Over the last weekend, a federal program of supplemental unemployment insurance that provided 1.3 million jobless Americans with a modicum of cash was crassly and disgracefully ended when it was not included in the year end budget deal passed by Congress. While congressmen headed home for the Christmas break, these people – the long-term jobless - have been cut off immediately. The average benefit was about $270 a week. Unless Congress does something about it, in less than a year, another 3.5 million people who would have qualified for unemployment benefits will also be left out in the cold.
Given the partisan gridlock in Congress – the budget deal was considered a miracle by some observers – the likelihood that extending unemployment insurance soon is dubious. Conservatives will, no doubt, insist that it be coupled with cuts in other social net programs, giving with one hand as they take away with the other.
Far from conservatives’ time-worn chant that people remain unemployed because they are lazy, long-term joblessness is high because the recovery from the latest recession failed to produce enough jobs. Long-term unemployment is defined as being unemployed for more than six months. The average length of unemployment is now about 37 weeks. Before the recession it was 20 weeks. With the expiration of these benefits, only one in four unemployed Americans are receiving unemployment insurance.
Ending unemployment insurance benefits for long-term jobless workers will be particularly harmful in New York City, especially in communities of color. Black and Latino workers comprise the bulk of the long-term unemployed – out of a total of over 160,000 New Yorkers. Half of unemployed persons in the city have been unemployed long-term.
Besides hurting the jobless, failure to extend these benefits will have a detrimental effect on the nation’s economy, cutting job growth by about 300,000 this year and billions in consumer spending. Those who lose benefits will be cutting back on all sorts of spending, and consumer spending is just the sort of thing that boosts an economy.
Without jobless benefits a certain number of families will fall into poverty. Unemployment insurance had kept millions of Americans out of poverty during and just after the recession. The Bloomberg administration has bragged about the jobs that have been created in city since the end of the recession. But most of them have been low-wage, no benefit, dead end work, with people going to work and still living in poverty.
Long-term unemployment creates many problems, financial and psychological. These include the deterioration of skills, the exhaustion of savings and/or retirement plans, and employment discrimination against the long-term jobless. Regarding the last, the City Council recognized that employment discrimination against the long-term jobless was enough of a problem that it warranted legislative action.
Many Jobless Give Up
Although the nation’s official unemployment rate is now at 7 percent, New York City’s unemployment rate is stuck at 8.7 percent. And that doesn’t count the number of people who have simply given up looking for work in an economy where there are three unemployed for every job opening. The pre-recession days of 5 percent unemployment in the city seems a figment of our imagination now and is probably out of reach.
Oddly enough, the unemployment rate will probably decrease in the ensuing months as many older workers simply drop out of the labor force. They will be jobless. They just won’t be counted by the government as unemployed.
Our representatives must understand that there are still areas lagging behind in the recovery. New York City is one such area. While the number of unemployed in the nation is 50 percent higher than before the recession, the number of unemployed in New York City is still at nearly twice the level it was before the recession, driven in part by jobseekers coming to the city during the recession with the hope of finding better job prospects.
In these last few years, Congress has shown an appalling lack of understanding of poverty and compassion for the poor in its policies. The latest example is the passage of an agriculture bill without funding for the food stamp program, cutting off food aid to millions of the poor, many of them children.
There are some in Congress who say they will work to reinstate unemployment insurance benefits. Let us hope that they can succeed. It’s time to stop making war on the most vulnerable of Americans.