January 2, 2014

OUR OPINION: Jobless aid cuts foreshadow new downturn

Benefits let job seekers keep their heads above water while the economy recovers.

The millions of Americans — and thousands of Mainers — who have been out of work for more than six months are falling further and further behind. Many of them need additional education and training to find a place in the workforce. But most of all, they need long-term unemployment benefits to keep them afloat while the economy improves.

Congress last month failed to renew unemployment benefits for those out of work more than 26 weeks, removing the safety net for about 1.3 million Americans, including more than 3,200 Mainers. If a deal cannot be reached in the New Year, as many as 3.6 million more Americans, and at least another 10,000 Mainers, will lose benefits.

The extension was a victim of the latest budget deal — Republicans did not want the benefits included in the budget, and Democrats were unwilling to fight for them and risk upsetting the agreement.

Outlining the case against the benefits extension, Sen. Rand Paul, R-Kentucky, said, “You get out of a recession by encouraging employment, not encouraging unemployment.”

That point of view fails to recognize that even now, in a recovery, there are three people out of work for every job opening. For the most part, people are not finding jobs because there are not jobs to be found.

In addition, there is little evidence that a benefits check keeps the unemployed on the couch. In fact, the opposite is true — the benefits allow job seekers to stay above water during a job search. They can keep their homes and feed their families. They can buy clothes for interviews, and afford the transportation to get there.

In many cases, unemployment benefits, which require recipients look for work, are the only thing keeping them engaged in the job search. Without it, many of the long-term unemployed lose the incentive to keep up what has for months and months been a fruitless and frustrating endeavor.

In North Carolina, which already has cut off benefits at 26 weeks, the unemployment rate has dropped significantly, from 8.8 percent to 7.4 percent. But the number of employed increased only slightly, indicating that the drop was because of people calling off their job search altogether.

Long-term unemployment benefits are used in times of great economic distress, when there are simply not enough jobs to maintain normal employment. That has certainly been the case in the latest downturn. At its peak, when unemployment was at 10 percent and there were seven people out of work for every job opening, unemployment benefits were available for a total of 99 weeks.

Until the last deal ran out Dec. 28, the benefits had been cut to a total of 73 weeks. With unemployment down to 7 percent, it made sense to slowly scale back the long-term benefits.

But the recovery is not treating everyone the same. True, the short-term unemployed are getting back into the workforce at the fastest rate since the recession peaked. But the long-term unemployed are finding it even harder to get work.

As time goes on, the gap in their resumes looks worse and worse to employers, their skills deteriorate or grow obsolete, and they are separated more and more from the professional contacts that typically lead to a job.

All of that pushes them further and further to the margins of the economy, where the struggle to find work becomes permanent, instead of a factor of a poor economy, and the chance that these once-productive workers will have to rely for good on government aid becomes greater.

When that happens on a large scale, the entire economy suffers, well after any recovery.

Congress can avoid this by extending the benefits through 2014 at a cost of just less than $20 billion. Extending the benefits also would create around 200,000 jobs and provide a small bump in Gross Domestic Product, according to the Congressional Budget Office.

For the good of the economy, as well as the hard-working Americans most affected by the recession, Congress has to act.

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