The unemployed are not too big to fail

Several stories over the past few days have put a little more flesh on the grisly unemployment numbers of the past several months. A quick spin through some of the better ones:

If you’re one of those people who presumes that the majority of the hundreds of thousands of workers getting tossed off the job each month are at least getting unemployment benefits, think again. On Friday, Barbara Hagenbaugh of USA Today presented an absolutely dismal set of numbers on America’s unemployed. And as usual, the impact is greatest on those who are living closest to the line economically. 

Hagenbaugh writes:

“While 13.2 million people were unemployed in March, approximately 5.8 million were collecting unemployment benefits at the end of the month, double the number from a year ago, the government said Thursday. That means less than half of those who were out of work and were actively trying to find a new job were receiving unemployment benefits….

“Often, those who worked part time or who were not at their job for very long before being laid off are not eligible. That tends to disproportionately include women, low-income workers and people with more seasonal jobs, such as construction, according to the NELP. A 2007 report from the Government Accountability Office found low-wage workers were about one-third as likely to collect unemployment benefits as those earning more.”

The very same job market contraction that’s causing many workers to be chopped off payrolls before they qualify for benefits is causing a lot of people who do qualify to remain out of work for longer than the benefits last. The federal stimulus package signed in February includes all of $7 billion to help states channel aid to those who might not otherwise get anything–enough to provide temporary assistance to about half a million, according to the National Employment Law Project, but a drop in the bucket compared to the scope of the problem.

As the New York Times noted this weekend, laid-off workers over the age of 45 are having an especially hard time of it, comprising more than their share of the long-term (six months or more) unemployed. Elsewhere in the Times, Eric Eckholm reports that at least 34 states are dealing with their fiscal crises through cuts to programs for the most vulnerable and needy Americans. Few states if any will ultimately escape this trap, which for the time being is mitigated by the infusion of federal stimulus dollars.

Where does all this lead? Check out Kathy Sanborn’s Counterpunch dispatch on the proliferation of tent cities.

You can also learn about all our free newsletter options.

Comments (4)

  1. Submitted by Tim Nelson on 04/13/2009 - 12:19 pm.

    If I’m right about automation, that fewer people are needed by employers, that too many jobs are obsolete, that an unemployment statistic based on “job seekers” is hardly relevant anymore…

    Then it shouldn’t surprise me if my layoff last November should extend to age 59 and a half.

    My race to a safety net relies on my ability to convince readers of my posts to consider the effect of automation.

    I’m doomed, as you can plainly see. lol

  2. Submitted by Glenn Mesaros on 04/13/2009 - 02:22 pm.

    Richard Thaler, the behaviorist kook who is one of the inner circle of “behavioral economists” around Barack Obama, says the biggest problem facing the millions of Americans approaching retirement age is not that the global financial system has collapsed and blown a huge hole in the retirement funds of some and driven others into abject poverty, but that people don’t save enough! It’s a behavioral problem!

    “Aging Americans are facing a perfect storm when it comes to retirement,” Thaler says. “Many have done little saving over the past two decades and have now seen what they have saved, either in their 401(k) or their home equity, decline sharply in value. Once they face these facts, Americans will have to relearn the saving habit.

    “To figure out how, we need more than standard economic thinking, which is based on an idealized conception of behavior. Instead we need to focus on how people actually behave-a sensibility that defines the new field called ‘behavioral economics.’ Traditional economists bestow upon humans the mind of a computer and the willpower of a saint; I like to call these imaginary creatures Econs. These Econs have no difficulty saving because they rationally calculate how much wealth they need for retirement, reduce their consumption accordingly and then invest optimally. Econs never splurge or speculate. But the world is not populated by Econs-and if we understand how humans really behave, we can come up with ways to get them saving again.”

    See, according to this fascist idiot, being broke is a personal problem, a behavioral problem, which makes it your fault, not the fault of the parasites. If you believe that, you’ve already bought into the brainwashing. Thaler continues the brainwashing by asserting that the solution lies in the realm of forcing the automatic enrollment of people into savings plans. As opposed to, say, putting the failed global financial system through bankruptcy and organizing a new system based upon American System economics.

    Thaler is the co-author, with Cass Sunstein, of “Nudge.” His article, in issue of Newsweek dated April 20, is titled “It doesn’t have to hurt.” I guess if it does, that’s your fault, too.

  3. Submitted by Bernice Vetsch on 04/13/2009 - 02:25 pm.

    While many members of the U.S. Congress and some radio talk-show types deride European countries as “socialistic,” they should actually be looking to Europe for wonderful examples of what good government requires: a tax rate high enough to cover universal health care and to make funds available to help those in temporary financial trouble (out of work, foreclosed, et cetera) and those who cannot exist without permanent financial and other forms of assistance (physically or intellectually disabled, mentally ill, elderly).

    This is called Democratic Socialism. It reflects a society whose members want everyone’s basic needs met and are willing to pay for it.

    The current anti-tax policy as it is practiced in Minnesota and many other states reflects a refusal to ask government to do what government should do (and does elsewhere). It reflects an attitude that government is “stealing” from those who are “productive” and using its ill-gotten goods to support those refuse to support themselves.

  4. Submitted by Eric Ferguson on 04/13/2009 - 05:01 pm.

    Thank you Steve for picking up the story on how few unemployed people qualify for unemployment insurance. One of the most underreported stories of the recession is how for many years there has been an incremental tightening of eligibility in order to save a bit for states and employers.

Leave a Reply