and into Reaganism . We cut taxes an an anti-government ferver and increased prison spending in a law-and-order fever. Then the federal government cut taxes and increased military spending, leading to big deficits. Now we’re out of money to run the state government and the country is getting there, too. California’s problems have little or nothing to do with what state employees are paid, and a lot to do with tax cuts and people across the state not getting paid enough. Blaming The Unions This weekend CBS’ 60 Minutes joined the anti-worker chorus, blaming public employee unions for the problems faced by the states. Media Matters, in 60 Minutes’ one-sided, GOP-friendly report on state budgets describes the segment, In 2,600 words about state deficits, you won’t find the phrase “tax cuts.” Instead, CBS adopts the Republican framing that deficits are all about spending — frequently with loaded phrasing like “gold-plated retirement and health care packages.” And throughout the report, CBS allows Christie, New Jersey’s Republican governor, to launch attacks on unions and make unsupported claims about budget problems, all without ever challenging his assertions and without including substantive disagreement from Christie critics. … You’d never know from CBS’ report that a big part of the reason that “Christie and his predecessors” failed to make required contributions to the pension fund is that they decided to use the money for tax cuts instead. [emphasis added] Mike Hall at the AFL-CIO blog explains that New Jersey’s workers and pensions are not the problem, While politicians like Christie rail against the pensions public employees have secured through collective bargaining–painting them as overly generous golden parachutes, McEntee notes the average annual pension for an AFSCME member is $19,000, and the workers contribute 80 percent during their lifetime on the job. Tax cuts, income and wealth going to a few at the top, but the unions take the blame because they fight for a better life for working people. Blaming The Unemployed The unemployed and the checks they get are often blamed for their plight. They are called “lazy,” and it is even suggested the be tested for drugs . CAF graduate David Sirota, in Why the ‘Lazy Jobless’ Myth Persists The thesis undergirding all the rhetoric was summed up by conservative commentator Ben Stein, who insisted that “the people who have been laid off and cannot find work are generally people with poor work habits and poor personalities.” [. . .] The trouble, though, is that the whole narrative averts our focus from the job-killing trade, tax-cut and budget policies that are really responsible for destroying the economy. And this narrative, mind you, is not some run-of-the-mill distraction. The myth of the lazy unemployed is what duck-and-cover exercises and backyard nuclear shelters were to a past era–an alluring palliative that manufactures false comfort in the face of unthinkable disaster. Blaming The Poor And Government Republicans on the Financial Crisis Inquiry Commission are sabotaging the commission’s work, demanding that “Wall Street” and “deregulation” not appear anywhere in the report. They are refusing to participate , instead releasing a counter-report blaming the government, claiming We, the People forced the giant banks to give home loans to the poor , and blaming the poor for receiving those loans. What People Think People tend to think about what is put in front of them to think about. That’s why everyone goes to see a new movie on the first weekend instead of waiting until they can get good seats with no lines. Wall Street and the likes of the Chamber of Commerce understand this so they put scapegoats in front of the public to mask what they are doing. Right now there is a corporate/right campaign to blame working people for the problems they caused. Like 60 Minutes this weekend, the news sources are run by big corporations, and they have been saying over and over (and over and over) that unions and the unemployed and the poor and the government are the cause of the problems. (When was the last time you saw a union representative on TV, explaining the benefits of joining a union ?) And, naturally, after hearing these things over and over (and over and over), viewers like the nurse at the clinic I am in think they should blame the unions, the unemployed, the poor, the government, too. So much of the income and wealth are concentrating at the top. Taxes have been cut so far. The things our government does for us have been cut back so far. Working people’s wages have been stagnant for so long. But the blame right now is directed at the unions, the poor, the unemployed and our government: We, the People. As the AFL-CIO blog concludes , The long term solution to state and local fiscal challenges … is “a robust economy, one that is creating jobs and replenishing tax revenue.” To repeat: The long term solution to state and local fiscal challenges… is “a robust economy, one that is creating jobs and replenishing tax revenue.” Sign up here for the CAF daily summary .

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Joe Biden Defends White House-GOP Tax Cut Deal

December 19, 2010

WASHINGTON — Vice President Joe Biden defended the Obama administration for its willingness to extend tax cuts for top earners, despite earlier promises that he and the president would fight against the Bush-era policy. “We got to the end, we couldn’t get it done, and we had to make a decision,” Biden said about President Barack Obama’s compromise with Republicans to allow tax cuts across the income scale to continue. The vice president told NBC’s “Meet The Press” in an interview broadcast Sunday that he and Obama still believe tax cuts for the wealthiest are “morally troubling” and that they would fight to avoid renewing the cuts when they expire in 2012. “The one target for us in two years is no longer extending the upper income tax credit for millionaires and billionaires,” Biden said. Since his campaign for president in 2008, Obama has said income tax rates should rise for single taxpayers with gross incomes over $200,000 and married couples with incomes over $250,000. His first budget, submitted a year ago, included plans for those tax increases. With the economy still struggling, Biden said the tax-cut extensions will provide certainty to the public and to businesses, and the administration hopes they will spur hiring and growth. A more robust economy, Biden said, would allow the president to make a stronger case for eliminating the cuts for the wealthy. “We will be able to make the case much more clearly that spending $700 billion over 10 years to extend tax cuts for people whose income averages well over a million dollars does not make sense,” Biden said. Obama’s compromise with Republican leaders won him rare bipartisan support, but angered many liberal Democrats. The agreement also offers 13 months of extended benefits to the unemployed and attempts to stimulate the economy with a Social Security payroll tax cut for all workers.

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Unions for the Jobless: Unemployed People Find Solidarity Online

September 14, 2010

When Charlene Troyer of Chicago, Illinois, was laid off from her job as an environmental manager for a garbage collection company in November 2009, she felt like there weren’t many people she could turn to for moral support. Her parents had never been unemployed and all four of her grandparents had kept their jobs through the Great Depression. “This was a whole new territory for them,” she told HuffPost. “One set of grandparents were self-employed farmers, and the other side worked for the postal service, so they never saw any job loss. They thought people who were unemployed had issues because of something they had done. They had no concept of a bad economy.” After several months of missing mortgage payments, trying to support three children on a $450-a-week unemployment check and watching her credit become ruined beyond repair, she says she decided to look for support groups online. “The depression just gets so bad,” she told HuffPost. “You look at the stack of bills and decide what the heck you’re gonna pay and how the heck you’re gonna afford food. My self confidence and dignity have been compromised.  I have failed my obligations to support my family and provide for them. It helps to talk to people who are going through the same thing.” Troyer says she found a Facebook organization called “Extend Unemployment Benefits” , where jobless people from across the country gather to offer support and advice to each other, discuss the latest in unemployment news, and rally together to petition Congress to extend unemployment benefits. One active group member, Brian Yeagle, uses the site regularly to motivate other unemployed people to vote and call their senators. “I have been on the phone for the last 3 hours straight calling Senator’s offices, pushing the message Tier 5 to Survive!!” Yeagle wrote on the page Monday. “Please continue to call, email, and fax today and everyday, this is the only way we are gonna make this work…. Please don’t give up now!!” Other members use the site as a venue to creatively express their frustrations. “How am I to stand up and enjoy the pride of being a father who cannot provide?” Lance Sievert wrote on the group discussion board. “My head has fallen, my eyes are cast downward. Where is the man that not so long ago could hold his head high, whose blue eyes were framed in an uplifted brow and who walked with a spring and urgency? He was not real? He was only so as is given by the contentness (sic) and security of being employed.” A number of support groups for the unemployed have sprung up online since 2008, reflecting a strong need for solidarity and commiseration among the jobless during this excruciatingly drawn-out period of high U.S. unemployment. On Unemployed-Friends.com , administrators post information about pending legislation for benefits and job creation, employment networking, job opportunities and schooling grants. On JoblessJoe.com , a more discussion based online community, people can share their personal unemployment stories, ask for feedback on their resumés and find money-saving tips from others in a tight financial situation. For some users, like Troyer, the sense of community in these online support groups is so strong that they are staying active on the sites long after they become re-employed. Troyer, who finally found a job in July making about $17,000 less than she was making in her previous job, said she continues to offer support and advice to people on the “Extend Unemployment Benefits” Facebook page because it gives her a sense of purpose, even though her own financial situation has improved. “When people have interviews, I cheer them on and give them advice as far as how to answer questions. It helps me to respond to other people because I can see they’re in worse shape than I am,” she said. “Helping them helps me.”

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Dominique Strauss-Kahn: Saving the Lost Generation

September 14, 2010

Oslo was the scene this week of a remarkable event that brought together global leaders from government, business, trade unions, and academia to discuss what many of them said is the biggest issue facing the world today: the jobs crisis. They spoke of the 210 million people currently out of work worldwide — the highest level of official unemployment in history. They spoke of the human impact in terms of persistent loss of earnings, reduced life expectancy, and lower educational achievement for the children of the unemployed. And they spoke of a potentially “lost generation” of young people whose unemployment rates are much higher than for older groups. Fortunately, they also spoke of what can be done to save this lost generation. The Oslo Conference — hosted by Prime Minister Jens Stoltenberg of Norway and co-sponsored by the International Labor Organization (ILO) and the International Monetary Fund (IMF) — the first such joint endeavor in 66 years–attracted extraordinary participation. By government leaders from Prime Minister George Papandreou of Greece to José Luis Rodriguez Zapatero, Prime Minister of Spain, and President Ellen Johnson Sirleaf of Liberia; by prominent Ministers such as Christine Lagarde of France and Ian Duncan Smith of the UK; by union leaders — Sharan Burrow of the ITUC, for example — and by some of the brightest minds in academia who are thinking about issues of growth, employment, and social cohesion. This Oslo Conference was certainly a historic step in strengthening collaboration between the ILO and the IMF — it is no secret that we have not always seen eye to eye. But it was also quite inspirational in its atmosphere of cooperation and shared sense of urgency about the need for increased attention and focus on unemployment — and to bring that issue much higher up in the policy mix. The ILO estimates that, over the next 10 years, more than 440 million additional jobs will be needed to absorb new entrants to the labor force. So the challenge both today and in the years ahead is huge. What is to be done? Naturally, there were a lot of different views expressed in Oslo. I certainly don’t claim to speak for everyone, but these are my main takeaways: First, we cannot say the financial crisis is over until unemployment decreases. We need growth — but we need growth that increases employment. An economic “recovery” that does not translate into jobs will not mean much to most people. Frankly, most people will not notice whether growth is a percentage point or two higher. But whether unemployment is 10 percent or 5 percent is a big deal. And it is not just the pain it imposes on the unemployed, but also the anxiety it creates for many of the employed. And with 30 million more people having become unemployed since 2007, you begin to get a sense of the immense human cost involved. Second, building on the previous point, job creation itself must be a priority and we need to use all the policy instruments available to achieve it. This includes using fiscal and monetary policies to support as strong an output recovery as we can–because output growth is the single most important determinant of employment growth. Even as many advanced economies face the need to stabilize or reduce high levels of public indebtedness, it is vital that this be done in a way that does not impair growth and jobs. In the same vein, financial sector reform needs to be aimed at making it a more make effective support of the real economy. For example, the financial sector can help to foster employment by helping to finance small businesses that have suffered limited access to credit during the crisis, but are the ones which can create the biggest amount of jobs. Third, there are many lessons and best practices that we can apply to ease the pain in labor markets and accelerate jobs recovery. Here, Oslo generated many good ideas. Some governments have stepped up placement services and expanded labor market programs aimed at improving skills and job search. Others have implemented policies allowing firms to retain workers, while reducing their hours and wages-thus spreading the burden of the downturn more evenly. Another step is to allow unemployment benefits to be extended. Subsidies targeted at specific groups–the long-term unemployed and youth, for example–can also stimulate job creation. Finally, cooperation is key. The consistent policy actions that many countries took during the crisis–through the deliberations of the G-20–helped to avoid the recession becoming a depression, and even more jobs being lost. This kind of cooperation will be even more important as countries exit from the crisis, and seek to restore growth and employment. Analysis undertaken by the IMF for the G-20 shows that the appropriate coordinated action over the next five years could increase global GDP by 2.5 percent, creating tens of millions of jobs. We should take advantage of the increased cooperation between the ILO and IMF to boost international coordination overall. Specifically, in Oslo, we agreed that the ILO and IMF could usefully work together in two areas of policy development: To focus on policies that promote job-creating growth; and To explore the concept of a social protection floor for people living in poverty and vulnerable groups–within a sustainable macroeconomic framework. These may not seem like earth-shaking developments. But, if indeed we can move forward our two organizations in this way, it can be an important step forward in helping the world to tackle the jobs crisis. We all need to think differently and more creatively: about the new economic forces at play in the post-crisis world; about the better integration of employment policies with macroeconomic policies, nationally and internationally; and about how to develop a wider array of policies and programs that can provide work for all who want it. That kind of thinking began in Oslo. This post originally appeared at iMFdirect .

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Workers In The Recession May Have Jobs, But They’re Not Happy

September 10, 2010

Sure, the recession has been hard on the unemployed. But what about workers who still have jobs? Turns out, they are depressed, too. They are exhausted, underpaid and treated badly by their bosses, but have been afraid to speak up. And now they are looking to move on to new jobs. See full article from DailyFinance: http://srph.it/aSBkNL

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Workers In The Recession: Stress, Boredom And Too Little Pay

September 10, 2010

Sure, the recession has been hard on the unemployed. But what about workers who still have jobs? Turns out, they are depressed, too. They are exhausted, underpaid and treated badly by their bosses, but have been afraid to speak up. And now they are looking to move on to new jobs.

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Erich Origen and Gan Golan: Happy Labor Day to the Unemployed

September 2, 2010

As you watch the Labor Day parade this year (assuming your city hasn’t cancelled it due to lack of funds), you may be reminded of our national crisis of unemployment. Some people see the unemployed merely as laborers who failed in the labor market. If you (and millions of others) fail, that’s just what the market needs to stay healthy for that other class of people, investors. Forgotten is the idea that we all belong to a larger group called citizens. We all know the promise–America’s promise of unlimited social mobility. Nothing is stopping you from scaling the ladder, so get climbing! The American Dream is within anyone’s grasp! Yet in the last 30 years, the American Dream has grown increasingly out of reach for more and more people– unless they live in a country other than America . According to our nonpartisan friends at Measure of America , “A poor child born in Germany, France, Canada, or one of the Nordic countries has a better chance to join the middle class in adulthood than an American child born into similar circumstances.” Take THAT, you cheese-eating socialists! In contrast, the American economic ladder has broken down–these days, you have to be born above a certain rung if you want to climb at all. And that rung is getting higher by the year. The Nerve and The Thumb cut Everyman’s “entitlements” (image from the book The Adventures of Unemployed Man ) So what? We should let people disappear from the marketplace like a bad product or business idea, right? We’re not citizens, merely economic winners and losers–and we reward only the winners. That’s what makes America great. Except it isn’t what makes us great. We all contribute to the success of this country, even when we fail–and our failure often makes the winners that much better because they had to compete against us. College and professional sports leagues realize this–there, the winner does not take all, but rather is rewarded while also enriching the entire league . The point is to have a strong league in which great individual achievements are possible. Not so with the Just Us League of America. Their sinister plan? Any and all rewards go straight to the top (especially to CEOs who cut jobs and got richly rewarded ). Those at the top are held up as role models–ignoring the fact that the educational, economic, and social structures that would make a respectable level of achievement possible for more people are defunded, destroyed, or out of stock. Sorry. Ask yourself this: Can The American Dream be achieved by an individual in isolation? Do we want people to succeed at everyone else’s expense? Or is Everyman’s loss–sooner or later–every man’s loss? We must face that fact that even in America, the success we strive for and celebrate is never purely ” self-made .” We aim to foster success in America–for all. Labor Day is a celebration of American laborers. That’s worth celebrating. But let’s remember that we are not merely laborers. We are American citizens. And we are all in this together.

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POLL: Unemployment Affects Three Out Of Four Americans

September 1, 2010

Nearly three out of four Americans have been directly affected by the recession, either because they have been unemployed or know someone who has lost their job, according to a new survey. The report , prepared by Rutgers professors Carl Van Horn and Cliff Zukin, find that 73% of Americans have either been unemployed themselves (14%) or saw an immediate family member (12%), another member of their family (30%) or a close friend (17%) lose a job. The survey also finds profound pessimism about where the economy is headed. More than half of Americans say they believe the downturn reflects a “lasting economic change” (56%) rather than a “temporary economic downturn” (43%). Large majorities believe that the economy will remain in recession or worse a year from now. “After suffering through the worst economic disaster most have ever experienced,” Van Horn said in a statement , “American workers have diminished expectations about America’s economic future and do not have much faith that the nation’s political leaders can move the country forward.” Asked about the causes of joblessness, the survey respondents mentioned three above all: global economic competition, illegal immigration and Wall Street bankers. The survey also found great skepticism about the government’s ability to handle the economy and, despite the widespread impact and pain, no consensus about potential remedies. For example, a majority rejects further economic stimulus — 70% disagree and only 30% agree that “The United States needs another economic stimulus package even if it causes the debt to increase.” Yet a majority (54% to 46%) agrees that “the federal government should fund programs that create jobs for the unemployed even if the debt goes up.” Americans were also evenly divided on whether the federal government should “cut taxes for businesses to create jobs” even if it increases the debt.

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Robert Reich: Why a Civil Society Extends Unemployment Benefits

August 31, 2010

I have the questionable distinction of appearing on Larry Kudlow’s CNBC program several times a week, arguing with people whose positions under normal circumstances would get no serious attention, and defending policies I would have thought so clearly and obviously defensible they should need no justification. But we are living through strange times. The economy is so bad that the social fabric is coming undone, and what used to be merely weird economic theories have become debatable public policies. Tonight it was Harvard Professor Robert Barro, who opined in today’s Wall Street Journal that America’s high rate of long-term unemployment is the consequence rather than the cause of today’s extended unemployment insurance benefits. In theory, Barro is correct. If people who lose their jobs receive generous unemployment benefits they might stay unemployed longer than if they got nothing. But that’s hardly a reason to jettison unemployment benefits or turn our backs on millions of Americans who through no fault of their own remain jobless in the worst economy since the Great Depression. Yet moral hazard lurks in every conservative brain. It’s also true that if we got rid of lifeguards and let more swimmers drown, fewer people would venture into the water. And if we got rid of fire departments and more houses burnt to the ground, fewer people would use stoves. A civil society is not based on the principle of tough love. In point of fact, most states provide unemployment benefits that are only a fraction of the wages and benefits people lost when their jobs disappeared. Indeed, fewer than 40 percent of the unemployed in most states are even eligible for benefits, because states require applicants have been in full-time jobs for at least three to five years. This often rules out a majority of those who are jobless — because they’ve moved from job to job, or have held a number of part-time jobs. So it’s hard to make the case that many of the unemployed have chosen to remain jobless and collect unemployment benefits rather than work. Anyone who bothered to step into the real world would see the absurdity of Barro’s position. Right now, there are roughly five applicants for every job opening in America. If the job requires relatively few skills, hundreds of applicants line up for it. The Bureau of Labor Statistics says 15 percent of people without college degrees are jobless today; that’s not counting large numbers too discouraged even to look for work. Barro argues the rate of unemployment in this Great Jobs Recession is comparable to what it was in the 1981-82 recession, but the rate of long-term unemployed then was nowhere as high as it is now. He concludes this is because unemployment benefits didn’t last nearly as long in 1981 and 82 as it they do now. He fails to see — or disclose — that the ’81-’82 recession was far more benign than this one, and over far sooner. It was caused by Paul Volcker and the Fed yanking up interest rates to break the back of inflation — and overshooting. When they pulled interest rates down again, the economy shot back to life. The Great Jobs Recession is far more severe. It’s continuing far longer. It was caused by the bursting of a giant housing bubble, abetted by the excesses of Wall Street. Home values are still 20 to 30 percent below where they were in 1997. The Fed is powerless because consumers cannot and will not buy enough to bring the economy back to life. A record number of Americans is unemployed for a record length of time. This is a national tragedy. It is to the nation’s credit that many are receiving unemployment benefits. This is good not only for them and their families but also for the economy as a whole, because it allows them to spend and thereby keep others in jobs. That a noted professor would argue against this is obscene. This post originally appeared at RobertReich.org .

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Rob Carmona: New York Times Article Misses Benefits of Job Training Benefits

July 29, 2010

A recent New York Times article: “After Job Training, Still Scrambling for a Job” paints an inaccurate picture of the benefits of job training, and I’d like to illustrate why. STRIVE International , a workforce development non-profit organization, was overjoyed to place 49% of its 2009 New York trainees in jobs during one of the worst recessions in memory. Among our graduates who pursued STRIVE’s vocational skills training, 58% have secured employment and are earning an average wage that is 56% above the minimum wage. In the world of the chronically unemployed, these statistics represent a substantial victory over the cycle of failure and rejection that perpetuates poverty. Our pool of clients is drawn from the hard core unemployed: 30% have been convicted of a felony, 66% are male, and 62% are African-American. Most have no prior employment history. The majority receive some form of public assistance. When the costs to society of sustaining the unemployed are considered, a more accurate picture of the benefits of job training emerges. On average, a year of incarceration costs taxpayers roughly $50,000 per inmate in New York State. A year of TANF cash benefits for a family of 3 is approximately $6,000 – $8,000. When factoring in Medicaid, Food Stamps and housing subsidies, governmental outlays for a family of three can exceed $25,000 per year. STRIVE’s program converts these individuals into economic contributors who will earn starting salaries between $19,000 and $24,000 per year along with medical benefits. Not only will these individuals develop credentials in the workplace and become taxpayers themselves, they will cease to engage in activities that negatively impact our society, while also providing financial security to their families and modeling responsible behavior to their children. We agree that skills training must be closely aligned with available jobs. Hence, STRIVE’s Skill training regimens are drawn from the Department of Labor’s research on growth industries and close collaboration with local companies. Our program is flexible enough to quickly adapt to the requirements of the job market. These are the keys to success that those of us in the workforce development profession follow. An evaluation of job training programs must consider the specific challenges of the population served and the costs to society of not providing vocational training. Further, no program can be evaluated only one year out – STRIVE follows its graduates for a minimum of 2 years and we continue to serve them after that period when they reach out to us for help. A blanket rejection of job training ignores the many examples of success and hope provided by the Workforce Development Community.

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Unemployment Extension: The GOP’s Nearly Unprecedented Deficit Demands

July 19, 2010

Republicans say the federal deficit can’t bear the $33 billion cost of reauthorizing unemployment benefits, so the spending should be offset with cuts from another part of the budget. Democrats are dead-set against doing so and have rejected several GOP proposals to pay for the benefits by taking a chunk of money out of the 2009 stimulus bill. To the 2.5 million long-term unemployed who have prematurely stopped receiving checks, the dithering deficit debate in Washington might seem a tad philosophical. As Senate Majority Leader Harry Reid (D-Nev.) put it on Monday, “They’re trying to understand why at this pressing moment — when jobs are harder to come by than at any other time in recent memory — Congress can’t get its act together to extend emergency insurance, just as we’ve always done with bipartisan backing.” Here’s what’s going on: Since the 1950s, to fight recessions Congress has routinely put in place federally-funded benefits to help people who can’t find work before exhausting 26 weeks of state benefits. Democrats have said during the current debate that because Congress has never offset the cost of the benefits, doing so now would not only nullify the stimulative effect of giving money to people who immediately spend it, it would also fundamentally undermine unemployment insurance in the future. “If you say that you can’t feed people because you don’t have the money right now, that is a real new precedent,” Rep. Jim McDermott (D-Wash.) told HuffPost. The claim has gone largely unchallenged, but Sen. Jim Bunning, the Kentucky Republican who launched the GOP’s deficit crusade back in February, says Democrats are wrong about offsetting benefits. “Historically that is untrue,” Bunning told HuffPost. “Just do your homework. Go back and check historically what they’ve been doing.” HuffPost did its homework, and Bunning’s got a point: Congress has, in fact, offset the cost of unemployment benefits — but Congress has never substantially cut spending elsewhere in the budget to fully pay for them as Republicans now want to do. For instance: In 1991, the elder President Bush signed a bill for 13 additional weeks of jobless benefits at a cost of $5.5 billion, fully offset with tax hikes. The New York Times reported at the time that the extension would be “financed through changes in the tax law that will require higher corporate estimated tax payments, increased taxes on lump-sum pension distributions and a one-year elimination of the personal exemption for high-income taxpayers.” (Bunning, then a member of the House, voted for the deficit-neutral version after voting against the unpaid-for version.) And to offset the cost of additional weeks of benefits added in November 2009, Congress raised the federal unemployment payroll tax (known as the FUTA surtax, per the Federal Unemployment Tax Act), which raised $2.5 billion. “Now, it’s important to note that the bill I signed will not add to our deficit,” said President Obama at the time, in remarks that a Senate Republican aide circulated to reporters on Monday. “It is fully paid for, and so it is fiscally responsible.” However, subsequent reauthorizations in December, March, and April were designated “emergency spending” and not subject to pay-as-you-go rules. Unemployment insurance, like its name suggests, is insurance: benefits are financed through federal and state payroll taxes (FUTA and SUTA). During recessions, Congress gives the unemployed additional weeks of benefits and the federal government pays half the cost, and states can borrow from the federal Unemployment Trust Fund if they run out of money. When the economy improves, states are supposed to replenish their own trust funds and pay back the federal government via unemployment payroll taxes. “Really what is going on here is that there are two ways to understand ‘paid for.’ Unemployment Insurance in the real world is ‘paid for’ by federal and state payroll taxes over a business cycle,” wrote Rick McHugh, a staff attorney with the National Employment Law Project. “In the federal budget world, this does not count as ‘paid for,’ even if in the real world those benefits are going to actually get paid for by UI payroll taxes.” According to the House Historian, Congress has used FUTA surtaxes to offset the cost of benefits during recessions in the 1990s, ’80s, and ’60s, but no offsets whatsoever during the recessions of the ’50s, ’70s, or in 2003. “UI extensions have never been paid for with offsetting domestic spending cuts, even if there have been times when it was ‘paid for’ in the budgetary sense by some sort of FUTA surtax extension or other tax code changes,” wrote McHugh. Republicans today seem unlikely to favor raising taxes to pay for unemployment benefits, as demonstrated by the party’s refusal to offset the deficit impact of reauthorizing the soon-to-expire tax cuts for the wealthy, which the administration estimates would cost $678 billion over ten years. This, plus the fact that deficit hawks outside of Congress don’t consider stiffing the jobless a smart way to reduce the deficit, and Republican side arguments that extended benefits make people lazy, have made it easy for Democrats to point to an ulterior motive. “They look at a crisis for families’ budgets and see an opportunity for their political fortunes,” said Reid. “They think that when unemployment goes up, so do their poll numbers.” Congress has never allowed extended unemployment benefits to lapse at a time when the national unemployment rate is above 7.2 percent. The Senate will vote again on jobless aid Tuesday and Democrats, who will be joined by Carte Goodwin, the man appointed to fill in for the late Sen. Robert Byrd (D-W.Va.), expect to have the 60 votes they need to break the Republicans’ filibuster. The bill will apply retroactively, so the unemployed will be paid the amount they missed during the lapse.

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‘Stimulus Now’: Economists Including Joseph Stiglitz, Alan Blinder Call For More Government Spending

July 19, 2010

As in the 1930s, the economy is suffering a sharp decline in aggregate demand and loss of business confidence. Long experience shows that monetary policy may not be enough, particularly in deep slumps, as Keynes noted. The urgent need is for government to replace the lost purchasing power of the unemployed and their families and to employ other tax-cut and spending programs to boost demand. Making deficit reduction the first target, without addressing the chronic underlying deficiency of demand, is exactly the error of the 1930s.

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Voters Say To Hell With Deficit Reduction, Help The Unemployed

July 14, 2010

Two national polls released Tuesday revealed that registered voters think it’s more important to help the unemployed than to reduce the deficit. Voters are generally wary of government spending to boost the economy, but they nevertheless told ABC News and CBS News that the deficit is no reason not to help the unemployed. Fifty-two percent of voters told CBS that Congress should extend unemployment benefits “even if it means increasing the budget deficit,” including 35 percent of Republicans. Sixty-two percent of registered voters told ABC Congress should extend benefits despite concerns that doing so “adds too much to the federal budget deficit.” In a Bloomberg survey , 70 percent of voters said reducing unemployment is more important than reducing the deficit. But only 47 percent said Congress should reauthorize extended benefits, which in some states provided the unemployed with up to 99 weeks of checks. A poll commissioned by the National Employment Law Project in June found that 74 percent of voters think helping the unemployed is more important than reducing the deficit. Extended benefits for the long-term unemployed lapsed at the end of May because Republicans and some Democrats in Congress insisted that the cost of the jobless aid not be added to the deficit. Though ABC notes that this issue “may be one place for Obama and the Democrats to try for traction,” they haven’t found it. During the past several weeks, Democrats in the Senate have been unable to muster the 60 votes they need to break a Republican filibuster, failing by just one vote in the most recent attempt. Senate Majority Leader Harry Reid (D-Nev.) said Wednesday that Democrats will try again on Tuesday, after the swearing-in of a replacement for the late Sen. Robert Byrd (D-W.Va.). The poll results suggest that most voters agree with economist Mark Zandi, a former adviser to Sen. John McCain, who has argued that helping the unemployed is more important than deficit reduction in the short-term, and that nickel-and-diming the unemployed now could jeopardize the economic recovery. Democrats, including Reid, have said several times in recent weeks that jeopardizing the recovery seems to be exactly what the GOP is trying to do. “It wouldn’t do their electoral prospects any harm for there to be more economic misery in America before the election, let’s put it that way,” said Sen. Sheldon Whitehouse (D-R.I.).

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Unemployment Extension Standoff To Continue For At Least Another Week

July 12, 2010

Senate Democrats will remain one vote short of the 60 needed to reauthorize unemployment benefits for the long-term jobless at least until the end of the week, as West Virginia Gov. Joe Manchin says he wants to wait until the state legislature has cleared up the law on how to fill the Senate seat left behind by the late Robert Byrd (D-W.Va.). Manchin previously said that he could name a replacement as soon as the beginning of the week, but on Monday his office told HuffPost he’d make his announcement by Sunday at the latest and Friday at the earliest. “He intends to make the appointment by week’s end,” a spokesman said. Senate Majority Leader Harry Reid (D-Nev.) has repeatedly said that Senate Democrats need Byrd’s replacement to break the filibuster by Republicans and Nebraska Democrat Ben Nelson, whose approval — had he decided to give it — would have ended the endless debate that has already cut off unemployment checks to some 2.1 million people. By the time Byrd’s replacement is sworn in, more than 2.5 million people who’ve been out of work for longer than six months will have missed checks they would have received had Congress reauthorized the stimulus programs it allowed to lapse at the end of May. President Obama’s 2009 stimulus bill and subsequent legislation gave the unemployed up to 99 weeks of benefits in some states. With the federally-funded extended benefits lapsed, in most states the unemployed are eligible for only 26 weeks of state-funded benefits. The congressional holdup owes to the Republican Party’s and Ben Nelson’s insistence that the $33 billion cost of extending the benefits not be classified as “emergency spending” and added to the deficit — even though the cost of extended unemployment benefits has, throughout the 20th century, always been classified as emergency spending during times of recession. Some Democrats view the new-found deficit concern as an effort to crater the economy and make the November midterm elections difficult for Democrats; others also see it as an effort to fundamentally undermine unemployment insurance. That’s the view espoused by Jon Kyl (R-Ariz.), who on Monday told HuffPost he sees unemployment benefits as a “necessary evil.” Kyl and other Republicans have signaled they will not insist that revenue lost to tax cuts for the wealthy be offset by spending costs elsewhere. It’s a matter of reducing the size of the government: “The money does not belong to the government,” Kyl said. “And yet that’s what this kind of a rigid pay-go rule would assume, that the money belongs to the government and, therefore, if you’re going to deny the government some of that revenue through a tax cut, you have to make the government whole because the government can never lose any money. That would mean that you could never reduce the size of government.”

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Unemployment Extension Standoff To Continue For At Least Another Week

July 12, 2010

Senate Democrats will remain one vote short of the 60 needed to reauthorize unemployment benefits for the long-term jobless at least until the end of the week, as West Virginia Gov. Joe Manchin says he wants to wait until the state legislature has cleared up the law on how to fill the Senate seat left behind by the late Robert Byrd (D-W.Va.). Manchin previously said that he could name a replacement as soon as the beginning of the week, but on Monday his office told HuffPost he’d make his announcement by Sunday at the latest and Friday at the earliest. “He intends to make the appointment by week’s end,” a spokesman said. Senate Majority Leader Harry Reid (D-Nev.) has repeatedly said that Senate Democrats need Byrd’s replacement to break the filibuster by Republicans and Nebraska Democrat Ben Nelson, whose approval — had he decided to give it — would have ended the endless debate that has already cut off unemployment checks to some 2.1 million people. By the time Byrd’s replacement is sworn in, more than 2.5 million people who’ve been out of work for longer than six months will have missed checks they would have received had Congress reauthorized the stimulus programs it allowed to lapse at the end of May. President Obama’s 2009 stimulus bill and subsequent legislation gave the unemployed up to 99 weeks of benefits in some states. With the federally-funded extended benefits lapsed, in most states the unemployed are eligible for only 26 weeks of state-funded benefits. The congressional holdup owes to the Republican Party’s and Ben Nelson’s insistence that the $33 billion cost of extending the benefits not be classified as “emergency spending” and added to the deficit — even though the cost of extended unemployment benefits has, throughout the 20th century, always been classified as emergency spending during times of recession. Some Democrats view the new-found deficit concern as an effort to crater the economy and make the November midterm elections difficult for Democrats; others also see it as an effort to fundamentally undermine unemployment insurance. That’s the view espoused by Jon Kyl (R-Ariz.), who on Monday told HuffPost he sees unemployment benefits as a “necessary evil.” Kyl and other Republicans have signaled they will not insist that revenue lost to tax cuts for the wealthy be offset by spending costs elsewhere. It’s a matter of reducing the size of the government: “The money does not belong to the government,” Kyl said. “And yet that’s what this kind of a rigid pay-go rule would assume, that the money belongs to the government and, therefore, if you’re going to deny the government some of that revenue through a tax cut, you have to make the government whole because the government can never lose any money. That would mean that you could never reduce the size of government.”

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Les Leopold: Why the Idiocy about Unemployment?

July 9, 2010

My wife, a labor economist, is upset with NPR’s “The Take Away” (and many other news programs) for reinforcing the myth that somehow the unemployed are to blame for not having a job. We all should be angry as well because the jobs just aren’t there. In fact, the latest unemployment statistics show that there are five unemployed workers available for every vacant job. Why blame workers when it’s so clear that Wall Street’s reckless gambling caused the jobs crisis? By now, you’d think we’d have buried this issue. But like Dracula it refuses to die. And so, I return to the subject with the hope of driving a stake through its heart and giving it a proper burial. Among the claims we need to put to rest: 1. Extended unemployment benefits are causing unemployment. Extending benefits for the long-term unemployed will only encourage them to sit at home on their extended derrieres and let vacant jobs go begging. What jobs? We’re down 8 million since the start of the Great Recession. We aren’t even creating enough new jobs to keep up with population growth. So what jobs are the unemployed not taking? Every child knows how to play musical chairs. When you take away 8 million chairs, a lot of people are forced to scrounge around looking for seats that aren’t there. Providing nourishment for the chairless is not the cause of the disappearing chairs. It’s just the decent thing to do. Why is this so difficult to grasp? And why are so many people angry at the long-term unemployed and not at the bankers who actually created this mess? Economist Dean Baker suggests that the Republicans are trying to keep unemployment as high as possible right now because they think that high jobless numbers will spell disaster for the Democrats in November. And if we give the unemployed extended benefits, that money will act as a stimulus, generating more jobs. Well, we can’t have that! It’s better for the Republicans if the economy stays in the ditch. But what about Obama and the Democrats? Why aren’t they at the barricades, fighting for the unemployed? They could be flooding the talk shows with a raucous defense of the jobless. They could be putting ads up all over the country, explaining why the long-term unemployed deserve our support. They ought to be ridiculing any politician or pundit who argues against jobless benefits. Where the hell is their outrage? Instead, even as the unemployment crisis continues, the Democrats are pushing austerity and deficit reduction–the financial industry’s pet issue. If the Democrats are so worried about unemployment benefits deepening the deficit they should start plugging that money hole by raising taxes on billionaire hedge funds executives. Just ask the billionaires to pay the same income tax rates as the rest of us, instead of dodging behind the lower capital gains rate. Is that really such a hard sell, Democrats? If the public knew that the top ten hedge fund managers were averaging $900,000 an hour (not a typo) during the worst economic year since the Depression–and paying lower income tax rates than the rest of us–the American public would be outraged. Of course, to push this plan the politicians would need to have the guts to upset billionaires. (Meanwhile, Timothy Geithner is signaling that the Administration will hold down capital gains taxes on the super-rich.) But even the gutless ought to know that blaming the unemployed for unemployment is insane –not to mention incredibly mean-spirited. 2. Unemployment is caused by “structural” problems in the labor markets . Labor markets have to be freed from constraints like decent pensions, a reasonable retirement age, and adequate health care benefits. These public benefits -sometimes known as the social wage — are keeping employers from hiring. So, sorry, Americans, we’ll just have to work longer and harder for less. This chilling proposal, now on the lips of Republicans and Democrats alike, will clearly make the markets happy. But what about the rest of us? Is this grim belt-tightening really going to bring back the 8 million jobs we lost? If we cut the social wage, corporations certainly will save on labor costs and accumulate more cash. But will they productively invest it? Not according to Yves Smith and Rob Parenteau , They argue that corporate America greatly prefers to pocket the cash and use it for gambling on Wall Street: To develop new products, buy new equipment or expand geographically, an enterprise has to spend money — on marketing research, product design, prototype development, legal expenses associated with patents, lining up contractors and so on. Rather than incur such expenses, companies increasingly prefer to pay their executives exorbitant bonuses, or issue special dividends to shareholders, or engage in purely financial speculation. But this means they also short-circuit a major driver of economic growth. 3. The only real jobs are private sector jobs. You see, only the private sector can rescue our economy because the jobs they create spring from consumer supply and demand, not the dictates of corrupt or know-it-all politicians. When you work for the public sector, you’re practically on the dole because your wages come from tax dollars. That’s quasi-socialism. Has anyone noticed that private industry has been on the public dole for decades? We have millions of alleged private sector jobs funded by the Defense Department and through subsidies for industries from sugar to oil, and of course banking. We’ve given so many tax dodges to corporate America that most companies pay almost no taxes at all. The idea of a purely private sector is pure fiction, a soothing fairy tale for Tea Partiers and faith-based, free-market ideologues. Despite all the perks we’ve been giving to corporate America, it’s not at all clear that the private sector will ever again create enough decent jobs to support a middle class society in this country. Right now the economy is supposedly growing, but employment isn’t. So what is growing? Well, the obscene bonuses and pay packages of corporate America and Wall Street — the only growth that counts for our financial elites. We’re at a critical point in the jobs crisis. Nearly 30 million of us don’t have jobs or have been forced into part-time jobs. It’s not like there’s no work to do. We have millions and millions of kids to educate. We desperately need to slash our energy use–and with an army of workers, we could weatherize every home and business in the country. Our bridges and roads will take decades to repair. We need to build an entire national system of efficient public transit. When Wall Street is in trouble, we come to the rescue with trillions in bailouts. We’ve poured hundreds of billions more into two wars. But when it comes to investing in our people to get needed work done, we can’t seem to summon the will or find the cash. There’s a one-sided war going on between financial elites and the rest of us. They’ve engineered the economy to enrich themselves at our expense, with Wall Street taking the lead. The numbers don’t lie: In 1970 the top 100 CEOs earned approximately $45 for every dollar earned by the average worker. By last year, it was $1,081 to one. (See The Looting of America .) There is no economic theory that can explain this obscene gap. It has nothing to do with talent or productivity or even luck. It’s just raw power. And the only thing that financial power understands is countervailing power in the form of a popular mass movement – a movement that only can start once we stop blaming ourselves for the jobs crisis. We have our work cut out for us. Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

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Unemployment Extension Standoff, Day 35: ‘Harsh Reality Has Now Set In’

July 6, 2010

It’s been 35 days since Congress allowed unemployment benefits for the long-term jobless to expire. So far, more than 1.7 million people who’ve been out of work for longer than six months have been left hanging. The 2009 stimulus bill and subsequent legislation had given the unemployed up to 99 weeks of checks. Without the federally-funded extended benefits, which lapsed at the end of May due to congressional deficit concerns , layoff victims in most states are eligible for only 26 weeks of help. Donna Ripley of Stockton, N.J. told HuffPost her 26 weeks ran out on May 29 — one week after the eligibility deadline for the first “tier” of federally-funded benefits. “Needless to say that to miss the deadline because of one lousy week was extremely disappointing,” Ripley wrote. “Silly me was still confident that our lawmakers would do the right thing and pass legislation to extend benefits… harsh reality has now set in. It has been four weeks without a check and times are tough.” Ripley added that she has had much difficulty getting through to a person at the New Jersey Department of Labor and Workforce Development. Marc Katz, a spokesman for the National Association of State Workforce Agencies, said the lapse has resulted in “more calls, more intensity, more confusion” at state labor departments. “Customers are more desperate, more angry, and are less optimistic about the likelihood of Congress passing continued extensions,” wrote a staffer in the Idaho Labor Department in an email to NASWA. “As one would expect, the customers who would have exhausted their latest tier and would have access to an additional tier except for this lapse are the most upset.” Steve Santos of Zion, Ill. said he applied for food stamps and has been “freaking out” since his checks stopped coming. “My 26 weeks from the state ran out as Congress was not renewing the bill,” said Santos, who is 55 and said he lost his job as a retail manager in November. “So because I did not lose my job til the ‘end’ of the recession or file until I absolutely had no choice, I get jobbed out of benefits?” By the time Congress returns from its July 4 recess next week, more than 2.1 million will have missed checks. The House passed a bill to reauthorize the benefits last week; a similar bill failed in the upper chamber due to a Republican filibuster. Senate Majority Leader Harry Reid (D-Nev.) said that as soon as there is a replacement for the late Sen. Robert Byrd (D-W.Va.), Democrats will have the 60 votes they need and the bill will pass. If Reid is correct, layoff victims will be paid retroactively for any missed checks. Without a reauthorization, 3.2 million long-term unemployed will have found themselves ineligible for extended benefits by the end of the month. If Congress fails to act, it will be the first time since at least the 1950s that federally-funded extended benefits have been allowed to lapse with a national unemployment rate above 7.2 percent. “I received my last check on June 24th. If Congress doesn’t approve the extension, I will have no money,” said Shanae Dale of Louisville, Ky, who said she was laid off in December. “I will not be able to pay my rent, car insurance, utility bills or buy groceries. I would like to know how many of the members of Congress can’t sleep at night because the only thing that occupies their minds is finding a job and paying bills.”

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Dancing For My Rent: Unemployed Man Dons Skirt, Dances For PayPal Donations

June 15, 2010

One unemployed man decided that after losing his job at a Big Four bank in March 2009, and sending out resume after resume and sitting through dozens of interviews without getting a job offer in 15 months, he had only one choice left: to put on a skirt and start dancing for money. “I haven’t danced at this level in years,” said Aswad, who goes by one name and said he is 46 and lives in Portland. “I have gigantic silk dance skirts that I use when I dance. They’re bigger than Batman’s cape.” Aswad told HuffPost he’s dancing partly to protest congressional dithering over reauthorizing unemployment benefits, partly to make his rent. He’s uploaded a YouTube video of himself dancing like Michael Jackson while wearing a Utilikilt . He’s asking for $1 donations via PayPal (his blog, www.willdanceforrent.blogspot.com , advertises the not-so-modest goal of raising $100,000). HuffPost asked Aswad how he came up with the decision to “dance for his rent.” “A combination of fear, anger, and my cat,” he said. “You’re laying there with your dog and your cat and you’re worried about your unemployment running out. I’ve been with this cat for 13 years… I live in a small little one-room apartment that costs $500 a month and I have to give that up because a Republican says I don’t want a job… I should not have to give up my cat until she passes of natural consequences.” Oregon happens to be one of the fifteen states in which the unemployed should be able to continue to receive extended benefits despite current lapse in extended benefits programs caused by Congress. Nevertheless, Aswad said he’s struggling to make rent. WATCH the Utili-Dance:

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John Linder: Unemployment Benefits ‘Too Much Of An Allure’

June 10, 2010

Georgia Republican Rep. John Linder suggested Thursday that extended unemployment benefits keep people from looking for work. After complaining that the Democrats’ stimulus bill has failed to keep unemployment from hitting double digits, Linder said, “And even when businesses are willing to hire, nearly two years of unemployment benefits are too much of an allure for some,” said Linder. “The evidence is mounting that so-called stimulus policies rammed through Congress are doing more harm than good.” Linder cited a May 10 Detroit News story about landscaping businesses complaining that potential employees rejected job offers in favor of collecting unemployment benefits. The stimulus and several subsequent bills have given laid-off workers up to 99 weeks of unemployment benefits in some states, including Michigan. The average weekly benefit is $320. Linder is the highest-ranking Republican on the House Ways and Means Subcommittee on Income Security and Family Support, which held a hearing Thursday to address long-term unemployment. Committee chairman Rep. Jim McDermott (D-Wash.) called for testimony from four economists who were unanimous that the extended unemployment benefits are necessary and don’t increase the unemployment rate. Michael Reich, an economics professor from the University of California, Berkeley, for instance, pointed out that there are currently five jobseekers for every available job, adding that the unemployed wouldn’t be any less likely to take available jobs even if they had more than 99 weeks of benefits. “Exits from unemployment to employment become less likely the longer the duration of unemployment, largely because employers generally choose to hire new labor force entrants or unemployed workers with short unemployment spells over those with longer spells.” To wit: online job ads from companies that say “NO UNEMPLOYED CANDIDATES WILL BE CONSIDERED AT ALL.” Jason Taylor, an economics professor from Central Michigan University, took Linder’s view. “There can be no doubt that incentives to obtain new employment have been, and will continue to be, tempered by governmental action which has extended unemployment insurance to many through the end of 2010.” Taylor told HuffPost he had not seen an April report by the San Francisco Federal Reserve, which found that “extended unemployment insurance benefits have not been important factors in the increase in the duration of unemployment or in the elevated unemployment rate.” Republicans and in recent weeks conservative Democrats have held up efforts to reauthorize extended benefits because of their impact on the federal budget deficit, which is expected to top $1.5 trillion this year. The result is that unemployment benefits and several other domestic aid programs, including funds for Medicaid and subsidies for laid off workers to buy health insurance , have lapsed while the Senate dithers over the bill. Meanwhile, hundreds of thousands of people will miss checks they’d been expecting. But the opposition hasn’t been all about deficit spending; the notion that unemployment benefits keep people from taking jobs has been a constant undercurrent. Sen. Judd Gregg (R-N.H.) said the same thing in May. Sen. Jon Kyl (R-Ariz.) said it in March. And many Democrats share that view. Rep. Jason Altmire (D-Pa.) said in May that businesses in his district complained that potential workers refused job offers in favor of staying on unemployment benefits (though he declined to name the businesses). Larry Mishel of the Economic Policy Institute pointed out that only 67 percent of the 15 million unemployed receive benefits. Even if all those people are enjoying the dole, shouldn’t businesses still be able to hire some of the other five million receiving no benefits at all? Rep. Shelley Berkley (D-Nev.) didn’t have much patience for the egghead economists and their proposals for additional weeks of unemployment benefits, job-sharing or workforce retraining. “What would help me a lot is if you all came to Vegas and drank and gambled like crazy,” she said.

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Jobs Crisis Persists As Dems Lose Appetite To Fight It

June 4, 2010

A dreadful unemployment report showing that the private sector barely hired anybody in May suggested Friday that the jobs crisis in America is not really subsiding. What is subsiding, however, is congressional Democrats’ appetite for helping the unemployed. Last week, conservative House Democrats rebelled against a bill to reauthorize several expiring domestic aid programs, including extended unemployment benefits, because the bill would have added $123 billion to a federal budget deficit expected to reach $1.5 trillion this year. Why do more deficit spending, they asked, if the recovery is already underway? “A year ago we were in the midst of the worst recession in 80 years and desperately trying to find ways to climb out of it,” said Rep. Gerry Connolly (D-Va.), president of the freshman class, who credited the stimulus bill with turning the economy around. “We did the right thing and it’s working. Now, a year and four months later, it’s a very different situation. We are now managing a recovery and trying to sustain it.” “We’ve had four straight months of job growth,” said Rep. Jason Altmire, a Blue Dog Democrat from Pennsylvania. “At some point you have to take a step back and look at the relative value of unemployment benefits versus people looking for jobs.” Opposition from conservative Dems delayed a vote on the bill, the American Jobs and Closing Loopholes Act, until the end of the week, and when leadership finally agreed to chop stuff out of the package, including a month of extended unemployment benefits and health insurance subsidies for laid-off workers, it was too late — the Senate had already adjourned for the Memorial Day break. Several programs, including extended unemployment benefits, lapsed Tuesday and won’t be reauthorized until sometime after June 7, when the Senate returns from its vacation. And that, if it happens, may be the final reauthorization: Though unemployment is higher now than when Congress gave the jobless an additional 18 months of benefits, Democrats are unwilling to commit to doing more when the extended benefits expire again at the end of the year. This week, according to the Department of Labor, 19,400 people prematurely exhausted their unemployment benefits because of the lapse. There’s no indication the Senate will move quickly when it returns next week, when the number of premature exhaustions will climb to 323,400. By the end of the month the number will reach 1.2 million. Friday’s jobs report from the Labor Department showed the economy added 431,000 jobs in May, but 411,000 of those came from temporary Census hiring. The unemployment rate fell from 9.9 to 9.7 percent, in part because the labor force shrank as some jobless people gave up looking for work. The number of long-term unemployed inched up by about 47,000, to 6.76 million. That’s 46 percent of the 15 million jobless Americans. It’s the programs to help them that are on the chopping block. Sixty-seven percent of the unemployed received benefits; without the extensions Congress has passed since the recession, only 35 percent of the 15 million unemployed would be receiving benefits. While Congress struggles to preserve the existing programs, no help whatsoever is forthcoming for the hundreds of thousands who have already exhausted the 99 weeks of unemployment benefits available in some states. “Today’s jobs report proves we are still in desperate straits in terms of our jobs recovery,” said Judy Conti, a lobbyist with the National Employment Law Project. “For anybody in Congress to suggest that now is the time to start pulling back our supports for people who are unemployed through no fault of their own proves that they are out of touch with reality at best and heartless at worst.” Progressive economist Dean Baker, co-director of the Center for Economic and Policy Research, said the unimpressive jobs report “actually is good news in that it should shut up the dingbats who thought the economy was recovering just fine.”

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Les Leopold: Are the Unemployed Causing Unemployment?

June 4, 2010

Is it good news that the hiring of 411,000 temporary census workers finally made a small dent in our enormous jobs crisis… at least temporarily? Shouldn’t we now listen more carefully to Senator Judd Gregg of New Hampshire who wants to cut off extended unemployment benefits? He explained it this way on CNBC: Because you’re out of the recession, you’re starting to see growth and you’re clearly going to dampen the capacity of that growth if you basically keep an economy that encourages people to, rather than go out and look for work, to stay on unemployment. Yes, it’s important to do that up to a certain level, but at some point you’ve got to acknowledge that we’re not Europe. ( Senator Judd Gregg on CNBC ) The honorable senator and many other pols and pundits apparently believe that at least some unemployed Americans are just coasting on their unemployment checks, having a bit of a vacation rather than grabbing one of the many jobs being generated in this red-hot recovery of ours. Somehow Gregg and company studiously ignore the fact that there still aren’t enough jobs to go around. As May’s unemployment numbers show, we’re still in a jobs recession, despite the impact of temporary census jobs. More than 29 million Americans are still without work or forced into part-time work — that’s a real jobless rate of 16.6% (BLS U6). Nearly 7 million people have been jobless for over 26 weeks (the “long-term unemployed”) -more than at any time since the Great Depression. We still need more than 22 million new jobs to get us anywhere near full-employment. Senator Gregg is not the only one who is putting the onus on the unemployed. The philosophy behind his statement is shared by many leading governmental officials. (And after all, the Obama administration wanted Gregg to head the Commerce Department. That thought he’s a moderate?) The philosophy they share is this: In the ideal free market, the price of labor determines the amount of employment, or so the theory goes. If the price of labor goes down, there will be more jobs. By cutting the amount and length of unemployment benefits, we effectively lower the price of labor overall, forcing more people to compete for scarce jobs. Fed Chair Ben Bernanke has blamed high unemployment during the Great Depression on “sticky” labor markets–sticky because resurgent unions and New Deal wage and hour laws prevented employers from cutting wages the way they wanted to during a time of falling prices. (Gregg might say that in those days we were way too much like Europe.) In short, the way to create jobs is to get those lazy workers off the dole so that they can help lower wages across the economy. Only then will employers find it worth their while to hire more workers. Interesting theory, but it doesn’t apply to this planet. In fact, during a major economic crash — like the Great Depression and the current Great Recession — the last thing you want to do is reduce the income of working people and the unemployed. With less income, people spend less. And falling consumer demand is the pathway to double-dip recession. The net result: even more job loss and a continued downward spiral — less demand, fewer business sales, fewer jobs needed, lower tax revenues, more public sector layoffs… and down we go. Have Gregg and others forgotten that the Great Recession began on Wall Street? Do they really believe that coddled unemployed workers are to blame for our economy’s failure to produce sufficient jobs? (See the New York Times report, ” Black in Memphis Lose Decades of Economic Gain ” for a graphic picture of how money hungry banks have devastated whole communities, ) How can they be so blind? Actually, they are far from blind — they’re just covering their eyes. No one in power wants to face up to the enormity of the job crisis. And no one really has a plan to get us out of it. Everyone is praying that “the markets” – the gods who appear to rule our world — will recover and start spewing out the tens of millions of jobs we need. No one has the nerve to say that we’ll never get those jobs back — not until the government (either directly or through contractors) starts hiring people en masse to repair our physical and intellectual infrastructures. And of course no one has the nerve to point the finger at those who really are on the dole – to the tune of $900,000 an hour, in the case of our hedge fund elites. Or the Wall Street bonus babies who walked off with $150 billion last year as a direct result of our multi-trillion dollar bailouts. No, it’s a lot safer to beat up on the unemployed — no campaign contributions lost there. It’s time to square up to the jobs crisis. It won’t go away by itself. The key to solving the crisis? Move money from Wall Street to Main Street. The only argument we need to have is over how best to do it. Personally, I’m for massive government investment in renewable energy, conservation, and education (especially for dislocated workers). We could create a million weatherization jobs almost overnight if we had the guts to put a 50 percent windfall profits tax on Wall Street bonus babies and hedge fund billionaires. Not only would we get people back to work, but we’d have better insulated homes and offices, vastly reducing our dependence on oil. But no. Now that we’ve propped up Wall Street and shoveled out some stimulus money, we’re told that we’re broke. Deficit mania is setting in. So forget creating jobs. Besides, the mysterious and all-powerful “markets” won’t like it if government starts playing a more active role. They’ll jack up interest rates to punish any country that fails to cut government spending. The politicians are on their knees praying to the market gods and offering up sacrifices in the hopes that they can get through the next election cycle. Catering the whims of financial markets is madness. Are we living in a theocracy or a democracy? Do we have to grovel before the market gods? Or can we create a world where there is ample work and more harmony with our environment? Who decides? The wrathful gods of Wall Street? Or the people who actually work for a living — or would like to, if only they could find a job? Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

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‘Unemployed’ Have Given $6.9 Million In Political Contributions Since 1990

May 14, 2010

You’d think unemployed people wouldn’t have spare money to throw at the political system… but they do . Since 1990, the unemployed have given $6.9 million to candidates, parties, and political action committees, according to the Center for Responsive Politics. The rate of giving seems to have increased markedly in recent years. In the 2008 presidential election cycle, the unemployed coughed up $2.9 million. In 2006, they donated $1.1 million. From 1990 to 2004, they gave candidates and PACs $2.4 million. So far in the 2010 cycle, which is soon entering the home stretch, the jobless have only given up $323,413. Maybe it’s the recession. The data are based on forms filed with the Federal Election Commission by political committees every quarter after the money has been collected from donors. There’s no menu of options for the occupation field, so people giving money describe themselves the way they see fit. How many of the “unemployed” donors are sharing their last dime with a political campaign? It seems a safe bet that many, if not most, are in a secure financial situation. Lots of donors describe themselves as unemployed/retired or unemployed/homemaker or unemployed/student. Others are more intriguing: What about the woman in Eads, Tenn. who put herself down as “unemployed/aspiring actress,” and donated $2,400 to Kentucky Senate candidate Rand Paul (R) in December? What about the woman in Gahanna, Ohio, who is an unemployed “Jill of All Trades” and spared $250 for EMILY’s List in February? And what’s the story with the woman in New Providence, N.J., who listed her occupation as “UNEMPLOYED WITHIN LAST MONTH= CIGNA” and gave $250 to the Democratic National Committee? HuffPost attempted to reach these people and a dozen others on Friday, to no avail. Are these folks of means or true believers giving away their savings? Browse political donors at the FEC’s website or at the Center for Responsive Politics . Send tips to arthur@huffingtonpost.com.

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Richard (RJ) Eskow: The Case Against Jamie Dimon: Oligopoly, Pain, and Systemic Risk in Five Slides

April 16, 2010

JPMorgan Chase CEO Jamie Dimon knew what he was talking about when he said that “” large corporate America is in very, very, very, very good shape .” It’s a crude and insensitive remark, but an accurate one. Unfortunately, the rest of us are still paying for the party. We bailed out the big bankers once, and if Dimon has his way we’ll probably be forced to do it again. Despite his company’s record first quarter, he’s complaining. He thinks that asking banks to cover the cost of their own potential failure is ” punitive .” Dimon, once known as the “Democrats’ banker,” is throwing more cash to the GOP these days , and in return his wishes are being slavishly carried out by the likes of Mitch McConnell. How dangerous are Dimon and his colleagues? Using data from Robert Litan’s valuable study of derivatives , as well as source data from the Comptroller of the Currency (plus some handy tips from Mike Konczal ), I put together some pie charts. 1. “Too Big to Fail” is Worse Than You Think The misuse of derivatives nearly brought down the economy, and the concentration of these instruments in a few hands forced the government to bail out their holders. Are we any safer today? Here’s the market share held by the top five banks trading in derivatives: No, your eyes aren’t deceiving you. The top five banks hold nearly 96% of the entire derivatives market. And we’re not talking about small numbers here. The projected value of the market in over-the-counter derivatives is over $500 trillion dollars. (In “real” terms it’s $3.3 trillion, which isn’t chump change either. Here’s a good explanation of what figures like these really mean . Short version: It’s a lot of money.) These “too big to fail” megabanks make up what Litan calls the “Derivatives Dealers’ Club.” Led by Dimon, they have the motive and the will to impede meaningful change — and to do an end-run around whatever rules are eventually passed. Who are these “dealers”? 2. Meet the Derivatives Overlords Here are the top four traders in derivatives (number five is much smaller), along with the share of the market they command. Notice that each one of them individually is bigger than “everybody else” put together. If you’re inclined to be impressed by Dimon’s competence (which impresses mainly because basic competence seems to be rare in ban CEOs), look at the other companies in this chart. Ken Lewis at Bank of America and Chuck Prince at Citigroup were textbook examples of runaway in -competence. For that matter, so was Citi’s “strategic” guru Robert Rubin. As for Goldman Sachs, that would be the same Goldman Sachs that just got indicted for securities fraud by the SEC . How safe do you feel? Let’s look at Jamie Rubin’s JPMorgan Chase place in the pecking order: 3. Dimon’s Dangerous Dominance A single bank, JPMorgan Chase, has 44% of the derivatives market. This is the concentrated power and leverage (explain) that Dimon’s fighting to protect. That’s one reason why Simon Johnson calls him ” The Most Dangerous Man in America “. Moreover, as Johnson points out, DImon knows how to present a great PR case for this irresponsible financial structure he represents. He’s the friendly public face of a dangerous and greedy system. And for you Dimon fans out there, remember: He’s not going to be in the job forever. There could be a Chuck Prince or Ken Lewis waiting in the wings even now. 4. Here in the Real World While Dimon’s doing the victory dance – “large corporate America is in very, very, very, very good shape” – how’s the rest of the country doing? These folks aren’t doing so well: Long-term unemployment is at levels we haven’t seen since the Great Depression. These 6.5 million people face a future where they may never be able to return to the lives they once enjoyed. 5. Who Are the Unemployed? (source for this slide and the one above: Bureau of Labor Statistics) 44% of all jobless people meet the definition of “long-term unemployed.” Many of these people are too old to realistically start over. Their lives have been ruined. As for the wonderful state of large corporate America that Dimon celebrates, it came in part because Fortune 500 companies laid off more than 800,000 people in 2009 . For these people, life is “very, very, very, very” grim. That’s the damage caused by greed. Here’s the danger: George Soros says another, bigger crash is coming . (via ZeroHedge) Three of the Federal Reserve’s regional heads say that we need to do something about “too big to fail” banks . The centralization of risk and power is leading us right into another disaster. We need to get the banking oligopoly under control. But Jamie Dimon is fighting back tooth and nail. And that’s why we must fight Jamie Dimon. ____________________________ Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America’s Future. This post was produced as part of the Curbing Wall Street project. Richard blogs at : No Middle Class Health Tax A Night Light Website: Eskow and Associates

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U.S. Senate Moves Toward Passage of Bill Extending Benefits for Unemployed

April 13, 2010

By Brian Faler April 13 (Bloomberg) — The U.S. Senate took a step toward reinstating unemployment benefits to tens of thousands of Americans whose aid was ended following a partisan dispute over how to pay the cost. Legislation providing a one-month extension of the benefits cleared a procedural hurdle 60-34 yesterday, and Democratic leaders aim for a final vote by the end of the week. The measure, designed to buy lawmakers time to debate a longer-term extension, was passed by the House last month. Benefits for thousands expired April 5 after Republicans blocked an extension because its $9 billion cost would be added to the government’s budget deficit, which reached a record $1.4 trillion in the fiscal year that ended last September. Republicans called for the cost to be offset by cuts elsewhere in the budget, while Democrats argued that fighting the deficit shouldn’t come at the expense of the jobless. About 212,000 Americans will see their benefits disrupted for every week the measure is delayed, according to the National Employment Law Project . The bill would extend provisions offering as many as 99 weeks of assistance to the unemployed. The extension would be retroactive to the day the benefits ended. The measure would also renew subsidies to help unemployed people buy health insurance and forestall a 21 percent cut in Medicare reimbursements to doctors. Republicans this year have twice blocked otherwise routine extensions of jobless benefits because of the cost. The legislation includes $1 million to provide back pay to 2,000 Transportation Department workers who were briefly furloughed because of the previous delay. To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net .

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Senate Passes Bill To Provide Jobless Aid, Tax Breaks

March 10, 2010

WASHINGTON — The Senate voted Wednesday to extend key pieces of last year’s economic stimulus measure, including help for the jobless and money to help financially strapped states pay for health care for the poor. The 62-36 vote came over protests from conservatives who say the bill adds too much to the $12.5 trillion national debt. Six Republicans joined all but one Democrat, Ben Nelson of Nebraska, in voting for the bill. The plight of the jobless and the political power of an annual package of tax breaks powered the measure through the Senate, even though it would add about $130 billion to the budget deficit over the next year and a half. “The bill is not a second stimulus, but it’s going to deliver badly needed relief to Americans who are hurting,” said Sen. Chuck Schumer, D-N.Y. “It would be cruel, even inhumane, to tell these people that their unemployment benefits expire.” The measure is the second piece of the Democrats’ much-touted “jobs agenda” to pass the Senate this year, with more elements promised, such as help for small businesses suffering from a credit crunch. Concern over out-of-control budget deficits are a big challenge to the success of the agenda. In fact, the bill chiefly resurrects elements of the stimulus bill that expired at the end of last year, including more generous unemployment benefits, health care subsidies for the jobless, and Medicaid aid to cash-starved states. They have been temporarily extended twice but would again expire at the end of this month. “This bill helps small businesses get the loans they need to grow and hire, provides tax relief that companies need to support new research and development jobs of the future, and extends relief to Americans looking for work,” President Barack Obama said in a statement Wednesday evening. The vote sends the measure into talks with the House, which is wary about some Senate provisions included to defray the measure’s impact on the deficit since they may want to use such “offsets” to help finance an overhaul of the health care system. Democrats had also hoped to finish work this week on a far smaller job-creation measure blending additional highway spending with new tax breaks for companies that hire the unemployed. Now, it’s looking like a final vote won’t come until next week. Wednesday’s larger bill would provide unemployment benefits of up to 99 weeks in many states for people mired in joblessness as the economy slowly recovers from the worst recession in decades. The measure illustrates the great extent to which direct help for the jobless and the poor makes up a large portion of Democrats’ election-year agenda on jobs – and threatens to squeeze out other items amid concerns about a budget deficit. The sweeping bill cleans up a host of unfinished congressional business from last year that languished as the Senate focused on health care. It would also prevent doctors from absorbing a 21 percent cut in Medicare payments and extends through December a generous 65 percent subsidy of health insurance premiums for the unemployed under the COBRA program, at a cost of $10 billion. Wednesday’s larger bill also provides the annual extension of $26 billion worth of tax breaks for businesses and individuals that are popular with senators in both parties and swung support from business lobbyists behind the legislation. The $59 billion cost of providing additional months of unemployment checks – the core benefit is 26 weeks – is added directly to a budget deficit expected to hit $1.6 trillion this year. Unemployment insurance typically provides recipients with about one-third of their lost wages. But Democrats said it would be heartless to cut off unemployment benefits to the long-term jobless and contended that the benefits inject demand into the economy, helping to lift it. Federal cash to help states with Medicaid adds about $25 billion more to the legislation, with the money helping states not only keep poor people on the program but in many cases free up resources to forestall layoffs of teachers, police and other public employees. The tax breaks include a property tax deduction for people who don’t itemize, lucrative credits that help businesses finance research and development and a sales tax deduction that mainly helps people in the nine states without income taxes. To defray the impact on the deficit, the measure helps the Internal Revenue Service crack down on abusive tax shelters and would block paper companies from claiming a tax credit from burning “black liquor,” a pulp-making byproduct, as if it were an alternative fuel. Other tax breaks include a deduction for college tuition for couples making less than $160,000 a year, and one for teachers who use their own money to buy school supplies. There is a tax credit for community development agencies that invest in low-income neighborhoods, as well as a tax break for restaurant owners and retailers who remodel their stores. There are several energy-related credits, including one for installing energy-efficiency improvements to new homes and a $1 per gallon credit for the production of biodiesel.

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U.S. Unemployment Rate Peaked at 10.1% in October, Economist Achuthan Says

March 8, 2010

By Vincent Del Giudice and Thomas R. Keene March 8 (Bloomberg) — History indicates U.S. joblessness in coming months won’t exceed the quarter-century high reached in October, said Lakshman Achuthan , managing director at Economic Cycle Research Institute in New York. Unemployment unexpectedly held at 9.7 percent in February, figures from the Labor Department showed last week. The rate climbed to 10.1 percent in October, the highest level since 1983. “You have never had a four-tenths-of-a-point decline in the rate and then see it go up to a new peak” since the end of World War II, Achuthan said today in an interview on Bloomberg Radio. “The unemployment rate already peaked.” The reason the improvement does not “ring true” is that long-term unemployment remains high, Achuthan said. The skills of many unemployed Americans do not match the current demands of the workplace, he said. “The long-term unemployed, people who have been unemployed for more than six months, that’s 40 percent of the people out of work,” said Achuthan. Other workers have been more fortunate, as suggested by the decline in the unemployment rate and the slower pace of job cuts from a year earlier, he said. “The part you don’t see is that 60 percent of the unemployed, people who are shorter-duration unemployment, people who lost their job then in another month or two get another job, they’re seeing the jobless rate fall faster than the other two recoveries,” Achuthan said. Skill Sets The reason they are able to find work is “beyond just education,” he said. “Their skill sets fit what people want right now and the ones that are long-term unemployed are mismatched. They could be people who were associated with the bubbles, housing and credit, or they could be in manufacturing.” On March 5, the Labor Department also reported employment declined less than forecast as payrolls dropped by 36,000 workers. Employment fell in construction as blizzards crippled parts of the Atlantic seaboard. Temporary employment increased, as did manufacturing, according to the government statistics. Still, the underemployment rate , which includes part-time workers who’d prefer a full-time job, rose last month to 16.8 percent from 16.5 percent in January, the Labor Department reported. (In the U.S., hear Bloomberg Radio on satellite radio: Sirius Channel 130 and XM Channel 129. In New York City, tune to WBBR 1130 on the AM dial.) To contact the reporters on this story: Vincent Del Giudice in Washington vdelgiudice@bloomberg.net ; Thomas R. Keene in New York tkeene@bloomberg.net .

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Michael J. Panzner: Businesses Cutting the Growth Cushion

February 13, 2010

Many mainstream analysts believe it won’t be long before things return to “normal.” But they are deluding themselves, especially as far as the job market is concerned. For one thing, it now seems pretty clear that the economy that existed before the financial crisis hit had been artificially pumped up by years of cheap money and unsustainable levels of debt. Those factors also led to significant malinvestment and allowed some parts of the economy — think finance and real estate — to grow too large relative to others. Now that the bubble has burst, many of the jobs that used to exist

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Reid Scales Back Job-Stimulus Measure to Four Items Including Tax Holiday

February 11, 2010

By James Rowley and Brian Faler Feb. 11 (Bloomberg) — Senate Majority Leader Harry Reid scaled back job-creating legislation to four items including a tax holiday for companies that hire the unemployed. Also to be included in the measure, Reid told reporters in Washington today, is an extension of the Build America Bonds Program, a provision allowing small businesses to write off some expenses quickly, and an extension of federal highway construction funds. Reid said other elements of an $85 billion package outlined earlier today will be taken up in subsequent legislation. These items include an extension of unemployment benefits set to expire at month’s end and a subsidy to help laid-off workers buy health insurance from their former employer. “The American people need a message,” Reid said. “We don’t have a jobs bill, we have a jobs agenda. We’re going to move forward on that jobs agenda.” Asked if Republicans would support the stripped-down version of the jobs legislation, Reid told reporters, “Republicans are going to have to make a choice” whether to support “a bipartisan bill that will create jobs.” To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

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Unemployment Rate Drop Is Good News But It’s Likely To Rise Again

February 5, 2010

The surprising drop in the unemployment rate released Friday may seem like good news, but experts expect the rate to rise in the months ahead. Among the most vulnerable to a prolonged drought of jobs are the long-term unemployed. Research shows that the longer someone is out of a job, the longer it takes to find a new one. Nearly half of the unemployed have been out of work for at least six months. Per the National Employment Law Project: The average duration of unemployment has hit another record high of 30.2 weeks, with a historic 41.2% of the unemployed remaining out of work for six months or longer. 11.5 million Americans are collecting some form of unemployment insurance. During the most recent previous peak in long term unemployment in 1983, a comparatively low 26% of unemployed workers were out of work for six or more months, and the average duration of unemployment peaked at 21 weeks. With so many out of work for so long, the group says more action is needed. The executive director, Christine Owens, said: The continued high rate of long term unemployment reflected in January’s jobs report underscores the urgent need for action from Congress to maintain the lifeline of jobless benefits for millions of unemployed workers caught in the undertow of this recession. While the report has glimmers of relief for workers, the Labor Department today released payroll jobs numbers show that we have lost a staggering 8.4 million jobs. With the jobs hole this deep, Congress and the Administration must bravely stare into the headwinds of budget concerns and continue to fortify the safety net throughout this year. Any faltering of their support will bring disaster for families, communities and the economy. Lawrence Mishel , president of the Economic Policy Institute, offered his take on the unemployment figures : This was a bizarrely confounding report. We learned from employers that the employment plunge following the financial crisis, as of March 2009, was 930,000 jobs steeper, and another 433,000 jobs were lost by December. Yet, despite being in a 1,363,000 larger job hole, the report from households was very positive: unemployment fell from 10.0 to 9.7 with employment up 784,000 from December and those involuntarily working part-time plummeted by 849,000. Despite all this, I assume the unemployment rate will resume its steady upward growth in the months ahead. Like Mishel, Goldman Sachs also forecasts a worsening jobs situation: analysts at the most profitable firm in Wall Street history said in December that they expect the unemployment rate to hit 10.75 percent by early 2011, a full percentage point higher than the current rate. Meanwhile, the Obama administration forecasts a 10 percent average unemployment rate this year, dropping to 9.2 percent in 2011, according to the administration’s budget request released earlier this week. But the rate will remain stubbornly high. The unemployment rate in 2008 , 5.8 percent, won’t be matched again until roughly 2015-2016, according to the administration’s forecasts . “Unfortunately, even with healthy economic growth there is likely to be an extended period of higher-than-normal unemployment lasting for several years,” the administration noted.

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Report: Housing Prices Could Tumble Again If More Foreclosures Aren’t Prevented

December 18, 2009

Foreclosure prevention efforts need to become vastly more effective or housing prices will resume their tumble, according to a new report by Credit Suisse analysts. The report concludes that some 4.2 million homes are currently estimated to be heading into foreclosure next year, and that of those, three out of four — or 3.2 million foreclosures in all — need to be prevented to stabilize the housing market. So far, government and private success rates have been nowhere close to that. About 31,000 homeowners have received permanent relief under the Obama administration’s mortgage modification program. Part of the administration’s $75 billion effort, the plan aims to help troubled homeowners modify their mortgages into sustainable monthly payments relative to income. About 700,000 homeowners are enrolled in three-month trials. The administration said the Home Affordable Modification Program (HAMP) would help three to four million homeowners. A government watchdog has publicly questioned numerous times whether that’s achievable, given the performance to date and the plan’s design. For example, the plan requires that homeowners have an income. With 10 percent unemployment, many experts have questioned whether the program can help the unemployed stay in their homes. “Current performance statistics on HAMP are quite disappointing in the above context,” the Credit Suisse report notes. “However, multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods are likely to keep volume of foreclosure sales under check.” The analysts argue that there are early signs of recovery. Thanks to a decline in foreclosure sales from their winter highs, the homebuyers tax credit, and “record high affordability levels,” housing prices have begun to stabilize. But for a recovery to take hold next year, foreclosure sales will have to decrease even more. The analysts note that if foreclosure sales represent some 25-30 percent of all home sales next year, a decline from current levels, then home prices could see an uptick. The analysts expect the Obama administration to step up its efforts to make that goal a reality. “We anticipate multiple rounds of government attempts to achieve foreclosure prevention for those who fall through trial mods by lowering the bar or directing them towards alternative foreclosure prevention programs,” they wrote. Underscoring the importance of preventing foreclosures, the Credit Suisse report notes: “Home price stabilization has primarily resulted from decline in share of foreclosure sales.” If those start to creep up, this year’s gains in stabilizing the housing market could evaporate. Read the report below: Credit Suisse Report –

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Obama Set to Sign Bill Extending Homebuyer Credit, Unemployment Benefits

November 6, 2009

By Brian Faler Nov. 6 (Bloomberg) — President Barack Obama is set to sign into law a bill that extends $8,000 tax credits for first- time homebuyers and unemployment benefits. The measure also provides tax refunds to money-losing companies. The House approved the legislation yesterday on a 403-12 vote; the Senate passed it 98-0 on Nov. 4. White House spokeswoman Jen Psaki said Obama will sign the bill today, the same day the Labor Department is slated to release an update on the nation’s jobless rate. The measure extends until April 30 the homebuyers tax credit that would otherwise expire at the end of this month. “The homebuyers’ credit has helped pave the way for stabilization in the housing market and contributed to three consecutive months of rising home prices,” said Representative Jim McDermott , a Washington Democrat. “Its extension will continue to make homeownership more affordable and bring confidence to a housing market and economy that remain fragile.” The jobless will get as many as 20 additional weeks of unemployment assistance, depending on where they live. Companies will be given expanded ability to apply losses to previous years’ income, allowing them to qualify this year for $33 billion in tax refunds, according to Congress’s Joint Committee on Taxation. The legislation also includes a tax break to help victims of Bernard Madoff’s multibillion-dollar Ponzi scheme. The bill, the first major expansion of provisions in February’s stimulus package, is estimated to funnel $45 billion into the economy in the 2010 fiscal year. Other Extensions With unemployment projected to average 9.85 percent next year, according to a Bloomberg survey of economists, lawmakers are considering spending billions more to extend other elements of the stimulus package. Among them are subsidies to help the unemployed buy health insurance. McDermott said lawmakers will probably move to approve additional extensions of jobless benefits to help the unemployed through much of next year, at a cost he predicted could reach $80 billion. More than 1.4 million Americans have claimed the homebuyer credit at a cost so far of about $10 billion, according to the Treasury Department. Under the new bill, couples earning up to $225,000 a year and individuals earning up to $125,000 will be eligible for the credit. That’s up from the current $75,000 limit for individuals and $150,000 for couples. Current Homeowners The bill also will allow homebuyers who have owned their prior residence for at least five years to receive a $6,500 credit, an expansion of the program. Those who sell their new home or no longer use it as their main residence within three years would have to repay the credit. Homes worth more than $800,000 wouldn’t be eligible. A Nov. 3 Goldman Sachs Group Inc. report said most of those who claim the credit would have bought homes without the program. It estimated the initiative spurred 200,000 home sales that otherwise wouldn’t have occurred. Extending the credit to those who already own homes won’t reduce the excess inventory of housing blamed for the slump because “every buyer taking advantage of the move-up credit would necessarily be a seller,” the Goldman Sachs report said. It said the plan may increase housing prices by 1 percent because “sellers are likely to incorporate a fraction of the credit amount in their sale prices.” Economic Boost House Majority Leader Steny Hoyer , a Maryland Democrat, called the jobless provision “an investment that pays off for all of us” because “money provided by unemployment insurance quickly goes into necessities and boosts local economies.” The legislation would provide 14 additional weeks of unemployment benefits in all states, plus another six weeks in states with jobless rates topping 8.5 percent. More than one-third of the nation’s unemployed have been out of work for at least six months, according to the Labor Department. About 1.9 million Americans will exhaust their benefits, which average $300 per week, by the end of this year without the bill, the agency said. Representative Kevin Brady , a Texas Republican, said the provision allowing tax refunds for companies will provide “an immediate cash infusion to struggling businesses” and “free up additional payroll to help get more Americans back to work.” The provisions were recommended by White House economic adviser Lawrence Summers , said Representative Richard Neal , a Massachusetts Democrat. ‘Corporate Giveaway’ Representative Lloyd Doggett , a Texas Democrat, criticized the plan as a “corporate giveaway” to “those with good lobbyists.” If it were a good idea, he said, why not offer it “to workers who have lost their jobs and give them back some of the taxes that they paid when they had a job?” The bill won’t add to the budget deficit, according to congressional estimates, in part because it would be financed by delaying until 2018 a tax break for multinational corporations related to taxes they pay abroad. The legislation would also extend a 0.2 percent employer payroll surtax that otherwise would have expired at the end of the year. That provision drew complaints from the U.S. Chamber of Commerce , the National Federation of Independent Business and other business groups that said in a letter it “would increase the tax burden on employers just as they are deciding whether to add employees in 2010 and 2011.” The bill is H.R. 3548. To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

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Dan Dorfman: Jobs Story Could Turn More Gory

October 18, 2009

Hey, with the economy perking up, the Dow recently sprinting above 10,000, a sizzling jump of more than 50% from its March low, and growing talk out of Washington that we’ll have a national health bill before year end, things are slowly starting to look honky dory again to a lot of folks. Not, though, to the 15.1 million Americans who are no longer getting paychecks, nor the residents of the growing number of states being stung by double-digit unemployment rates. Nor for that matter the hefty share of the unemployed population (35.6%) that is out of work six months or more, and the 571,000 people who disappeared from the work force last month because they couldn’t find jobs. You’ve got to be a relative of Denny Dimwit to ignore this spreading economic cancer. Or, for that matter, give any legitimate credence to the administration’s non-stop rah-rah public relations campaign that the economic horror story is all but over. Not everyone agrees with me. Frequently, when I bring up the rising number of job losses to some economists and market pros, I come out a loser, often being tagged as an ignoramus for failing to recognize that unemployment is a lagging economic indicator, not a leading economic indicator. As one well-publicized economics professor put it to me in stinging language the other day, “Why do you ask me about unemployment? It only makes you look uninformed and stupid.” Continuing, he went on to say, “Wake up; All you have to do is read a newspaper.” Everyone, he observes, already concedes unemployment will go somewhat higher, but it should peak some time in the first half of next year at a little over 10% as the economy takes a turn for the better. (The general view is it will peak in the range of 10.3% to 10.5%, versus it’s current rate of 9.8%.) The professor’s parting biting shot: “Don’t quote me because I don’t want anyone to know I even spoke to you.” He also reminded me that, “In case you have any memory or hearing problems, unemployment is a lagging economic indicator.” Granted, this has been the case in the past. But a couple of pros — both of whom see a much darker jobless picture than most people expect — suggest it will be dramatically different this time out. In other words, they say, the time-worn view that unemployment is a lagging economic indicator (usually peaking about six months after the end of a recession) is no longer applicable because of the prospects of many more layoffs stemming from a much weaker than expected recovery. “We’ve entered a new era of much higher chronic joblessness, which denotes a long-term period of economic stagnation,” says Martin Weiss, the head of Weiss Research in Jupiter, Fla., who notes the news on the unemployment front remains pretty grim and is likely to remain that way. For example, he points out there are now five people competing for every available job. Further, if you factor in part-time workers who can’t find full-time jobs, as well as those who have given up looking for work, the official unemployment rate is no longer 9.8%, but nearly double that at 17%. Taking this exercise one step further, he notes that if you count both the unemployed and the discouraged workers (anyone willing to work, but who has given up looking for up to a year), the jobless rate then climbs to 21.4%. To Weiss, this all means “we’re not going to follow the recovery patterns that we’ve seen in past recessions and the lag time will be far more stretched out than it used to be.” That’s also the thinking of Madeline Schnapp, economics director of TrimTabs Research, a West Coast liquidity tracking service partially owned by Goldman Sachs. Over the past 25 years, she points out, recessions have resulted from industry overexpansion and inventory buildups and reductions. Not this time, she says. The latest downturn was caused by excessive credit and consumer deleveraging. Factor in, as well, the current woes and you hardly have a solid foundation for an economic recovery, Schnapp says. Those specific woes: –9.8 million workers are collecting unemployment. –Another 3.8 million are collecting emergency unemployment benefits (a reference to unemployed people who have been out of work for more than 26 weeks). –5.2 million homeowners who are no longer paying their mortgages, and contracting income, –Income is still contracting rapidly, with wages and salaries off 4% to 5% year over year. To Schnapp, it all adds up to declining consumption, mounting job losses and an economy that won’t grow. That worrisome trio struck me as a trio of Halloween trick and treaters dressed up as Frankenstein, Dracula and the Wolf Man. In terms of jobs, Schnapp looks for a 10% unemployment rate in November and an ensuing jump to 11% by next summer. That would raise the number of unemployed at that point by another 1.6 million to about 16.7 million. In viewing the most recent unemployment data, some market observers who follow the job figures point to a sunny note — namely, that the number of people filing unemployment claims over the past week dropped by 10,000. But these observers, Schnapp notes, are ignoring the fact that the number of people filing for emergency benefits in the same period rose by 16,000. Given her expectations of surging job losses, which means reduced consumption, Schnapp sees only sluggish economic growth. For the third quarter, she expects a 2.7% spurt in GDP, largely because of the stimulus from the cash for clunkers program. But for the current quarter, she looks for a marked slowdown, with a puny GDP gain of from 0.5% to 1%. Looking to next year, Schnapp pegs GDP, if we’re lucky, at between flat and up 1.5%. And if we’re not lucky, she adds, maybe a decline of 1.5%. As Schnapp sees it, the only reason we haven’t seen a collapse in consumption is because the 9.8 million people collecting unemployment and the 5.2 million households not paying their mortgages are spending money on some things. Many consumers, she notes, are viewing things as getting better, including the government bailed-out banks. But she feels that’s a blindsighted view, arguing that the big banks are in for a lot more pain going forwarded. They’re piling more debt on top of toxic debt, which is hardly the right prescription, she notes, for turning around their operations, in turn enabling them to resume lending and giving the economy a renewed shot in the arm. If our jobs bears are right, the bottom line seems more like the bottom of the economic barrel since a consumer who is not earning any money is in no shape to spend us back into prosperity. And such a dismal condition, the folks at TrimTabs tell me, is not what bull markets in stocks are all about. In any event, if you’re looking for a job, don’t hold your breath. Write to Dan Dorfman at Dandordan@aol.com

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Hiring Tax Credit: Support Builds For Proposal Rewarding Employers For Hiring, More Hours

October 6, 2009

The idea of a tax credit for companies that create new jobs, something the federal government has not tried since the 1970s, is gaining support among economists and Washington officials grappling with the highest unemployment in a generation. The proposal has some bipartisan appeal among politicians eager both to help their unemployed constituents and to encourage small-business development.

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Unemployment in U.S. Now Lasts Longer Than State Benefits: Chart of Day

October 2, 2009

By Michael McKee and Alex Tanzi Oct. 2 (Bloomberg) — For the first time, the average amount of time it takes fired employees to find a new job exceeds the length of their standard unemployment benefits. The CHART OF THE DAY shows the average duration of unemployment is now 26.2 weeks, longer than the 26 weeks of state benefits normally provided to workers who lose their jobs. It’s the first time that has occurred since the Bureau of Labor Statistics began keeping records in 1948. The jobless rate rose to 9.8 percent in September, while payrolls fell by 263,000, a Labor Department report showed today in Washington. Congress has extended unemployment benefits twice — first in July 2008 and then as part of the stimulus bill signed in February. Currently, the unemployed are eligible for a total of 46 weeks of benefits, and those in states where the unemployment rate is more than 6 percent are eligible for 59 weeks. Those additional benefits expire at the end of the year, and about 1.3 million people will exhaust them by then, according to the National Employment Law Project. An extension of benefits, which was passed by the House of Representatives, is being held up in the Senate by lawmakers who object because their states would be excluded from the plan. The purple line on the chart shows 5.4 million people have now been out of work for at least 27 weeks, representing 35.6 percent of the total number of unemployed, the most since the agency began keeping statistics in 1948. (To save a copy of the chart, click here.) To contact the reporter on this story: Michael McKee in New York at mmckee@bloomberg.net . Alex Tanzi in Washington at atanzi@bloomberg.net

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Unemployment: An Awful Waste Of Time

August 27, 2009

Unemployment can be lonely and frustrating. No fellow commuters, no coworkers. Lots of people don’t know where they went wrong — because they didn’t actually do anything wrong. Fourteen million Americans are currently jobless. Brian Gagnon of Fort Worth, Texas, wrote to say he agreed with an Aug. 17 item that said “people are relieved when they see that they’re not alone in the world of joblessness.” “I don’t think misery actually loves company,” Gagnon wrote, “but there is some comfort knowing that other competent and productive folks are experiencing the hollow ache in the pits of their stomachs the same as me.” Gagnon wrote that he lost his job from the local CBS affiliate station in March 2008 in a mass layoff. He suspected that the company would have been glad to get rid of him because he cost the company “a bundle” in health insurance, on account of his wife’s auto-immune disease. He got a decent severance and COBRA benefits. He noted that a few weeks later, CBS CEO Les Moonves was awarded a $9.5 million dollar bonus . “But I’m not bitter or anything,” Gagnon added. No, he’s bored. “Everyday I sit at this computer trolling job sites and I’m more than kind of sick of it,” he wrote. “I’ll apply for everything that I think I can do but now I’m also running into the age thing. I’m 54 and most businesses look at me and think I’m too expensive. I know it’s a cliché to say they can hire a 25 year old cheaper than me and for that I apologize, but there is a kernel of truth to it.” The worst part about long-term unemployment, Gagnon said, is that it feels like such a waste of time. “You get into a malaise of ‘I’m comfortable not doing anything,’ and that’s not how you’re wired,” he said in a phone interview. “There’s still a part of me that [feels like] every afternoon I should be getting ready to go to work. I’ve always said that the day I care about who wins on The Price is Right , just shoot me.” Gagnon mentioned that he once briefly pursued an MBA and had Dick Armey as an economics professor. He said he took two things from his class. “The first was that I no longer wanted to be in school,” he said. “The second was something he said in class. It was to the effect that a fair measure of someone’s worth to society was the value of that individual’s paycheck. I kind of think that is how a lot of unemployed people feel. No paycheck, no worth.” Gagnon doesn’t really let it get to him. Though he is one of nearly 1.5 million people whose unemployment benefits will expire at the end of the year, he remains confident that he and his wife will be fine. They live frugally and they’ll keep their house. She’s got a job, and is studying to become a paralegal. Gagnon mentioned that she’s got a 3.904 GPA, and that he’s proud of her. “We don’t do a lot, but we get by,” he said. Click here to read more stories about regular people living the unemployed life. Got a story of your own? Share it! Email arthur@huffingtonpost.com .

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