Congressional Response Mixed, Sometimes Dismal

By Fr. Fred Kammer, SJ, JSRI Director

Gulf South unemployment figures over two years

While pundits and politicians observe the first signs of a spring thaw in the abysmally deep economic trough we are in, workers in the U.S. and the Gulf South are still waiting for signs that their lives will be better. In the Gulf South, the number of persons unemployed has more than doubled from 1,208,649 in February, 2008, to 2,654,281 in February, 2010. Almost one-and-a-half million workers in the region have lost jobs during this two-year period. While Louisiana (still “benefiting” from Hurricane recovery spending) and Texas continue to have unemployment levels below the national average of 9.7 percent, Florida (12.2%), Mississippi (11.4%), and Alabama (11.1%) all exceed the national level. Alabama, moreover, has seen the greatest growth in unemployment—an astonishing 156% increase in just two years! Mississippi was not far behind with a 145-percent increase.

A closer look at the numbers from February 2008 to February 2010 follows:

A jobless recovery?

A number of commentators have observed that the recovery in the jobs picture will lag behind other “economic indicators.” Another way it has been put is that we are having a “jobless recovery,” hardly a cause for optimism for unemployed workers. The Economic Policy Institute (EPI) reports that, for the seven recessions that occurred in the post-War period between 1948 and 1980, “the average lag time between the official end of the recession and the return to pre-recession levels of employment was a little over nine months and never took more than a year.” ¹

This relatively prompt job recovery continued after the recession of the early 1980s, when the pre-recession employment peak was reached in eleven months. However, job recovery after the next two recessions (beginning in 1990 and 2001) were 23 months and 39 months—a much more dismal picture for working people. A similar pattern in this recovery would put the return for pre-recession employment levels as far out as May 2013 or November 2014, more than four years from now. ²

Already, 3.5 million workers nationally have been out of work for more than a year, the highest number of workers idled for such a long time since World War II. A new report from the Pew Economic Policy Group analyzes the demographic makeup of that group of long-term unemployed—including race, age, educational level, industry, and occupation—as well as the fiscal impact on federal spending of various programs to ameliorate the effects of unemployment on those affected. See A Year or More: The High Cost of Long-Term Unemployment, April 2010 [18 pages].

Congressional Responses to Record Unemployment

When President Obama signed the American Recovery and Reinvestment Act (ARRA or the “stimulus bill”) on February 17, 2009, it triggered a range of relief measures for the rapidly worsening U.S. unemployment situation. ARRA benefits created extended federal unemployment insurance up to 73 weeks, provided an additional $25 per week of benefits for unemployed workers, and funded a subsidy for unemployed workers covering 65 percent of the cost of COBRA premiums for health insurance. Timed to expire at the end of 2009, these benefits generated hard cash for workers and their families and an immediate stimulus to the economy.

Since then Congress more than once has temporarily extended those benefits to workers who continue to be unemployed on a short-term basis while they have attempted to agree on long-term relief for the rest of 2010. When a further extension beyond April 5 was blocked by Senator Tom Coburn (R-OK), workers began losing benefits at the rate of 200,000 workers per week this month. After two weeks of no unemployment benefits, on April 15, 2010, the returning Congress finally passed another extension (HR 4851) of Unemployment Insurance and COBRA coverage until June 2, 2010, by votes of 59-38 in the Senate and 289-112 in the House. By only adopting another extension, however, Congress set the scene for continuing partisan wrangling over the needs of unemployed workers.

Other Congressional responses to unemployment are a mix of tax credits for businesses, direct assistance for unemployed workers, funding for job creation efforts, assistance to cash-strapped states, etc. The status of several employment bills is indicated in the chart below. In addition, Congress should pay special attention to those workers suffering much more acute unemployment and requiring more intense and targeted approaches, including youth, persons of color, and those with less than a high school diploma. See The Color of Economic Under-Recovery in this e-news by JSRI fellow Alex Mikulich, S.J., for further discussion of the disparate impact of unemployment and recovery strategies on people of color.

Some observe that even HR 4812, if passed by Congress, is not enough to meet the staggering needs for new jobs in this country. Estimates are that we are now “roughly 11.1 million jobs below what would be needed to restore the pre-recession unemployment rate.”³ Deepak Bhargava of the Center for Community Change argues persuasively that, while HR 4812 is a good first step, the nation needs a dramatic and bold initiative, analogous to the Works Progress Administration of the Roosevelt administration, to turn around the employment situation in this country.⁴

[1] Josh Bivens and Heidi Shierholz, For Job Seekers, No Recovery in Sight (Economic Policy Institute Briefing Paper #259), March 31, 2010, pp. 2-3, at http://www.epi.org/publications/entry/bp259/ [14 pages].

[2] Ibid., p. 3.

[3] Bivens and Shierholz, p. 1.

[4] Deepak Bhargava, Jobs We Can Believe In, Huffington Post, April 8, 2010 at http://www.onenewspage.com/news/Politics/20100408/9908148/Deepak-Bhargava-Jobs-We-Can-Believe-In.htm (accessed April 16, 2010).