Monday, December 20, 2010

As the Big Hand Giveth, the Little Hand Taketh Away

The past couple of days, as I've surfed across the news sites as always, I've seen a mix of articles about the extension of the Unemployment Compensation included in the Tax Cut extension bill. The good news was that the bill included an extension of the Unemployment Compensation for another 13 months (why they couldn't have matched the two year extension of the tax cuts is beyond me but that's another story). Of course, since it appears that one in three workers will see their taxes go up under the "tax cut extension," it shouldn't be that much of a surprise after all.

But then I saw this article via CNN pointing out that folks in a number of states won't even get to receive up to 99 weeks of Unemployment but are capped out at 60 weeks.

Here's how the system works: The jobless collect up to 26 weeks of state benefits before shifting to the extended federal program. Federal benefits consist of up to 53 weeks of emergency compensation, which is divided into four tiers, and up to another 20 weeks of extended benefits. The maximum is 99 weeks.

But not everyone can collect benefits for that long. Extended benefits, as well as the last two tiers of emergency compensation, are tied to state unemployment rates. So as their state job picture brightens, the jobless stop qualifying for long-term benefits.

To be eligible for the fourth tier of emergency benefits, which last up to six weeks, the average state's unemployment rate must be above 8.5% for three months. Similarly, states lose their eligibility for the third tier of benefits, which last up to 13 weeks, if their rate falls below 6%. Extended benefits have a more complicated formula tied to different gauges of unemployment.

The bottomline in this is that for those long term unemployed in these states, it doesn't really matter when their benefits are cut off, it just matters that the benefits are cut off. In these cases sixty-one weeks of being out of work is the same as one hundred weeks of being out of work in other states. The end result for both groups is they are SOL. So we have the "99ers" and now the "virtual 99ers". We enter the Christmas week with folks staring a hard part of life in the face.

This article from the AP via MSNBC discusses the effects some folks have had to deal with, including the anger at having politician and pundits proclaim the long term unemployed as "lazy" as if there aren't five applicants for every job opening.

Then there was this article from today's (Monday December 20) NY Times about how many companies are turning to temporary help rather than hiring permanent employees:
Temporary workers are starting to look, well, not so temporary.

Despite a surge this year in short-term hiring, many American businesses are still skittish about making those jobs permanent, raising concerns among workers and some labor experts that temporary employees will become a larger, more entrenched part of the work force.

This is bad news for the nation’s workers, who are already facing one of the bleakest labor markets in recent history. Temporary employees generally receive fewer benefits or none at all, and have virtually no job security. It is harder for them to save. And it is much more difficult for them to develop a career arc while hopping from boss to boss.

Temp workers allow businesses to squeeze wages and benefits further, especially the benefits. Hourly rates for temp workers are a fraction of the hourly rates for "regular" employees. As one of the people in the Times article said:
...he made anywhere from 10 to 50 percent less while working in temporary jobs than he did at the produce company. He has also been without health insurance all year. None of the interim employers or temporary agencies have contributed to a 401(k) plan, nor has he been able to save much on his own.

But of course, for the NY Times, it is also important to provide a platform to the Wall St Whiner Brigade so that they could complain (mostly anonymously) about how they might not receive a bonus this year, even though their base compensation might have been doubled:
In some ways, a zero bonus should not come as a surprise to many bankers. As a result of the 2008 financial crisis, Wall Street firms like Goldman Sachs and banks like Citigroup raised base pay substantially in 2009 and 2010. They were seeking to placate regulators who had argued that bonuses based on performance encouraged excessive risk.

At Goldman, for instance, the base salary for managing directors rose to $500,000 from $300,000, while at Morgan Stanley and Credit Suisse it jumped to $400,000 from $200,000.

Even though employees will receive roughly the same amount of money, the psychological blow of not getting a bonus is substantial, especially in a Wall Street culture that has long equated success and prestige with bonus size. So there are sure to be plenty of long faces on employees across the financial sector who have come to expect a bonus on top of their base pay. Wall Streeters typically find out what their bonuses will be in January, with the payout coming in February.

Pardon me if I don't shed a tear of sympathy for someone making $500K because they don't get a bonus on top of the salary.

I won't go into the hypocrisy of the incoming GOP Congress complaining about salaries for Federal workers at the same time they are giving their own staff members 8% or more annual increases in wages over a ten year period.

And because I can:

No comments:

Post a Comment