Republican unite against the unemployed!

Before recessing for the July 4th weekend, the United States Senate failed to extend unemployment benefits for the nation's long term unemployed. As a result, 1.4 million unemployed workers have lost their only source of income.

Every single Republican Senator and a handful of Democrats voted against the extension!

This is the worse recession since the Great Depression. 15 million people are out of work. Almost half of the unemployed have been jobless for six months or more, the standard measure for long-term unemployment. Millions more are not even counted, having dropped out of the labor market entirely, 650,000 last month alone. Yet the Republican Party is united in opposing an extension of unemployment benefits because they fear that it will increase the deficit or even more insanely they believe that unemployment benefits undermine the unemployeds' incentive to work.

This position is cruel particularly in light of the Republicans united opposition to legislation requiring billionaire hedge fund and private equity firm operators to pay federal income taxes at the same rates as other Americans.

It is also bad economics since unemployment benefits are among the most effective forms of economic stimulus, something the slumping economy sorely needs.

Nobel Prize winning economist, Paul Krugman, refutes the Republicans harmful and uninformed position writing:

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.

Wait: there’s more. One main reason there aren’t enough jobs right now is weak consumer demand. Helping the unemployed, by putting money in the pockets of people who badly need it, helps support consumer spending. That’s why the Congressional Budget Office rates aid to the unemployed as a highly cost-effective form of economic stimulus. And unlike, say, large infrastructure projects, aid to the unemployed creates jobs quickly — while allowing that aid to lapse, which is what is happening right now, is a recipe for even weaker job growth, not in the distant future but over the next few months.

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.

So, is there any chance that these arguments will get through? Not, I fear, to Republicans: “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, in this case, his hope of retaking Congress — “depends upon his not understanding it.” But there are also centrist Democrats who have bought into the arguments against helping the unemployed. It’s up to them to step back, realize that they have been misled — and do the right thing by passing extended benefits.

The entire column is linked.

Labor Secretary calls for jobs program

Extend Unemployment Benefits

The nation lost an additional 20,000 thousand jobs in April.

Most industries shed jobs last month, as has been the case since last November..

Notably, construction losses have spread from residential housing—reflecting the deep weakness in that sector—to non-residential building, which is also now on a consistent downtrend. Since the peak in construction employment in September 2006, the sector has shed almost 460,000 jobs.

Factory employment continues to slide, despite the export-boosting effect of the weaker dollar. In fact, the decline of 43,000 jobs in durable manufacturing (heavy industry) last month was the largest monthly loss since July 2003.

Almost 3 million unemployed workers have exhausted their benefits.

Another 5.2 million are employed part-time because they cannot find full time work, an increase of 850,000 from a year ago.

Wisconsin recorded the 3rd highest number of mass layoffs over the past year. And that was before Harley Davidson, General Motors/Janesville and Midwest Express announced layoffs.

When the original stimulus package was passed, President Bush refused to support extending unemployment benefits because his domestic policy agenda is limited to tax cuts, tax cuts, tax cuts.

Recall Mr. Bush originally campaigned that upper income tax cuts were justified by the nation's projected $5.2 trillion surplus.

When the recession began in March, 2001, shortly after he took office, the diagnosis had changed, but not Dr. Bush's medicine. Again the solution was high end tax cuts. The eventual $1.3 trillion tax cut was arrived at by taking 25% of the projected surplus despite the fact that it was disappearing in a sea of red ink.

As late as May of that year, when gas prices began to rise, President Bush's only solution was, you guessed it, upper income tax cuts.

Now unemployed workers are being held hostage to the President's supply side ideology.

In an editorial today the New York Times writes: "What is needed — now — is for Congress to extend jobless benefits for people who exhaust their initial 26 weeks of payments. Research is unequivocal that bolstered jobless benefits are more effective stimulus than tax rebates. They also have the advantage of being targeted to people in need...

Congress erred by not extending unemployment benefits in last February’s stimulus package. Lawmakers and Mr. Bush now have a second chance to fix that mistake. They must not squander it."

Congress must act now.

Latest job report indicates need to extend unemployment benefits

The number of jobs in the nation fell last month for the first time in almost five years according to the Labor Department's latest employment report.

17,000 jobs were lost, led by losses in construction, manufacturing, good producing industries and state government.

Today’s report is the clearest signal yet that the economy has entered a recession and that Congress needs to include a temporary extension of unemployment insurance benefits in its fiscal stimulus package.

Averaging over the past three months, payrolls grew by a scant 42,000 jobs per month, compared to 169,000 a month over the comparable period one year ago.

The Labor Department also sharply lowered its estimates for employment in 2007 as a whole.

In November, for example, the government had said 115,000 jobs were created. That number was reduced to 60,000 in the latest report, far short of the 150,000 jobs that are required to absorb new workers entering the workforce.

Long-term unemployment—the share of workers jobless for at least half-a-year—jumped to 18.3%, compared to 16.2% one year ago. At the start of the last recession in March 2001, in contrast, the long-term unemployed made up only 11.1 percent of all unemployed workers.

The number of long-term unemployed is higher today (1.38 million) than it was in March 2002 (1.33 million), when Congress first enacted extended unemployment compensation after the 2001 recession. Unemployment benefits are cut off after 26 weeks in most states.

Another important indicator of slack in the job market was the increase in the share of involuntary part-time workers, a change that is also evident in the increase in the under-employment rate, the BLS's most comprehensive measure of under-utilization. At 9.0% last month, the underemployment rate was at its highest level in over two years and significantly above its year-ago level of 8.3%.

Workers’ salaries have also fallen in the last 12 months. The average hourly wage for rank-and-file workers — about 80 percent of the total work force — rose 3.7 percent since last January, below the pace of inflation.

These developments are a source of concern not only for these families but for the economy as a whole. They are a clear sign that extending unemployment benefits must be part of any fiscal stimulus package.

A temporary extension of unemployment insurance benefits would help the people hardest hit by the weakening economy and would boost the economy with one of the fastest acting and most effective forms of stimulus available. Unlike tax rebates, which can’t begin to go out until mid-May, extended unemployment benefits could start reaching workers and boosting consumption within 30 days.

The Senate has included extending unemployment benefits in its stimulus package. It is important for American workers and the economy that it be included in the final stimulus legislation.