Unemployment 2008: A Congressional Letdown

Introduction

When you lay your head upon your pillow, are you able to drift off in a peaceful slumber? If so, feel blessed. For many Americans, it is a different story. They toss and turn with worry. The questions won't stop. Am I going to be able to pay my mortgage payment? My credit cards? My utilities? With their unemployment benefits either running low or exhausted, they're scared. For some, they are one step away from homelessness.

Unemployment Statistics

According to the Bureau of Labor Statistics, "Overall, 21 states and the District of Columbia recorded over-the-month unemployment rate increases, 23 states reported decreases, and 6 states reported no change. Furthermore, over the year, jobless rates were up in 47 states and the District of Columbia, and the national unemployment rate has increased to 6.5 percent from 6.1 percent in September."

Although Bush was not in full agreement with the decision, on June 30, he grudgingly signed the bill. When commenting on extending unemployment earlier, Bush said it would just give people more time to lollygag around and watch television. The bill approved a thirteen-week extension to unemployment benefits. When this bill was passed, NELP estimated that 900,000 had exhausted their unemployment. Now, four months later, the United States does not seem to be faring any better; 800,000 people are scheduled to run out of their extension in October, followed by another 350,000 in November and December.

Since January, employment has fallen by 1.2 million with over half of the loss in the last three months. The number of long-term employed (jobless for 27 weeks or longer) rose to 2.3 million. Tragically, this accounts for 22.3 percent of the total unemployment. These figures are not a true reflection of the problem though since the unemployment rate does not include marginally attatched workers. Marginally attatched workers are individuals who wanted and were available for work but for whatever reason had not looked for work in the four months preceding the survey. If these individuals were included, it would raise the number of unemployed individuals by 1.2 million. Furthermore, although full-time wage and salary earner's paychecks have increased 3.6 percent compared to a year ago; during the same period, the Consumer Price Index has increased 5.3 percent.

Furthermore, in December 2006, there were 1.6 unemployed workers for every job opening. Conversely, in July 2008, the figure has risen over 60% to 2.6. This works out to 5.6 million more job seekers than job openings in the United States. Considering this in combination with our low saving's rate, what are Americans suppose to live on? Maybe they can run off air like the new air car in the headlines earlier this week. Even those who are employed are worried about their jobs. According to an AP poll, one-third of Americans are worried about losing their jobs, and one-half are worried about it between the ages of 30 through 40.

The Congressional Letdown

On October 3, the House of Representatives approved H6867, another unemployment extension bill, by a landslide vote of 368 to 28. However, when Senate Majority Leader, Harry Reid made a last a minute motion to adopt S3507 by unanimous consent, Republican Senator Wayne Allard of Colorado objected. Consequently, afterwards the House left town on an election recess leaving thousands of unemployed workers without a means of income while Congressional members enjoyed a salary of $165,200 according to January 2006 rates. It's pitiful, isn't it?

Unemployment as an Economic Stimulus

In light of our weak economy, the first economic stimulus package seems like it did not even jump-start the economy. Obviously, something more has to be done. According to the Center on Budget and Policy Priorities, an effective fiscal stimulus has three criteria that need to be met. The stimulus needs to be timely, targeted, and temporary.

Unemployment benefits meet all three of these qualities. It is timely because when you put money into the households of the unemployed, the money is usually spent immediately on basic needs. It is targeted because the money goes to the people who need it the most to survive. It is temporary because once unemployment conditions improve; the benefits are no longer needed.

Nancy Pelosi, Democratic House speaker said, "Every dollar spent on Unemployment benefits generates $1.64 in new economic demand." Corroborating her claim, Peter Orszag, director of the Congressional Budget Office, said, "Research has shown that the unemployment insurance system is among the most effective dollar-for-dollar economic stabilizers that we have in terms of counterbalancing periods of economic weakness." Economists throughout the country agree that unemployment benefits have a positive impact on the economy.

Conclusion

In conclusion, several things are evident. Our economy and unemployment are not improving. Many Americans are financially hurting. Something more needs to be done. Extending unemployment benefits not only helps the unemployed but stimulates the economy too. In my opinion, it was wrong for the House to leave on an election recess without resolving this situation first. If you agree, contact your representatives. They reconvene the week of November 17^th. Let your voice be heard.

"Never doubt that a small group of thoughtful, concerned citizens can change the world. Indeed it is the only thing that ever has." ---

Margaret Mead

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