"One gets the sense that elites have moved on, that the recovery is here and the [ ] crisis is over" says Atrios reacting to news that
[Congressional] lawmakers ... are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million....
"You can’t go on forever," said Senate Finance Committee Chairman Max Baucus, of Montana, whose panel oversees the benefits program. "I think 99 weeks is sufficient," he said.
"There’s just been no discussion to go beyond that," said Senator Byron Dorgan, a North Dakota Democrat.
There may already be up to 1 million people who are still out of work but are no longer eligible for unemployment benefits. Worse, that number might grow by 400,000 a month. It's time for a new WPA, NOW!
The problem - economic, moral, and social - of having millions of long-term unemployed is not going to go away soon. Lakshman Achuthan of the Economic Cycle Research Institute (ECRI) os one of the most bullish analysts out there, and here's what he had to say a couple of weeks ago:
"The demand is coming back not only the US but around the world. The problem is it won't be enough to make up for all the job losses for the people who are in the long term joblessless. It's not going to solve [the problem of the need to fun long term unemployment benefits]."
How big is the problem? This graph shows that there are about 6 million persons unemployed over half a year, who are collecting benefits. It literally dwarfs any other recession since the Great Depression:
and here is a graph of the unemployment rate:
The only similar postwar experience here is the recession of 1981-82. Note the above graph shows that, even though an average of 300,000 jobs were added a month in the years coming out of that recession, it still took 3 years - until 1985 - to get to an unemployment rate of 7.5%. Even though I think that strong job growth in the coming months is likely, there is nobody who thinks that a pace of 300,000 new jobs a month over the next few years is going to happen.
In other words, so far, long term unemployment benefits have been the only thing standing between these people and the abyss. And yet in a true Marie Antoinette moment, the Congressional deficit chickenhawks seems to be saying, "let them eat cake."
AllYourTV reports that
My inbox is filled with desperate people who have exhausted their unemployment benefits and are hoping that somehow Congress will include additional weeks of coverage in future legislation....
But after speaking with a number of House and Senate staffers in recent hours, it appears less and less likely that a[n extension] of unemployment coverage will become law anytime soon.
.... While no one I spoke with doubted that the people whose benefits had expired were in need, they had doubts that their need was enough to overcome the reluctance of Congress to take on another tough budgetary battle.
.... said one Senate staffer. "We went to war over a jobs bill that didn't include the extra unemployment coverage.... and I don't know that Congress has the will to tackle another controversial and expensive bill at this point."
Congress is balking because the cost of extending unemployment benefits has increased to (what used to be) a staggering $200 billion this year. That's on par with the costs of occupying Iraq, or a couple of Wall Street bonuses:
Representative Jim McDermott, a Washington Democrat who supports another extension of benefits, said there’s so little support for the idea that he hasn’t bothered to introduce legislation.
"What happens to these families when they have no money for food, no money for their rent and no money for their health care?" said McDermott. "It’s a problem that nobody around here wants to talk about."
According to the Los Angeles Times:
In California, state officials estimate there are nearly 100,000 people who are still looking for work but can no longer draw an unemployment check. Federal labor officials could not provide a number nationally, but private-sector experts say it could easily top 1 million. What is certain is that ... more Americans will have to face the challenge of making ends meet without a monthly check.
"People are going off a cliff and we're not really doing anything about it," said Andrew Stettner, deputy director of the National Employment Law Project. "That's not great public policy."
Meanwhile, Bloomberg found that 57,000 people in New York had received their last unemployment benefits check, as had 130,000 in Florida and 30,000 in Ohio.
Even worse, Goldman Sachs projects that more than 400,000 may soon begin losing benefits every month.
The Los Angeles Times took a peek at a tiny slice of the impact of the cutoff of unemployment benefits:
In Chicago, 55-year-old Cyndi Safstrom said she went through her retirement savings and is renting out rooms in her house to earn money. In Fresno, Rebecca Morgado, 34, had to tell her daughter that prom was out of the question, because her unemployment checks ran out and she hasn't been able to find a job since being laid off as a food quality inspector.
....Some families are coping with unemployment by moving in together to cut costs. [Wagma]Omar lives free in her sister's Mission Viejo home, as do another unemployed sister and their mother. "It's one person putting food on the table for everybody," said Omar, who cashed her last unemployment check this month.
Omar is worried that if her sister loses her job, all four will be out on the street. Since getting laid off from her job as a customer service rep in 2008, she has applied to dozens of jobs, including some at McDonald's, but still hasn't found work. .... "I'm at the point that I don't want to be on the street," she said. ....
[Kay] Stephens says she has no close family members to turn to — her 86-year-old mother needs financial help herself, and her daughter is just squeaking by. She's looking into programs that will give her low-income discounts on her auto insurance and electric bills now that her benefits have expired.
"I'm sick to my stomach with fear and anxiety," said Stephens, who ... has worked only sporadically since 2006.
and from the Bloomberg piece:
Teauna Stephney, a 39-year-old single mother from Bothell, Washington, [ ] said she could become homeless once her $407 weekly checks stop in June. "What are people like me supposed to do?" said Stephney ....
We know from the Great Depression what happens to people who exhaust all resources in hard times. They become homeless. And sometimes, they starve to death. During the Great Depression, it was found that 20 percent of the nation’s school children were malnourished and underweight.
And there is no private safety net. Charities face drastically declining donations in hard times like this. The days when the YMCA might provide emergency shelter for families down on their luck are long gone. Those people literally are out on the streets.
IF Congress and the Administration think that handing out money to the long-term unemployed to keep them away from complete destitution is a waste, then instead of turning their backs and consigning them to their fate, there is another alternative, and that is to pay them for performing needed public services. In short, as Bonddad and I argued a year ago,it is time NOW to establish a new WPA. What we said a year ago (repeated below) is even more urgent now ...
If ever there was a time to reinstitute the CCC and the WPA, the large scale public works employment programs which were the cornerstones of the "RELIEF" element of the New Deal, now is it! Even extended unemployment benefits will run out far too soon, leaving many able - bodied and - brained workers sitting unproductively and sullenly at home. Putting them to work on public sector projects would not just be important symbolically to society, and psychologically to the workers and their families, but would produce real and long-lating tangible benefits as well.
The Civilian Conservation Corps, a work relief program for young men ages 18-25 from unemployed families, was established in 1933. The CCC became one of the most popular New Deal programs among the general public and operated in every U.S. state and several territories in 2600 work camps. The young men were paid wages, but were expected to share their wages with their families. They built such things as fire trails, camp sites in parks, and also cleared swamps and planted trees.
In a similar vein, the Works Progress Administration, so named in 1935, was the largest New Deal agency, employing millions of people and affecting most every locality in the United States, especially rural and western mountain populations. Between 1935 and 1943 the WPA provided almost 8 million jobs and income to the unemployed. As discussed in beautiful detail in photoessays by Land of Enchantment (Murals) and The Field (artwork), the programs built many public buildings, projects and roads and operated large arts, drama, media and literacy projects, employing actors, artists, musicians, and writer (nearly 4 million in 1936 alone). It fed children and redistributed food, clothing and housing. Almost every community in America has a park, bridge or school constructed by the agency, and most public buildings of a certain age will feature architecture or a mural created by one of its artisans:
Kossack Spud1 also provided an additional extensive discussion of some of the huge legacy of infrastructure created by these New Deal Programs.
A WPA would accomplish several important goals. It would lower the overall long-term unemployment rate for a period of time. It would also increase domestic investment in areas we need like infra-structure. Finally, it would provide an added economic boost to help get us out of the hole created by the "Great Recession."
I suppose I should be realistic and confess that there isn't a prayer in Hades that this Administration and this Congress will undertake such a vital program. Instead the President's Commission on Social Security and Medicare has already met is examining ways to make cuts in the last bulwark of middle and working class programs. Obama has pointedly said that he does not believe that "New Deal" type solutions are appropriate.
Like hell! (P.S. If anyone can find me the link to that statement, which I have read, I'd be much appreciative).
Just how vital was the WPA? Consider the following quote that Bonddad and I used earlier last year in our History of the Great Depression:
"I was laid off in '31. I was out of work for over two years. I'd get up at six o'clock every morning and make the rounds. I'd go around looking for work until about eight thirty. The library would open at nine. I'd spend maybe five hours in the library." ....
"I can remember the first week of the CWA checks. It was on a Friday. That night everybody had gotten his check. The first check a lot of them had in three years. Everybody was out celebrating.... Everybody was so happy, you'd think they got a big dividend from Xerox."
"I never saw such a change of attitude. Instead of walking around feeling dreary and looking sorrowful, everybody was joyous. Like a feast day. They were toasting each other. They had money in their pockets for the first time. If Roosevelt had run for President the next day, he'd have gone in by a hundred percent."
- Hank Oettinger, as told to Studs Terkel, "Hard Times"