The Grinch cuts off the unemployed

The Bush administration joined the Republican congressional leadership in their annual holiday raspberry for the unemployed. They all went home in December, allowing the Temporary Extended Unemployment Compensation (TEUC) program to expire. Workers whose regular six months of unemployment benefits ran out after Dec. 21 are out of luck. The same thing happened last year, but public outrage was so great that when Congress met last January, it was forced to extend TEUC.

The Republican House leader Tom DeLay cited the improving economy as a reason. That claim will be of little consolation to the half million jobless workers who will have lost their benefits to Republican stinginess by the end of January. Deborah Pryce (R-Ohio) said that Republicans are “conflicted” about the issue, because economists have advised that extending TEUC “is the last thing we need to help the unemployed.” In Pryce’s home state of Ohio, 10,000 workers have been exhausting their regular unemployment benefits each month. In metropolitan Columbus, which Pryce represents, about 9,000 people have been unemployed longer than six months.

This has got to be the meanest administration since Herbert Hoover. As the recession deepened in the winter of 2001-2002, they resisted any extensions to the unemployment compensation program. Finally forced to act, they loaded the unemployment bill with $8 in corporate tax breaks for every $1 in jobless benefits. The TEUC bill provided a meager 13-week extension in most states, compared with up to 26 weeks that were available in earlier recessions. As a result of this stinginess, three-quarters of the long-term unemployed – 4 million people in the last 20 months – exhausted their TEUC benefits before finding a job.

Long-term unemployed – those out of work more than six months – are now 24 percent of all jobless workers. That’s the highest level in twenty years. Compared with March 2002, when TEUC was passed:

• there are fewer jobs,

• the unemployment rate is higher,

• the number of long-term unemployed is 53 percent higher.

President Bush has avoided discussion of improvements in jobless benefits. And on Dec. 11, White House spokesman Scott McClellan refused a direct question when asked, “Does the administration believe that the Congress should make [extending TEUC] a first order of business?” McClellan repeated the administration line that “America’s workers and families … want paychecks and jobs.” Of course they do. But the new jobs being created are too few even for the natural growth in the work force, much less to provide work for long-term unemployed. Meanwhile, workers need assistance to pay the rent or mortgage, put food on the table, send their kids to school, get emergency medical care, and throw a few scraps to hungry creditors.

Public outrage may force Congress to extend TEUC again, as they did last year. If they do, they are likely to pack the legislation with more goodies for corporate special interests. And even if the extension passes, the system of unemployment benefits is still deeply flawed.

Less than half of all jobless workers are covered by the regular unemployment compensation system. The rest have exhausted their benefits, or never qualified in the first place, or are newly entering (or re-entering) the labor force. Workers in low-wage, part-time or temporary work are least likely to qualify for benefits. Workers who qualify for benefits get only one-third to one-half their usual wages.

Most of the information in this column comes from the Center for Budget and Policy Priorities. They, along with the AFL-CIO and many other organizations, have called on Congress to renew the TEUC program. But two years ago, when the job loss crisis was getting underway, there were calls to go further than a simple 13-week extension of the present system. Demands were made to extend benefits by a full six months, to increase the amount of the payments, and broaden the coverage to include many of those now being left out.

As the political season leading up to the 2004 elections unfolds, these demands should again be placed on the front burner.

The author can be reached at economics@cpusa.org.