While the week before Christmas is a time when most Americans begin to pay less attention to the outside world in order to focus on friends and family, 1.3 million people will find that nearly impossible. That’ s the number of the longterm unemployed—individuals who’ve been jobless for more than 6 and a half months—-whose unemployment benefits will expire just days after Christmas. The longterm unemployed are disproportionately people of color.
The failure by the House of Representatives to renew emergency benefits for the federal longterm unemployment program, while racing to their own holiday vacations, effectively cuts an important lifetime for those hardest hit by the recession and is another setback to an economy that can’t find its footing because Washington has lost its way. Unlike the lyrics to the holiday classic, this will not be “The Most Wonderful Time of the Year” for far too many.
The problem is that the economy and employment markets, despite recent cheery headline news, remain far too anemic to move the needle for those struggling to find work.
Over four million Americans have been unemployed for 26 weeks or more. That’s a higher number than it was back in 2008, when Congress created the emergency program for the longterm unemployed. This is a striking fact that ought to make plain how critical the situation is for millions of Americans today.
Underscoring how bad things are is the fact that 6 million Americans have given up the job search and disappeared from the workforce all together. Many of those have returned to school, while a bulk of the frustrated job seekers have slipped into the “off the books” economy and into poverty. If you count all of these discouraged workers along with the officially unemployed and those who’re underemployed in jobs below their skill level, the unemployment rate almost doubles, from the official 7 percent to over 13 percent.
But these realities aren’t enough to sway key GOP leaders who are blocking the program. Sen. Rand Paul declared on Fox News Sunday just days ago that longterm unemployment insurance “does a disservice to those that you are trying to help.”
The key Republican argument hasn’t changed from the beginning of the crash: that longterm unemployment insurance encourages jobseekers to stay at home rather than pound the pavement. However, as The Economist points out, a recent paper by the Federal Reserve Bank of San Francisco found that without unemployment insurance those looking for work would have found a job slightly earlier—a week, to be exact—but they would have had to endure four and a half months with no income support in the process of finding it.
There is also a broader truth here: employment benefits are good for the overall economy. The Congressional Budget Office estimates that every dollar spent on unemployment benefits yields $1.60 for our economy. The failure to renew the $25 billion program will remove $40 billion dollars in economic activity from our economy next year, at a time when it’s still struggling to recover.
Moreover, the reduction in unemployment benefits will exacerbate the economic crisis in communities of color. As the Urban Institute lays out, almost two out of five of those who have been without work for six months or more are black and Latino. The elimination of the $300 average weekly income support will wallop communities of color, many of which are suffering from Depression-like levels of unemployment.
To be fair, House Speaker John Boehner signaled in recent weeks that he was open to continuing help for the longterm unemployed, but only if Democrats reduced the budget by an equal amount to help pay for it. Given that the budget agreement reached by Democrats and Republicans last week is held together with tape and chicken wire, the prospect of finding another $25 billion in the closing weeks proved too a high a hurdle to leap.
It’s important to note that the drive to reduce longterm unemployment insurance is not only a fight over dollars and cents. It takes place against the backdrop of a fierce debate over whether the United States government has a responsibility to help those struggling to help themselves. The GOP has argued all year that slashing education, housing, transportation, health care and food benefits all help to propel Americans on the edge forward. They even shutdown the government to make the point.
The slashing and burning over the past year through sequestration, the government shutdown and the rollback of food stamps has led Noble Prize-winning economist Paul Krugman to argue that many Republicans in Congress have mounted a “War on the Poor.” This may be up for debate, but his designation of the cancellation of longterm unemployment benefits as an attempt to “punish the unemployed” is hard to argue with at this point.
In every recession since 1957—starting in the Republican administration of President Dwight Eisenhower—Congress has stretched unemployment help to the longterm unemployed. But for the first time in modern history, through its failure to act, the Congress of the United States just “Scrooged” a group of struggling Americans who need critical assistance. They and the more than 850,000 additional people who will join them early next year start 2014 trying to figure out how not to lose, rather than how to get ahead.