Unemployed Are Not the Reason Unemployment Funds Are Broke

OK. I guess technically the title is not true. If folks hadn't been laid off and collected Unemployment Compensation, the funds would just be sitting in the various state coffers, unused. But the unemployed are not the reason the economy tanked; the unemployed are not the ones sending jobs overseas; the unemployed are not the ultimate root cause of the problem.

Michigan started things back in March but has since been followed by Missouri and now Florida. (Other states may have done so as well, these three are the ones I know for sure have done this.) Florida's new law actually goes beyond Michigan and Missouri, as bad as their laws are. Where MI and MO cut the maximum period for collecting state level unemployment compensation from 26 weeks to 20 weeks, Florida ties the benefits to the overall state unemployment rate. Via the Tampa Tribune article linked above:

TALLAHASSEE — Out-of-work Floridians would receive fewer state benefits while businesses pay less tax under a controversial proposal approved Friday by a divided Legislature.

The deal, which Gov. Rick Scott is expected to sign into law, immediately cuts unemployment benefits by 11.5 percent.

Jobless Floridians would continue to receive a maximum payment of $275 per week, among the lowest of any state in the country. But they would be paid for no more than 23 weeks, instead of 26.

...snip...

The bill also creates a sliding scale that cuts and adds weeks of benefits based on the unemployment rate. Unemployment compensation would drop to as low as 12 weeks if the average unemployment rate drops to 5 percent or lower. A week would be added for every 0.5 percent the jobless rate climbs.

I can guarantee you that the newly unemployed person is not going to give two shits to know that the overall state unemployment rate is X percent so the number of weeks of benefits are limited accordingly. All that newly unemployed person is going to see is s/he is out of work and the state supplied safety net is full of gaping holes. Annie Lowrey at Slate on Friday offered this analysis:

More Mixed Jobs Messages

In the last few days since the release of the official employment number for January, there have been a variety of jobs related articles I've found as I surf through various news sites and the articles have been all over the map in conclusions. Some of the articles have even recognized that things really aren't getting better for the long term un and under employed while others keep trying to provide more spin at things getting better.

Saturday's (Feb 4, 2011) NY Times had Floyd Norris attempting to reconcile the weak job creation numbers withe the drop in the official Unemployment Rate. His conclusion shows just how ef'fed up the numbers are:

Over all, from January 1979 through March 2010, the first estimate was off — either higher or lower — from the final figure by a median of 74,000 jobs. If that holds true now, there is a 50 percent chance that the final number for January will be somewhere between a loss of 38,000 and a gain of 110,000. And there is an equal chance that it will be outside that range.

None of that reduces the importance of jobs data, particularly in the months after a recession ends. But it does serve as a reminder that the first attempt at estimating employment is far from authoritative.

Of course, there's Catherine Rampell in today's (Tuesday Feb 8) Economix blog from the NY Times showing there are still nearly five applicants for each job:

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.

Giving Up Is Not an Option

This morning while I was surfing through the various news sites, I spotted this article from Fortune (via CNN) with the headline:

What happens when the jobless give up?

As one of the millions of long term un/underemployed I can only say that for myself, giving up is not a viable option. I search everyday for a position within my professional field of Software Quality Assurance and Testing.

I have written a few posts about my skills, both official (resume skills) and unofficial (not pertinent to the resume but job skills nevertheless). I have written about why I love my professional field and about being an unemployed human and not a statistic. I have written about how folks have it far worse than I do, coping with the job search as well as numerous times discussing the idiocies of our elected officials and the talking heads.

They Really Think We Are Stupid

Whew! A bit dusty over here. I hadn't realized it had been over three months since I last posted something here but with all the news this week I guess I figure it's time to throw out my 2¢ once again.

The official unemployment rate is now at 9.8%. Nine point eight per cent. And this is just the "official rate" reported by Labor is the "U3." The truer rate is probably contained in the U6 which is over 17%.

It is December 2010 and this is the longest sustained stretch of unemployment over 9% since the Great Depression. While ADP in their monthly reporting of jobs added for November showed an estimated 93,000 new private sector jobs for November 2010, the official Department of Labor report showed only 39,000 jobs added in total for November 2010. This is in an economy that needs to add 100k - 150k jobs per month just to maintain status quo. Now we add in that two million people currently collecting unemployment will be losing their unemployment insurance benefits during December 2010 and another uptick in initial jobless claims for the last week of November and it is going to be a horrendous Christmas season for a lot of people in the United States.

As One of the "Small People," I Can Use a Job

Is it a pre-requisite for senior executives at BP to be so gaffe prone? First we have Tony Hayward and his foot chewing now followed by the linguistic stylings of Chairman Carl-Henric Svanberg:

I hear comments sometimes that large oil companies are greedy companies or don’t care,” he said. “But that is not the case with BP. We care about the small people.

The apologists have been out in force, attempting to find ways to explain this as anything other than arrogance and a true reflection of Svanberg's (and BP's) feelings for those who are not them. The most common excuse I've seen is that it's purely due to language difficulties, since English is not Svanberg's native tongue.

I will grant that English is a difficult language to learn and master and I applaud all those people around the world who have elected to learn the language, exceptions included. They've mastered something I've spent my life trying to master while I've not been able to master my few attempts at learning another language (Spanish was the one I attempted and though my instructors were not the greatest, it's still my own damn fault for not learning.) I have a reasonable knowledge of grammar and a fairly good vocabulary and for the life of me, I can not really come up with a phrasing or way that Svanberg could have said this without insulting others. Rather like Leona Helmsley's "Only the little people pay taxes" quip.

Jobs, Unemployment, Firings

Yesterday, Digby hit on one of my favorite talking head idiocies about how folks collecting Unemployment Compensation are just lazy bums getting a free ride vacation. I like to call this the "Larry Kudlow School of Economics" since I've heard Kudlow spout this piece of uninformed gibberish multiple times over the years.

This post by Digby was brought about by Congress's dithering once again on passing a further extension of Unemployment Benefits, currently set to expire on June 2.

Yeah, these tens of millions of our fellow citizens are just a bunch of lazy asses who are living it up on 300 a week. There's plenty of jobs, these people just refuse to work because they like all this cushy free money.

I just don't know what to say about this. You have a 10% official unemployment rate which doesn't count all those who never qualified (small business owners, independent contractors etc.) and it doesn't count all those who have already fallen off the rolls. And yet politicians are buying this nonsense that there are plenty of jobs but people just won't work? That's completely ridiculous. These people should be ashamed of themselves.

This article is from 2/2009 and shows the maximum weekly Unemployment Benefit for each state. The payments range from $230 per week for Mississippi and $240 for Arizona (lowest two states) up to $628 for Massachusetts and $584 for New Jersey (the two highest). California pays a maximum of $450 and New York maxes at $405.

But it's not just the non-existent jobs. From yesterday's NY Times, we have the story on cutbacks to Child Care subsidies. More exercises in penny wise, pound foolish operations.

Despite a substantial increase in federal support for subsidized child care, which has enabled some states to stave off cuts, others have trimmed support, and most have failed to keep pace with rising demand, according to poverty experts and federal officials.

That has left swelling numbers of low-income families struggling to reconcile the demands of work and parenting, just as they confront one of the toughest job markets in decades.

This is the downside for most all of the various legislation passed by Congress that provides "subsidies" for poor individuals. We'll most likely see it with the subsidies from the Health Insurance Reform. In order to achieve some faux "bi-partisan" ideal against deficit spending, it is always the poor and least able who bear the brunt of these actions. Never shall it pass that taxes are raised for those who have the most of course. After all, only the poor people who actually need support are worthy of sacrificing.

We're not looking for hand outs. We're looking for the little bit of support to help us make it together as a society.

And because I can: