Joblessness doesn’t pay

Eric Cantor, one of the majority of Congress who opposed extensions to unemployment benefits. He and his party have demanded cuts in the safety net (SNAP, Medicare, even Social Security) as the price for not shutting the government down again.

On the 28th of December, long term unemployment benefits expired. The Republican majority in Congress allowed this to happen even though a majority of Americans thought they should be continued. Depending on who you believe, this is the first time the US government has cut extended benefits with the long-term unemployment rate this high. Per the National Employment Law Project, the percent of the jobless receiving unemployment benefits has fallen to one in four (26%)- the lowest proportion since modern record-keeping began in 1950. And the economy would need to create an extra eight million jobs to make up for the employment lost since the 2008 Bush Crash.

On the one hand, there are probably slackers who are taking advantage of this great deal. I don’t know of any, though–unemployment doesn’t cover the bills, especially if you’re paying into COBRA to keep your health benefits.  But with three candidates for every open job, the odds are stacked against most candidates for work. A long time ago, I worked as a headhunter for an IT recruiter. There are things you need to understand from the recruiter point of view (this article might help). First, in a down market, companies can demand cookie-cutter fits for any job not in the mailroom. If there are twelve skill-sets listed on the job requisition, any candidate without all twelve won’t get a look-see. Companies know they can be picky, and won’t fill a job with anyone who needs to be brought up to speed on any skill-set. Second, there are no guarantees that the job will be filled in a timely manner–requisitions can wait for months or even years when the economy is sketchy. Third, employed candidates are reluctant to job-hop in a bad economy. If their current employer is holding steady, they might feel uncomfortable jumping to a new situation. And finally, those who’ve been unemployed for awhile won’t even be considered. This is especially true for those over 40 or 50. And older workers also can’t take on the kinds of jobs that their younger counterparts can take. They’re probably not going to get a temporary gig in catering or bar-tending. Going back to school (some states do pay for training) may help, but most training programs are geared toward younger workers. A freshly-minted and certified help desk tech probably won’t ever make it to the short list of potential hires if he or she remembers The Patty Duke Show. And when Beltway attorneys with killer credentials are being told they’re overqualified, that doesn’t bode well for the rest of us. We already have millions of college graduates in babysitting and house-cleaning gigs.

The GOP knows this stance on unemployment is unpopular outside of their base. They’re even being coached to moderate their talking points, trying to sound sympathetic for a mess they’re making worse. And killing extended benefits will make things worse. There will be even less spending in an economy where spending hasn’t come back, and that means there won’t be extra hiring going on. In fact, the Congressional Budget Office envisions almost 300,000 jobs being lost or not created with the end of extended unemployment benefits.

A few weeks ago, I blogged on the potential of a jobless future. Innovation in robotics and computers coupled with historically low costs for capital investments might well drive us into a permanent state of high unemployment. If we can create self-driving cars and restaurants with no wait-staff, we are on the path to the levels of unemployment we’re seeing in the PIIGS countries. That won’t just affect high school dropouts–those low level jobs help young people who are working their way through college, and they’ll be gone. When Futurist Jeremy Rifkin first wrote about the jobless future, he envisioned a kind of social enlightenment that would have to take place–a means of making sure that the meaning of ’employment’ was itself changed. That would require a massive rethinking of our politics about workplace issues (job sharing, for example) and tax rates (the 1% keeping less of their money). If the US cannot manage to hold a safety net together in the current recession, it is completely unequipped (politically and intellectually) to keep the ‘people with pitchforks’ off the streets if some 4 million people on extended unemployment lose their benefits over the next six months.

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