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This Week in Poverty: Perfect Storm Threatens Long-Term Unemployed

Greg Kaufmann
The Nation
Feb 10, 2012

In December, there were more than 13 million unemployed workers and about four people looking for work for every available job. According to the Economic Policy Institute (EPI), 5.5 million people have been unemployed for more than half a year, up from 1.2 million in 2007, and the average duration for an unemployed person is over 9 months.

“It is not, of course, that these millions of workers have become lazy, unskilled, or unproductive, it is that there are not enough jobs available,” writes EPI economist Heidi Shierholz. She notes that even new research from the Federal Reserve Bank of San Francisco attributes increased duration in unemployment to “the severe and persistent weakness in aggregate demand for labor.”

So it’s particularly alarming to see Congress playing games with an extension of unemployment benefits that are set to expire at the end of the month. Without an extension, more than one million Americans will be cut off in March, and more than 3.3 million by June 1st.

“Instead of offering a hand up and rallying to help those who are most struggling, Republicans and perhaps some Democrats would like to drastically cut down on the maximum number of eligible weeks, and throw up roadblocks to stop many jobless people from getting any benefits at all,” says Debbie Weinstein, executive director of the Coalition on Human Needs.

Some of those roadblocks include stigmatizing drug tests and making people who lack a high school diploma or GED ineligible unless they enroll in classes—though Weinstein notes there are currently about 160,000 people on waiting lists for said-classes and Republicans would like to see further cuts to those programs.

For millions of Americans, this isn’t a debate over some abstract benefits extension, it’s a debate over a lifeline.

In 2010, the federal emergency unemployment benefits currently being debated kept 3.2 million Americans from falling into poverty—less than $22,350 annually for a family of four. The unemployment insurance system as a whole kept 4.6 million people above the poverty line. Denying benefits now catches Americans at a particularly vulnerable moment. According to the Corporation for Enterprise Development, 27 percent of American households now live in “asset poverty”— meaning they do not have the savings or other assets to cover the basic expenses a poverty-level income would cover for just three months in the event of a layoff or other crisis. If you take away assets that can’t quickly be converted into cash—like a home, or car—that number jumps to a stunning 43 percent.

“Behind these numbers are very real and often frightening stories,” says Christine Owens, executive director of the National Employment Law Project (NELP). “Millions of midlife and older workers are moving toward retirement with substantially reduced savings because of job loss. The stock market has routed their 401(k)s and their home values are declining. And threats to basic economic security programs continue.”

Those threats aren’t just happening in Congress but at the state level too, creating a perfect storm that threatens the long-term unemployed.

Joan Entmacher, vice president for family economic security at the National Women’s Law Center, notes that South Carolina—which last year reduced the maximum number of weeks for state benefits from 26 to 20—is considering bills that would bar “steady, part-time workers” from receiving unemployment, particularly hurting women who are two-thirds of the part-time workforce in South Carolina as well as nationally. Another bill would make seasonal workers ineligible for benefits during the offseason. Three other bills were approved in subcommittee—drug testing for all applicants, mandatory unpaid community service (burdening workers with caregiving responsibilities and impeding the job search), and complete ineligibility for a worker terminated for even a minor infraction.

“The legislature is blaming the real victims of the recession, the unemployed, for our state budget problems and pursuing senseless cuts and barriers to receiving or keeping benefits,” says Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center.

Entmacher says the three bills “aren’t moving at the moment” but could be revived if restrictions like the ones being considered at the federal level are passed.

There are, however, opportunities to make your voice heard for a “clean” renewal of benefits through 2012 without cuts or punitive measures. Also today, USAction, NELP, and the AFL-CIO begin “Walk in My Shoes” events in front of congressional district offices across the US, letting representatives know that people have lost their jobs and homes, now’s not the time to take their unemployment insurance too.

Finally, the GOP would like to pay for any unemployment benefits extension—wait for it… by reducing the number of low-income families eligible for the child tax credit (you can’t make this stuff up). The average impacted family earns $21,000 a year and would lose $1,800 in income. There are indications from people close to negotiations that Democrats might be ready to deal on this. So, when you contact your representatives and ask for that clean extension that will help long-term unemployed people not fall into poverty, make it clear that you don’t want them to do it by throwing kids into poverty.

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