Whatever our various views as progressives on the tax-cut deal now headed for President Obama's desk after the big fight of the past few weeks, there was one clear gain Thursday: a 13-month renewal of the extension of federally funded unemployment insurance compensation. The extension is retroactive to Dec. 1, when the previous extension expired.
The GOP and some Blue Dog Democrats repeatedly worked to sabotage previous UI extensions and, when that failed, they made those extensions short term. Now jobless Americans eligible for compensation can count on a floor for how bad their income situation will become in 2011. The spending on unemployed benefits will provide a strong stimulus to the economy just as the stimulus bill passed in early 2009 fades away.
As Mitchell Hirsh wrote at Unemployed Workers.org:
[M]illions of unemployed workers and their families will have the basic security of knowing these benefits are available for between 34 and 73 weeks if needed, beyond the 26 weeks of regular state-funded unemployment insurance. Workers who had already been eligible for additional federal benefits will have those benefits available once more. Those workers who have been receiving regular state benefits will have the security of knowing that extended federal benefits are available to help sustain them during their job searches should they still lack new employment after six months of looking for work.
With doubt, that's good news. But millions of out-of-work Americans weren't eligible for unemployment compensation in the first place. And some others, like the so-called 99ers, many whom lost their positions two years ago when the economy was shedding 750,000 jobs a month, have exhausted all their benefits. They are not just out of work but out of luck.
Although it certainly won't happen in the next two years, given Republican control of the House of Representatives, one element that should be on the agenda of the progressive movement we should be building is adopting a new vision for dealing with unemployment to replace the creaky 75-year-old New Deal program. That vision should include all Americans who lose jobs, not just some of them.
A number of possible approaches can be taken in this regard, and much as it may gall certain believers in American exceptionalism, choosing which approach might be best would be aided by taking a close look at what some European nations do would do.
Robert Kuttner has discussed one such model, Denmark's in the 2008 bookv Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency:
This idea [of an active labor-market strategy] is not just to cultivate a broadly educated population but to subsidize the customized training of workers for emergent technologies, as well as their living expenses so that they can afford to train – and do so at a scale to make a difference. This strategy is combined with a national commitment that there shall be no bad jobs an; and that every job shall pay a true living wage, with the productivity to justify it.
Last year, I conducted a study of the country that comes closest to realizing this strategy, the small, highly trade-dependent nation of Denmark. The Danes call their model "flexicurity" – great labor-market flexibility combined with superb worker security. If that sounds lie an oxymoron, the rest of the Danish model defies the usual economic categories and manages to square several other circles. ...
What makes the flexicurity model both attractive to workers and dynamic for society are six key features: full employment; strong unions recognized as social partners; fairly equal wages among different sectors, so that a shift from manufacturing to service-sector work does not typically entail a pay cut; employer freedom to hire and fire as necessary; a comprehensive income floor; and a set of labor-market programs that spend an astonishing 4.5 percent of Danish GDP on programs such as transitional unemployment assistance, wage subsidies, and highly customized retraining. In return for such spending, the unions actively support both employer flexibility and a set of tough rules to weed out welfare chiselers; workers are understood to have duties as well as rights.
Denmark isn't America. It's twice the geographic size of Massachusetts but has only 75 percent of that state's population. So it's not difficult to come up with reasons why the program of a small, homogeneous Scandinavian nation simply won't cut it in big, diverse America with nearly 60 times the Danish population. But if progressives want policies that amount to more than triage during every recession, we should be inventing an American version of an active-labor market policy that prevents so many people being jammed through the spirit-killing, economy-wrecking wringer of long-term unemployment. Saying no-can-do shouldn't be in our vocabulary.