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The Long-Term Unemployed: Caught in a Perfect Economic Storm

By Lee A. Daniels

The Dow Jones Industrial Average crashed the 10,000-level barrier this past week – evidence, Obama administration officials and numerous economic observers said, that the economy’s on the mend.

But a different set of statistics in the news last week offers a stark contrast with Wall Street’s and the general economy’s apparently rising fortunes. Those numbers are: 400,000, 200,000, and 1.3 million.

They represent the “canary-in-the-mine” phenomenon – a warning beacon that can signal catastrophe ahead if steps aren’t taken to reduce the present danger.

Unemployment copyThese figures refer to the long-term unemployed, those American workers who have been jobless for so long – more than 26 weeks, or six months – they’re now losing their extended unemployment benefits.

Last month, according to the National Employment Law Project (NELP), an advocacy group, 400,000 of the long-term unemployed stopped receiving federal benefits. This month another 200,000 are due to be cut off. Unless Congress acts to again extend benefits for the long-term unemployed as it did earlier in the recession, by the end of December a total of 1.3 million of the long-term jobless across the country will be in the same predicament.

For many states, that will bring huge increases in the number of jobless people who will be completely without income.

For example, NELP figures indicate that by December 31, the number of long-term jobless who will be cut off from benefits will increase in Alabama from zero to more than 37,000; in Ohio, from about 12,000 now to more than 64,000, in Texas, from zero now to more than 48,000, in Massachusetts, from zero to more than 39,000. The impact of such a sudden surge on state’s already strained finances will almost certainly be overwhelming.

Even more alarming, the wrenching predicament of this group of the long-term jobless seems to also underscore the potential danger that lies ahead: that the nation’s economy could “recover” with millions of workers still not able to find jobs.

In fact, that dynamic – a jobless recovery – is how the economy rebounded from the recession that began in the spring of 2001 and was exacerbated by the terrorist attacks of September 11. Then, by the recession’s end in mid-2003, about 1.9 million workers had suffered through long-term unemployment.

Today’s economic and unemployment crisis – the worst since the Great Depression of the 1930s – is far more serious. More than 5 million have been unemployed for more than 6 months, and more than 2 million have been unemployed for more than a year, Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning think tank, told a Congressional subcommittee panel earlier this month.

One reason is that there’s only one job vacancy for every six persons who are currently out of work. As a result, most economists and analysts expect that, even if the overall economy does better, unemployment will keep rising well into next year, producing a rate of at least 10.5 percent (with rates for Latinos and blacks above the 13 to 16-percent levels, respectively).

This kind of jobless recovery means that the number of long-term jobless is virtually certain to keep increasing, too, depleting the economic resources of more and more of the jobless and putting more individuals and entire families at risk of complete destitution.

That’s why it’s critical that Congress act now. In early October, Senate Democrats approved a measure extending benefits for the long-term jobless another 14 weeks for all states and another 20 weeks in those states with unemployment rates above 8.5 percent. The House of Representatives had already approved similar legislation. The funds for the measure would come from continuing an expiring surtax on employers that pays for federal unemployment benefits. However, Senate Republicans blocked immediate implementation of the measure, claiming that its funding should come from the Obama Administration’s economic stimulus package. A compromise has yet to be reached.

Meanwhile, the canary in the mine is singing a tune – a dirge.

Lee A. Daniels is Director of Communications for the NAACP Legal and Educational Defense Fund, Inc., and Editor-in-Chief of TheDefendersOnline.

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  1. I am angry. Technically I was “laid off” along with many other employees in Nov. 2008. However, in actuality my job was stolen from me. It was not the first the gov’t took. Jobs and careers having been disappearing since at least 1975. How did the US steal my job? Easy, the gov’t gave and continues to gives tax credits to companies that outsource overseas, continues to trade with other countries even though of the goods can be produced here and be of better quality, by the Cap and Trade Act, by the gov’t being corrupt, greedy and power-driven. Secret and overt Members of corrupt businesses and many people in gov’t were never “voted in” but given their positions and the power that goes with them. They continue to steal jobs, our income tax, and out children’s and out futures. They want our dignity, souls, and total control over us.
    They bailed out AIG, Goldman Sachs, etc. immediately with no stippulations or accounting, whatsoever. Yet the unemployed have many stipulations on their paltry unemployment checks. Each hour that the Senates debates the unemployment extension issue, the economy gets progressively worse. Unemployment checks help keep mulitudes of businesses going.
    I refuse to live under a dictatorship along with multitudes of others. I am angry. I will NOT go quietly.

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