Long-term unemployed got coal in their stockings

By Stephanie JonesChristmas stockings

As they headed home for the holidays, Washington politicians intentionally excluded from the congressional budget extended unemployment compensation for the Long-Term Unemployed (LTU).

Did the Long-Term Unemployed behave so badly this Christmas that they deserved coal in their stockings?

Because of the lack of funding, federal benefits will expire for 1.3 million long-term unemployed workers on December 28th (90K in New Jersey). And, if things don’t change soon another 3.6 million people will lose their extended unemployment benefits within six months.

To understand the plight of the long-term unemployed, let’s start by examining what a typical American has to do to just to receive the minimal unemployment benefits necessary to keep a household afloat.

First, no matter how many weeks of unemployment an individual collects, to be eligible for compensation, every person has to report to the state Department of Labor (DOL) that he or she has actively been searching for at least three viable jobs each week.

So, let’s say a long-term unemployed worker fills out three applications for a given week and still doesn’t land a job. Does that make this individual naughty and thereby not deserving of extended unemployment benefits?

Let’s put that question aside for the moment and come back to it a little later. For now, let’s focus on the other part of unemployment – the monetary compensation.

Initially, unemployed workers receive state unemployment compensation, of varying amounts, for up-to 26 weeks. Once an individual exhausts the state benefits they are now considered the Long-Term Unemployed (LTU), they can then collect federal unemployment for another 47 weeks, for a total of 73 weeks. But, nowadays, many people still can’t find work after 73 weeks.

Things seem to be changing drastically for the long-term unemployed versus a few years ago. Back then, laid off workers received up-to 99 weeks of unemployment and, as a result, were nicknamed “99ers.” So, why is the government making such drastic cuts to unemployment benefits now? The answer – sequestration.

Sequestration refers to a legal procedure triggering automatic spending cuts that affect all parts of the government. Once sequestration began, the government reduced unemployment compensation from 99 weeks to 77 weeks. After that, they reduced it again from 77 weeks to 73 weeks. This fall, they cut weekly unemployment payments by up-to 20 percent.

These cuts leave long-term unemployed Americans in a frustrating position. Many still can’t find work and now their unemployment benefits have run out. What’s more, they don’t have a powerful lobbying group behind them. Essentially, they’ve become a group of unheard voices, swept under the carpet for far too long.

So, what are the long-term unemployed doing? Is anyone actually keeping track of them? Surprisingly, the answer is yes.

In April 2011, the federal Bureau of Labor Statistics (BLS) began tracking the long-term unemployed, recognizing that our nation had a phenomenon on its hands, an unprecedented analytical trend that the government could no longer ignore.

By the fourth quarter of 2010, nearly 11 percent of unemployed workers had been looking for work for two years or more, according to a BLS report. This phenomenon of longer-than-usual-unemployment prompted the bureau to increase the number of years it tracks the long-term unemployed from two to five in January 2011.

In the same report, the bureau recognized that the number of long-term unemployed remained stagnant while the overall unemployment rate dropped to 10.9M unemployed persons or 7%. For example, this November, the number of long-term unemployed, those jobless for 27 weeks or more, remained unchanged at 4.1 M in November 2013 (accounting for 37.3% of the unemployed), yet the number of long term unemployed workers declined by 718,000 over the past 12 months. How is that possible?

To understand these nuances, the BLS created surveys to divide the long-term unemployed into different segments so they could track these individuals more closely and determine what’s happened to them and what they’ve been doing.

For instance, in November 2012, the bureau reported that 2.1 million long-term unemployed workers, down by 409,000 from 2011, were “marginally attached” from the labor force. A marginally attached worker is one who: is currently not in the labor force, wants full-time work, and has been actively looking for a job sometime in the past 12 months.

In this 2012 BLS report, these individuals did not have jobs but wanted them and were available to work. In fact, they continued looking for work in the prior 12 months, but nobody counted them as unemployed because they had not searched for employment in the four weeks preceding the BLS survey.

This November, another BLS report stated that there were 762,000 “discouraged workers” in America, down by 217,000 a year ago. Discouraged workers are those not looking for work because they believe there are no jobs available for them. The report cited school attendance, or family responsibilities, as the main reasons 1.3 million unemployed workers stopped looking for work.

Discouraged workers? Is that an appropriate label? Perhaps the BLS is unaware that, nowadays, 2.9 unemployed workers are vying for every single job opening – the worst ratio since the lowest point going as far back as the 2001 recession. Perhaps discouraged isn’t the right word. Perhaps outnumbered is a better word.

To date, the BLS continues to spend government dollars to create surveys to track the long-term unemployed. The reason: once these people fall off the payroll, it’s difficult to track data about them. Clearly, the bureau recognizes a need to invest money to track the long-term unemployed, so, why can’t the government provide funds for extended unemployment compensation? Where is the disconnect? Unfortunately, politicians seem to be using the long-term unemployed as a political football.

Here is another interesting tidbit of information. This fall, the government shutdown cost upwards of $30 billion, while the extension of long-term unemployed benefits for one year had a smaller price tag of $25.2 billion. So, how is it that we can spend such a large sum of money on a pointless government shutdown, but have nothing left for extended benefits for the long-term unemployed?

Back to our earlier question, are the long-term unemployed considered naughty when they try to find work but can’t land a job within a certain amount of time? And, just when they need it most, do they deserve to lose the benefits they have been paying into for years while they were employed?

In the final analysis, who should have really gotten coal in their stockings this Christmas? Shame on the Washington politicians for not having thoughtful hearts for those who were in need this holiday season!

Everyone knows extending unemployment benefits would have put the money right back into the economy. People would have been able to use their unemployment compensation to pay for essentials like rent, food, gasoline, utilities, etc. The plight of the LTU is a national catastrophe.

If the Washington politicians are so reluctant to extend unemployment benefits, then why don’t they just create a Jobs Bill? Ultimately, we all want to get back to work. Aside from the obvious benefits of being financially secure, we tend to feel much better about ourselves when we are working.

Let’s see what 2014 brings. In the meantime, call your legislators in both the U.S. Senate and Congress as soon as they return to Washington during the first week of January to persuade them to change their minds (if need be) even if you are no longer receiving unemployment benefits (or you might be a discouraged worker or marginally attached)!

More information about the long-term unemployed

To read more about the plight of the long-term unemployed, click on this link to an article from the Mother Jones magazine http://www.motherjones.com/kevin-drum/2013/12/10-reasons-long-term-unemployment-national-catastrophe

The article concludes with conservatives and progressives, alike, agreeing that the LTU are a huge problem. Yet both sides continue to decline the extension of LTU benefits and there seems to be no agreement on this issue.

Another good article on this subject appears in the online version of The Washington Post, under the headline “Unemployment benefits for 1.3M expire next week. Here’s what you should know.”

To read the article, go to

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/20/unemployment-benefits-for-1-3-million-workers-expire-next-week-heres-what-you-should-know/

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