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Protecting the Jobless
Congressional Democrats—and some Republicans—have supported an extension of benefits. The Bush administration has resisted, arguing that Congress has never before lengthened the benefits with such a low overall unemployment. True. When benefits were extended in early 2002, the unemployment rate was 5.7 percent. In 1991 the extension occurred at 7 percent, and in 1982 it was 10.1 percent. But so what?
What's wrong with this argument is that it ignores basic changes in U.S. labor markets. Over the past two decades, American businesses have gradually toughened their hiring and firing policies. In recessions, they resort more to permanent dismissals as opposed to temporary layoffs; in recoveries, they're more cautious in adding new workers. After both the 1990–91 and 2001 recessions, job creation didn't resume for many months; indeed, after the 2001 slump, payroll employment didn't reach its prerecession peak for more than three years.
It's harder to find a new job. Average spells of unemployment have slowly lengthened. The increase since 1960 has been about six weeks, estimates economist Gary Burtless of the Brookings Institution. "It's more likely you'll exhaust your benefits today than in the 1950s and '60s," he says. That's especially true in a slump, when the share of those unemployed for more than six months rises to a fifth or more.
Congress ought to send the president a stand-alone extension of unemployment benefits. It would be hard to veto. Compared with the $152 billion price tag on the economic stimulus program earlier this year, the cost is slight, and the added protections would go to innocent victims of the downturn.
But this may be a fantasy. It seems equally plausible that the extension would be added to an expensive extravaganza of other spending increases (construction projects, grants to states, energy subsidies) and tax breaks labeled "Stimulus II." The whole package would be a partisan sledgehammer designed to show that Democrats care about the economy and Republicans don't. It could then become easily mired in partisan politics, going nowhere and demonstrating again the long odds against common sense.
© 2008
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Member Comments
Posted By: leener @ 05/06/2008 11:42:00 AM
Comment: My 'benefits' are about to run out, & despite all the resumes sent, phone calls made, & searching, I've only managed to snag ONE interview. My father put it very well, "We're not in a recession, IF you have a job".
Posted By: summer4077 @ 05/06/2008 11:39:23 AM
Comment: I know that people living pay check to pay check may find a 3 week wait difficult (not counting the first week b/c income was there), but really 3 weeks for a check is not that bad. When you start a job that's on a 2 week pay cycle, you wait 4 weeks before you receive your first pay check. Considering how slow the government runs, 3 weeks isn't all that bad. It must be frustrating for families that are on a tight budget, though.
I think that's the problem--too many people are living too close to the edge. Get a secondary source of income, spend more frugally, and try to save for at least 3 months of living expenses. That way, the 3 week wait would be a minor annoyance instead of a financial catastrophe. I'm only 25 and have $3k saved in case I get laid off. I have $100 automatically transferred each month from checking to savings. I haven't missed it at all (I don't make all that much, either) and now I have a little bit of breathing room after 2.5 years of saving. People shouldn't buy houses they can't afford, have more kids than they can afford, buy cars and toys they can't afford, take vacations they can't afford, etc etc. I know there are some circumstances where they truly can't make ends meet, but the majority is people spending frivilously. You ALWAYS need to think ahead. You can't guarantee you will always have a job and must put aside savings.
Posted By: Aziline @ 05/06/2008 9:41:42 AM
Comment: When my husband was laid off it was a month before we saw an unemployment check. He wasn't eligible the first week since he had 4 days of vacation paid out, the next week was his "probationary period". Finally he was elegible on week 3 but we didn't see the check until the end of week 4. We have been through all of this but I can only imagine the problems this causes for people living pay check to pay check. Maybe it needs to be extended for now but we really need to fix how long it takes to get a check.