Thursday, October 24, 2013

Extended Benefits End as Millions left Jobless

(Las Vegas, Nevada) Despite arguments to the contrary, giving unemployed Americans extended jobless benefits of up to 99 weeks didn't prevent them from taking jobs, according a Fed report. But by the end of they year, it won't matter anyway, because extended benefits will end. So all those Fox News viewers can relax a bit, since many of those "freeloaders" will soon be out of their pockets and off the government dole.

Earlier this year the Federal Reserve Bank of San Francisco had released a study saying that the extended benefits given from 2009 to 2012 to the unemployed increased the overall employment rate by a mere 0.04 percentage points, which the report says, is very teeny-weeny in comparison to the peak recession unemployment rate of 10 percent 4 years ago.

"There was some criticism that people on long-term unemployment benefits would not want to go back to work," said Henry Farber, a professor of economics at Princeton University and co-author of the report. "But that's not true. We could find no real effect of the benefits from keeping people wanting to work. People are not staying on unemployment to avoid taking jobs."

Farber said his report looked at previous downturns in the economy when extended unemployment benefits were shorter—up to 79 weeks in early 2001-2002—than came out of the recession of 2007-2009. The findings for both periods were similar, he said.

"There was never much serious work done to look at this issue of extended benefits and the effect on the jobless rate," Farber said. "That's why we did this. We wanted to find out if there was a correlation and we didn't find one."

The current rate of unemployment is reported at 7.2 percent according to the Bureau of Labor Statistics, down from the 10 percent recessional peak in October 2009. But that's the "official" rate. Millions are still without work after exhausting their unemployment benefits years ago --- who are usually older workers. See this Government Accountability Report.

"People are no longer being counted by the government," says Bud Meyers, a Nevada blogger. "The labor department defines millions of jobless Americans as 'discouraged workers', which just means they are SOL."

Still, while the job picture is improving for some, the long-term unemployed aren't so lucky. That's because as the jobless rate improves, the federal government—which funds much of the unemployment benefit extensions—cuts back spending for benefits.

"And the older and longer one is unemployed," Meyers adds, "the less chance they have of ever being re-employed again...ever." Mister Meyers wrote an accounting of these people for the Economic Populist.

Congress has traditionally extended unemployment benefits in times of recession. In 2010 and 2011, benefits in some states reached 99 weeks of combined state and federal benefits—the highest extension on record. Those people called themselves the "99ers"; and it is estimated that there are about 7 million of them still out of work and no longer being counted today.

Currently, a little over a third of the unemployed (3.9 million of 11.3 million) receive some form of state or federal benefits. Any current extended benefits will continue for those receiving them, but they will not be renewed at the end of this year. And there will be no more extended benefits for those going on unemployment now (unless job losses mount to recession-era levels again). Realistically speaking, counting "discouraged workers", there is only one job opening for every 6 unemployed.

Currently, there are some 4.1 million Americans listed as long-term unemployed—defined as those who have been out of work for 27 weeks or more, according to the BLS. And they too, typically tend to be older, because while they once worked, millions of others who have graduated from high school since the Great Recession have as yet ever been counted as part of the labor force.

Chris Rhomberg, a sociology professor and labor expert at Fordham University, says "The long-term unemployed need help, and they're not getting it. You've got a situation where employers can reject people who have been out of work for a long time and they don't suffer any consequences. Businesses are not hiring and extensions are down. It's cruel."

Bud Meyers knows all too well. "As far as our former friends, co-workers and relatives are concerned, we're just a bunch of lazy no-good bums who don't want to work." Fox New tends to agree.

Merry Christmas and a Happy New Year to another 1,324,967 Americans who will soon lose unemployment benefits in another 2 months.

Related Articles:

June 28, 2013 - Congressional Hearing: Long-term Unemployment for Older Workers

October 9, 2013 - The Long-Long-Term Unemployed (A Year or Longer)

September 28, 2013 - Older and Unemployed? You are SOL

August 26, 2013 - Long-Term Unemployed Baby Boomers in 2013

July 7, 2013 - Count the long-term unemployed 99ers in 2013

June 25, 2013 - Long-term Unemployment: Hysteresis, Older Workers & Disability

1 comment:

  1. 7.2% (the "official" U-3 unemployment rate) --- 13.6% (the broader U-6 measure) --- and 23.3% (from ShadowStats). The 23.3% calculation includes our long-term (over 12 months) unemployed and discouraged, who were reclassified as "Not in Labor Force" by the Clinton administration in 1994.