140.2 - Bad news: long-term unemployment benefits ending

Bad news: long-term unemployment benefits ending

But like I said, it hasn't been a good week.

For one thing - and this may well have affected some of you directly, extended unemployment benefits for some 1.3 million American workers were cut off, ended, as of last Saturday. And a Merry Christmas to you, too. Hundreds of thousands more among the unemployed will lose those benefits by June unless they are lucky enough to find the jobs that have so far eluded them.

Which is very unlikely because studies have shown that employers do not want to hire anyone who has been out of work for six months or more, which these people have been, even to the point of preferring people with less relevant experience. The result is that long-term unemployment has become a self-replicating trap even as we are experiencing the worst long-term unemployment since World War II.

Which means that this cut is going to do the most damage to the people who can deal with it the least, the people whose resources have been drained the longest and whose employment prospects are the bleakest. That's part of what that "budget deal" did. You know, the deal we are all supposed to cheer for because hey! it's a compromise! whoo-hoo! The failure to extend these unemployment benefits was part of the deal, part of what that deal has done.

The average stipend from the feds under the program was $1,166 a month. That's less than $14,000 a year, barely 3/5 of the federal poverty level for a family of four. And now that's gone, too. So it's a Merry Christmas and a Happy New Year as well.

It's hard to gauge or quantify the effects of this on actual people, it just becomes a jumble of numbers and statistics and ratios and percentages. But a recent study by the Urban Institute can give us a hint, laying out some of the damage to people caused by long-term unemployment.

It found, for one thing, that workers who have been out of a job for longer than 27 weeks (which is the definition of long-term unemployment) typically see their incomes fall by 40 percent. Even if they do find a new job, it's usually a lower-paying one with the resulting damage to their long-term earning prospects. These workers tend to have worse health, higher rates of suicide, and suffer strained relationships with their families. They see a massive drop in self-esteem from the embarrassment, even shame, many feel at being unable to fend for themselves or provide for a family. And these impacts persist to the next generation: The children of these folks tend to do worse in school and earn less over the long run.

That's what it means to be unemployed for more than six months.

The Huffington Post looked at some individual cases of how people were dealing with losing the benefits and found people considering selling their cars, taking minimum wage jobs (which of course will not provide for a family and that's if they can find one), slashing household budgets, raiding their retirement funds, maxing out their credit cards, pawning personal items, even moving.

And here's a tidbit for you: Remember that "long-term" unemployment is defined as being out of work for 27 weeks or longer. But it now takes the average job-seeker 35 weeks to find a new job.

And you want to know a good part of the reason this is happening, a good part of the reason why the inadequate "official" unemployment rate is still 7%, why there are still over 4 million long-term unemployed? Why the "recovery" so stunted and sluggish that it feels utterly wrong to call it one? The graph to the right shows it.

It's because even now we are so damn hung up on deficits that we are not willing - or more exactly, the combination of reactionaries and cowards who make up Congress and the White House are not willing - to do what's necessary; they are not willing to invest in people and jobs, they are not willing to face the fact that you cannot, if you will, you cannot austerity your way out of a recession.

And over a million people have just started paying an even bigger price than they already were for that abysmal failure.

Sources:
http://www.huffingtonpost.com/2013/12/29/high-stakes-for-us-families-losing-unemployment-benefits_n_4513984.html
http://media.wix.com/ugd/576e9a_f6cf3b6661e44621ad26547112f66691.pdf
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/27/long-term-unemployment-is-still-a-disaster-congress-is-about-to-make-things-worse/
http://www.urban.org/
http://www.urban.org/uploadedpdf/412887-consequences-of-long-term-unemployment.pdf