Talking jobs and unemployment

Today I went to a graduation for 58 men and women – almost all over 3o – who went to a program at the local YMCA to sharpen skills and make them more competitive in the job market.  I shared an intern with several others in my agency.  It was announced that 8 or 9 had found jobs.  Not bad in this market, but not good either. 

Last week the Boston Globe ran a story about the report by the National Skills Coalition. 

The report projects that by 2016, Massachusetts will have nearly 400,000 job openings that require more than a high school diploma, but less than a four-year college degree. The report says “middle-skill” jobs will account for 38 percent of all openings.

Ranging from licensed practical nurses to computer support specialists, the jobs have median annual incomes of about $50,000 to $55,000.

The report says the state faces challenges in meeting the demand for middle-skilled workers, with only 32 percent of current employees having the credentials.

The graduation I attended was designed to train people for these middle-skill jobs.  But until the jobs are created, the graduates still need to pay the rent, the mortgage, buy food and clothes.  These are men and women who are doing the rights things and are still finding it tough to find a job.  Some of them were unemployed before entering the program and some will be unemployed after graduation.  Some may be eligible for unemployment benefits, but may have exhausted their time.  Which brings me to the unemployment benefits issue.

Let’s start with Paul Krugman.

There was a time when everyone took it for granted that unemployment insurance, which normally terminates after 26 weeks, would be extended in times of persistent joblessness. It was, most people agreed, the decent thing to do.

But that was then. Today, American workers face the worst job market since the Great Depression, with five job seekers for every job opening, with the average spell of unemployment now at 35 weeks. Yet the Senate went home for the holiday weekend without extending benefits. How was that possible?

The answer is that we’re facing a coalition of the heartless, the clueless and the confused. Nothing can be done about the first group, and probably not much about the second. But maybe it’s possible to clear up some of the confusion.

So who are the heartless?  They are Republicans and some Democrats a tiny number of whom may be acting out of principle.  They hide behind the deficit and statements from the clueless.

By the clueless I mean people like Sharron Angle, the Republican candidate for senator from Nevada, who has repeatedly insisted that the unemployed are deliberately choosing to stay jobless, so that they can keep collecting benefits. A sample remark: “You can make more money on unemployment than you can going down and getting one of those jobs that is an honest job but it doesn’t pay as much. We’ve put in so much entitlement into our government that we really have spoiled our citizenry.”

Now, I don’t have the impression that unemployed Americans are spoiled; desperate seems more like it. One doubts, however, that any amount of evidence could change Ms. Angle’s view of the world — and there are, unfortunately, a lot of people in our political class just like her.

And then Krugman tackles the misinformed.

But there are also, one hopes, at least a few political players who are honestly misinformed about what unemployment benefits do — who believe, for example, that Senator Jon Kyl, Republican of Arizona, was making sense when he declared that extending benefits would make unemployment worse, because “continuing to pay people unemployment compensation is a disincentive for them to seek new work.” So let’s talk about why that belief is dead wrong.

Do unemployment benefits reduce the incentive to seek work? Yes: workers receiving unemployment benefits aren’t quite as desperate as workers without benefits, and are likely to be slightly more choosy about accepting new jobs. The operative word here is “slightly”: recent economic research suggests that the effect of unemployment benefits on worker behavior is much weaker than was previously believed. Still, it’s a real effect when the economy is doing well.

But it’s an effect that is completely irrelevant to our current situation. When the economy is booming, and lack of sufficient willing workers is limiting growth, generous unemployment benefits may keep employment lower than it would have been otherwise. But as you may have noticed, right now the economy isn’t booming — again, there are five unemployed workers for every job opening. Cutting off benefits to the unemployed will make them even more desperate for work — but they can’t take jobs that aren’t there.

Will extending benefit add the to deficit?  Krugman tackles this one also.

But won’t extending unemployment benefits worsen the budget deficit? Yes, slightly — but as I and others have been arguing at length, penny-pinching in the midst of a severely depressed economy is no way to deal with our long-run budget problems. And penny-pinching at the expense of the unemployed is cruel as well as misguided.

But is being against extending benefits a political plus?  Not according to two new polls out today.  According to the New York Times story in the Caucus both a CBS News and a ABC News/Washington Post poll found the majority of those surveyed believed that Congress should extend benefits.

In the CBS News survey, 52 percent of respondents said Congress should extend unemployment benefits for people currently out of work, even if it meant increasing the budget deficit. Thirty-nine percent disagreed, and the rest said “it depends” or gave no opinion.

Broken down by party affiliation, about 7 in 10 Democrats said they supported an extension, while most Republicans said they opposed it. Independents were more evenly divided, with 47 percent in favor and 42 percent opposed.

The ABC News/Washington Post poll asked the question a little differently, and found even more support for an extension of unemployment benefits. The question noted that Congress had previously extended benefits because of the economic downturn, and was considering extending them again. It also presented capsules of each side of the debate, noting that supporters of the extension say it “will help those who can’t find work” while opponents say it “adds too much to the federal budget deficit.”

The result: 62 percent of respondents said Congress should approve another extension, while 36 percent said it should not. Those in favor included 80 percent of Democrats and 59 percent of independents, as well as 43 percent of Republicans.

So there doesn’t seem to be a lot of gain in opposition.

Standing with three Americans who have struggled to find work, President Obama spoke in the Rose Garden about the need to extend unemployment benefits.

The last word goes to the President.

Under pressure in an election year to reduce the unemployment rate, now at 9.5 percent, Mr. Obama also urged the Senate to approve a package of tax cuts and an expansion of lending to small businesses. “We all have to continue our efforts to do everything in our power to spur growth and hiring,” Mr. Obama said at the White House.

Mr. Obama, appearing before reporters in the Rose Garden flanked by three Americans who have had difficulty finding work, took aim at that argument. “That attitude reflects a lack of faith in the American people,” Mr. Obama said. “They’re not looking for a handout. They desperately want to work.”

Mr. Obama sharply criticized Republicans who have several times in the past month voted against bringing an unemployment extension bill to the Senate floor.

“After years of championing policies that turned a record surplus into a massive deficit, the same people who didn’t have any problem spending hundreds of billions of dollars on tax breaks for the wealthiest Americans are now saying we shouldn’t offer relief to middle-class Americans like Jim or Leslie or Denise, who really need help,” Mr. Obama said, referring to the three people who stood with him in the Rose Garden, brought to Washington by the White House to help illustrate the president’s point.

The Bill will pass this week, probably without Republican support, after we get the new temporary Senator from West Virginia, Carte Goodwin. 

  

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