For nearly a year, roughly 15 million Americans have been officially unemployed, according to the monthly reports. So I know I am not alone. But there are many times when it doesn’t feel that way.
On a freezing night with a biting wind, around the holidays this past winter, I went to see the film Up in the Air with my wife, her sisters and my two teenage kids. Laura mentioned the film in a great post last January. The film’s protagonist, played by George Clooney, works for a firm that gets hired by other companies to fly him around and fire people from their jobs. In addition, he has the temerity to promote a kind of sidecar career for himself, lecturing people looking for work about how they need to clean out their backpacks, or whatever.
I sat there trying to contain my anger, while part of me felt a deepening sadness — not just for the people being thrown out of work, but for the spreading epidemic of corporate callousness and for the needless devastation wrought by this monster recession. On the way out of the theater my kids asked me what I’d thought of the film, and all I could say was “this all just makes me so angry,” adding I was glad that I still had my job.
Two months later, I did not.
For nearly twenty years I had managed a successful, multi-million-dollar retail store, part of a specialty chain. In a move to further reduce store payrolls, which along with overall benefits had already been reduced several times in recent years, it was determined that my modest salary — which was below the median household income in my state — no longer fit the new payroll scheme. The day I was informed of this I was also told it was my last day.
I was stunned. To say that I had been the face and the name, the personification of the store and the company in a highly coveted market would be an understatement. Yet, no new role was offered, no severance, nothing. Less than a year earlier, after a significant restructuring in which a number of long-time employees had been let go, particularly at the firm’s headquarters, the company’s president had indicated to me that my job was safe. So much for that.
I came home to find my wife having lunch in the kitchen. When I told her what had happened, she cried. I held her and told her we’d be alright. But part of me didn’t really believe it. That I haven’t cried yet probably isn’t a healthy thing.
Within a couple of weeks, my long-time assistant manager was also let go. We happen to both be 59 years old. It had been determined that the new payroll scheme would not support having two assistants. Apparently, the private equity group that had financed the company’s buyout several years earlier now wanted to see more of the ‘R’ part of their ‘ROI’. Think back to my post titled “Sharks”.
I applied for unemployment insurance for the first time in my life. I began submitting claims online, but was told on the phone that I would not see any payments for a while, because my eligibility had to first be determined in a telephone hearing — and, because of the high volume of first time claims (this was, by the way, late February 2010) that hearing wouldn’t be scheduled for a month. Fortunately, I had filed my 2009 tax returns early and we’d already received our refunds.
I filed to continue our family’s health insurance with the COBRA administrator, and for the federal COBRA subsidy — the one that, while you’re unemployed, temporarily reduces monthly premiums by 65 percent, but that got stripped out of the jobless aid bill in the House last week. So, unless the continuation of that program is restored, newly unemployed people will no longer be eligible for the reduced premiums.
Despite the lightning fast online application process, COBRA insurance approvals appear to take weeks. So prescription medications, of which there are several for my son and myself, were paid for in full until the COBRA insurance was confirmed. I postponed an annual physical checkup.
Meanwhile, of course, the networking, resume writing, posting, emailing and door-knocking began and has continued unabated. Unlike many folks I’ve heard about, I’ve actually had several responses and even some interviews. But, as yet, no actual offers. Have I mentioned that I’m 59 years old?
The stories of these mundane details may vary from person to person. Mine are certainly not unique. What are far more significant are the stories of how being unemployed affects your life, your thoughts, your emotions, your self-esteem and your sense of social worth.
On these matters, I can only speak for myself. What struck me most immediately was that, without my job, I had no place to go to. Not just the routine of going to work, but having a sense of ‘place’ and belonging in and to a place, was suddenly taken from me. The psychologist James Hillman has written extensively on the subject of the soul being nourished by its sense of place, and that our workplaces are, or should be, vital places that help instill a sense of shared purpose, of mutual encouragement, so that they themselves have a sense of soul.
But increasingly our workplaces are being robbed of their soulfulness, replaced by the cold domination of callous cost-cutting and disregard for people. The layoffs don’t just harm those laid off. It is as if the lost souls of those laid off linger in the workplace, haunting those who remain on the job.
While it is difficult to admit, for me the sense of rejection has been palpable. Several decades of experience and prior accomplishments at times feel all but negated, as if they not only mattered little but may as well not have happened at all. I find myself struggling, at times to fight off a sense that society has deemed me expendable.
And a fear of the future, which while I was working had receded largely to lurk only in a far-off corner somewhere, is now back with a vengeance. What will happen if I need surgery? What if my old car dies on me? Will we ever be able to have a real vacation or travel anywhere again? Will I be able to help my kids go to college in a couple of years? Will I ever be able to afford not to work? Will I ever be able to work?
The staggeringly huge number of unemployed Americans has been fading from the headlines. In a series of diaries posted on Daily Kos in the spring and late winter of 2009, I noted to the astonishment of some that with nearly 15 million unemployed, the number of unemployed Americans was more than it was in 1933 at the depths of the Great Depression. I made note of that fact again in my very first post here on Main Street last September. And it’s as true now as it was then.
Now, however, there appears to be a growing sense that mass unemployment is something that must be accepted, as if it’s somehow unavoidable. Moves are already underway by some in Congress to chip away at and begin to dismantle the jobless aid programs for the unemployed. Two months ago, when I wrote “Wall Street Declares War on the Unemployed” some readers probably thought I was exaggerating in order to make a point.
Where is the outrage? Where the fierce urgency to find and implement effective solutions to this, our most pressing national economic emergency? My sense of being socially expendable is increasing. When a society begins trashing its human capital on a mass scale, it is headed down a very ominous road. How can this be happening?
One reason, I think, is the sheer invisibility of much of our current-day unemployment. Gone are the Depression-era breadlines and the mass street demonstrations of the 1930s by unionists and the unemployed. There’s no longer a need to stand in line at the unemployment office to file your claims — it’s all done so privately and invisibly online. And the sense of isolation, which Susan wrote about here, is reinforced by the media’s disregard and the implicit message that if you’re unemployed it’s your own fault.
But it’s the silence and the impersonal invisibility of our nation’s unemployment nightmare that must be countered creatively. Perhaps this blog post will help.
Instead of tackling the massive jobs crisis head-on, with large-scale legislation that combines needed solutions on multiple fronts, the Senate appears to be adopting a piecemeal approach.
The most urgent immediate priorities should be extending jobless benefits and other safety net programs, and providing major fiscal relief to state and local governments. Those two pieces could be legislated separately if need be. But the Senate’s current plan starts with the wrong piece. And a not-so-good piece at that. The proposed tax break for employers that is the core of the Senate bill would likely have little impact on job-creation.
It’s great that the Senate is prepared to do something to help create jobs. Unfortunately, its most likely course of action, the Schumer-Hatch tax credit will probably create almost no jobs.
The basic deal with Schumer-Hatch is provide a tax credit equal to the 6.2 percent employer side of the Social Security tax. This credit would last for the rest of 2010. If the employee is kept on the payroll for a year, then the employer gets an additional $1,000. Only workers who have been unemployed for at least 60 days are eligible for the credit.
There are two basic problems with the credit. First, there are more than 4 million workers hired every month already. A firm could get the credit for any hires among these 4 million who has been unemployed for 60 days, even if they would have hired the person anyhow. This is a lot of money for nothing.
The second problem is that the credit is far too small to provide any significant incentive to hiring.
The New York Times, which called the bill “puny” and “pathetic”, wrote:
Most of the $15 billion would cover the cost of a payroll tax holiday in 2010 for employers that hire unemployed workers. Since there are more than six unemployed workers for every job opening, a tax break for hiring is worth a try. But the proposed credit is too small to have a noticeable impact. At best, it would create about 250,000 additional jobs from April through the end of the year, according to an analysis by Moody’s Economy.com.
An even bigger problem is that the hiring credit is unlikely to work as intended unless it’s paired with other federal support to generate and maintain consumer demand — mainly extended unemployment benefits and more fiscal aid to states. No matter what Congress does to lower the cost of labor, employers won’t hire unless they believe demand will be sufficient to sell whatever the business produces.
A detailed analysis by Timothy J. Bartik, senior economist with the W.E. Upjohn Institute, published last week by the Economic Policy Institute (EPI) warned “Not all job creation tax credits are created equal”:
Well-designed employer tax credits can encourage significant job creation, and at an affordable cost per job. But the devil is in the details. The employer tax credit in the Senate’s “jobs bill” is likely to create few jobs, and at an excessively high cost.
The Senate’s employer tax credit is based on a design proposed by Senators Chuck Schumer and Orrin Hatch. The Schumer-Hatch proposal has several questionable design details: (1) credits are awarded for hires, not net job creation by employers; (2) the credits are limited to hires of persons unemployed at least 60 days; (3) the credit rate is only 6.2% for the rest of 2010; and (4) there is a modest retention bonus of $1,000 per new hire retained for a year, but little up-front cash to encourage job creation.
Are there alternative employer tax credits to the Schumer-Hatch approach that would be more effective in creating jobs? Yes, there are a number of good alternatives, including the proposal made by President Obama, proposals made by Senators Robert Casey and Russ Feingold, and Congressman Bob Etheridge, and finally the proposal that we developed for EPI. These better proposals have the following features:
They provide incentives that are tied to whether the employer expands employment and payroll, not simply on whether the employer is hiring. Net employment and payroll expansion is what we want to reward, not simply hiring and keeping the number of employees the same.
They focus simply on employment and payroll expansion, not who is hired, which is more complicated to administer and monitor and reduces employer interest in a tax credit.
They are large enough that it is more plausible that the credit will significantly change employer behavior, rather than simply being claimed for a hire that would have been undertaken anyway.
They provide sufficient immediate assistance that the credit can boost job creation with those employers concerned about cash-flow.
If we want to effectively encourage job growth through a tax credit, we need a program that tightly targets that goal with a large enough credit to significantly affect employer’s hiring decisions. And if we want to effectively target who gets hired, we need to run such efforts through the workforce system, which can perform the required matching, monitoring, and support.
According to our estimates, a tax credit for firms equal to 15% of expanded payroll costs would lead them to hire an additional 2.8 million employees next year. Such a credit would have to be:
1. Wide-ranging. The tax credit should be designed to stimulate a wide range of jobs across economic sectors and across all kinds of firms, regardless of size or current profitability.
2. Temporary. It should be of limited duration to encourage job creation when the labor market is weakest and to limit the cost to the treasury.
3. Large. It should be large enough so that it will lead firms to hire new employees and cause a significant number of jobs to be created economy-wide.
4. Efficient. The tax credit should target new job creation as much as possible and not simply be a handout to businesses.
In line with these principles, we suggest a broad-based refundable tax credit for employers that expand their workforce in 2010 and 2011. In the first year the credit would be equal to 15% of the net increase in that portion of a firm’s payroll subject to Social Security taxes. In the second year the credit would drop to 10%. The reduction in the second year would encourage firms to hire sooner rather than later and would provide a significant incentive for expanded employment.
By basing the credit on total Social Security payroll taxes, it would also reward expansion of work hours as well as employment. And basing it on that portion of wages subject to Social Security payroll taxes ensures that the credit does not apply to wages increases for very high wage earners.
EPI’s job-creation tax credit is the fifth component of their American Jobs Plan, the basis of the five-point plan supported by the AFL-CIO and its Jobs for America Now coalition partners. In the interest of saving the Senate a lot of extra work, perhaps it should simply adopt this entirely workable jobs plan — piecemeal if the Senate insists.
As President Obama prepares to deliver his first State of the Union address, the economic recovery he would certainly like to see is in danger of being derailed by an inadequate response to the massive jobs crisis and a potential meltdown in a public sector threatened by huge state and local budget shortfalls.
The American Recovery and Reinvestment Act of 2009 included $144 billion in federal aid to state and local governments, and to a large extent helped avert mass layoffs in the public sector. But that aid extends only through this year, and the budget situations facing states and cities look worse down the road as tax revenues decline and public service funds dwindle.
Without major, additional and extended aid to states and municipalities, hundreds of thousands, perhaps millions of new job losses could occur — virtually assuring a continuing deep recession and a lengthy postponing of any real recovery.
In a statement today, Gerald W. McEntee, president of the American Federation of State, County and Municipal Employees, AFL-CIO (AFSCME) said:
Unfortunately, we have learned in the past year that the American Recovery and Reinvestment Act (ARRA) was not big enough to stimulate a full-scale recovery. Unless we act now, more Americans –- including nearly a million public employees –- could lose their jobs as current federal investments run out and the vital services Americans need during tough times are cut to the bone. There simply won’t be an economic recovery if Washington turns its back on Main Street USA.
Alarm bells on the situation facing state and local governments have been ringing for some time. In an OpEd titled Invitation to Disaster earlier this month New York Times columnist Bob Herbert warned:
We didn’t pay attention to the housing bubble. We closed our eyes to warnings that the levees in New Orleans were inadequate. We gave short shrift to reports that bin Laden was determined to attack the U.S. And now we’re all but ignoring the fiscal train wreck that is coming from states with budget crises big enough to boggle the mind.
This is an arrow aimed straight at the heart of a robust national recovery. The Center on Budget and Policy Priorities has pointed out that if you add up the state budget gaps that have recently been plugged (in most cases, temporarily and haphazardly) and those that remain to be dealt with, you’ll likely reach a staggering $350 billion for the 2010 and 2011 fiscal years.
This is not a disaster waiting to happen. It’s under way.
Without substantial new federal help, state cuts that are now merely drastic will become draconian, and hundreds of thousands of additional jobs will be lost. The suffering is already widespread.
Additional fiscal relief for state and local governments is a key component of the American Jobs Plan proposed by the Economic Policy Institute:
We recommend that the federal government extend the state and local budget relief provided in the Recovery Act by $150 billion over the next year and a half, through state fiscal year 2011. The additional relief will save between one million and 1.4 million jobs.
In his excellent new book, False Profits - Recovering from the Bubble Economy, economist Dean Baker writes:
“At the top of any stimulus agenda should be the very mundane effort to get more money to state and local governments.”
“Nothing is more harmful to the economy presenting a downturn than government spending cuts and tax increases that amplify the downturn’s impact. Furthermore, many of the cuts are to essential services, such as health care for low-income families or special school programs for children who are having difficulties. Government support for these programs is needed more than ever during the downturn.” (thanks to the author for his permission to quote)
It is nothing less than the nation’s social infrastructure that is threatened by the budget crises at the state and local level. ProPublica reports that with two dozen state unemployment insurance funds already in the red
The record 20 million Americans who collected unemployment insurance benefits last year landed on a safety net that was already deeply frayed.
An extensive, in-depth report just issued by the Center on Budget and Policy Priorities makes clear that failure to extend critical funding initiatives included in last year’s Recovery Act, such as the Temporary Assistance for Needy Families (TANF) Emergency Fund, would have dire consequences.
The impending reductions in basic cash support will cause affected families to cut back their expenditures. This will cause a further loss of jobs, as well as a significant increase in severe hardship and deprivation.
The Hunger Action Network of New York State said Jan. 19 after Paterson’s budget address that the proposed cuts to welfare and homeless program spending would not only increase hunger and poverty in the state, but would drive up costs for taxpayers by placing the financial burden on local governments.
“The federal government consistently ranks New York among the worst in the country in helping welfare participants into jobs,” said Andreas Kriefall, upstate director of Hunger Action Network. “Far more just end up moving from [TANF] to the safety net program, which is paid for entirely by state and county tax dollars. The governor claims to be using this budget to get the state on a sounder fiscal footing. He is in fact, digging the hole deeper.”
The federal government itself, though, need not assume the entire responsibility of assisting state and local governments. In an intriguing column last month, The Nation editor Katrina Vanden Heuvel proposed that the Federal Reserve do for needy states and municipalities what it has already done on a massive scale for the banks through zero-interest loans and special lending facilities:
I know states need to deal with balanced budget mandates and debt ceilings, but I also know there is some flexibility there. Shouldn’t states have access to zero-interest credit just like the Banksters? And couldn’t that make a significant contribution to their overall fiscal picture?
“Even if it just made short term loans–90 days, for example–it could still save California and other struggling states a lot of money,” said Dean Baker, co-director of the Center for Economic and Policy Research. “If it reduced their rate on short-term borrowing by 1 percentage point, this could be worth $100 million a year or so to a state like California that would have to do lots of short-term borrowing.”
The Fed has the authority–granted by law in the 1930s–to lend to virtually any public or private entity in emergency conditions. At a time of emergency in the states–with schools being shuttered, libraries closed, and health services gutted–isn’t it time to use that power to help devastated state and local governments?
Perhaps if Ben Bernanke wants to keep his job he should do what’s right for the social infrastructure of Main Street America.
If ever there was a time for a fierce urgency to confront the massive jobs crisis in America, that time is certainly now.
Today the AFL-CIO, NAACP, Leadership Conference on Civil Rights, National Council of La Raza and the Center for Community Change announced they will urge the White House and Congress to move forward on a new comprehensive plan for job-creation and real economic recovery.
This is big news — and a major step forward for labor, economic and civil rights groups and the progressive community to build a movement for jobs and recovery.
AFL-CIO President Richard Trumka announced the key aspects of the new jobs plan at the Economic Policy Institute’s Spotlight on Jobs forum in Washington, D.C. earlier today.
Promoting this urgent policy initiative on a new webpage America Needs Jobs Now the AFL-CIO summarizes the core components of the plan:
No one needs to tell America’s families that unemployment and underemployment are at crisis levels. We need jobs—and we need them now.
Wall Street has gotten its bailouts. Now it’s time for Main Street to get some immediate help.
The AFL-CIO is calling on Congress and the Obama administration to take five steps now to care for the jobless and put America back to work.
1. Extend the lifeline for jobless workers. Unless Congress acts now, supplemental unemployment benefits, additional food assistance and expansion of COBRA health care benefits will expire at the end of the year. They must be extended for another 12 months to prevent working families from bankruptcy, home foreclosure and loss of health care. Extending benefits also will boost personal spending and create jobs throughout the economy.
2. Rebuild America’s schools, roads and energy systems. America still has at least $3 trillion in unmet infrastructure needs. We should put people to work to fix our nation’s broken-down school buildings and invest in transportation, green technology, energy efficiency and more.
3. Increase aid to state and local governments to maintain vital services. State and local governments and school districts have a $178 billion budget shortfall this year alone—while the recession creates greater need for their services. States and communities must get help to maintain critical frontline services, prevent massive job cuts and avoid deep damage to education just when our children need it most.
4. Fund jobs in our communities. While workers go without jobs, important work is left undone in our communities. We should put people to work restoring our environment, providing child care and tutoring, cleaning up abandoned houses and more. These are not replacements for existing public jobs. They must pay competitive wages and should target distressed communities.
5. Put TARP funds to work for Main Street.The bank bailout helped Wall Street, not Main Street. We should put some of the billions of dollars in leftover Troubled Asset Relief Program funds to work creating jobs by enabling community banks to lend money to small- and medium-size businesses. If small businesses can get credit, they will create jobs.
America’s jobs situation would be even more dire without the economic stimulus program President Obama and Congress enacted, which has saved or created 1 million jobs. But the depth of this crisis demands that we do more—and that we do it now, before more people lose their jobs, their homes, their health care and their hope.
This is a bold first step. Much needs to be done to build the coalition to generate political support for a comprehensive jobs and recovery policy. Right now, I am fired up — having written months ago about The Coming Battle for Jobs and Recovery.
But on Main Street most of the ‘green shoots’ we’re seeing are the ones coming up through the floorboards of the foreclosed homes, shuttered factories and abandoned shops and businesses.
After last month’s really bad jobs numbers, which pegged the official unemployment rate at 9.8% and reported the loss of another 263,000 jobs in September, there was renewed talk from the White House and the editorial pages about the need to address the employment crisis.
There has been movement in Congress on extending unemployment benefits for an additional 13 to 20 weeks to help the hundreds of thousands of unemployed Americans on the verge of exhausting their benefits. This should be an emergency safety net no-brainer. But as Sen. Kirsten Gillibrand (D-NY) writes at the Huffington PostSenate Republicans are blocking the measure, as if to show that they have neither hearts nor brains.
But beyond the obvious necessities to extend jobless benefits, COBRA access and food stamp relief, precious little has been offered thus far to go further in addressing the jobs crisis and the need for a real recovery on Main Street.
One of the clearer voices offering substantive, specific ideas has been former Labor Secretary Robert Reich. Writing on his blog in the wake of last month’s unemployment numbers, he asked, somewhat rhetorically, Specifically, What Should Be Done For Jobs? and outlined these four steps:
(1) Use existing authority under both the stimulus package enacted earlier this year and the nefarious TARP bailout fund — extending and combining them into a fund to make up for state and local cuts in public school budgets, childrens’ health, public health (we need workers to administer swine flu vaccine) and public transportation. Instead of bailing out banks and giant automakers, we should switch to bailing out public services that average people need.
(2) Propose a one-year payroll tax holiday on the first $20,000 of income. Republicans as well as Blue Dog Dems could go along with this, and it would be a highly progressive tax cut since 80 percent of Americans pay more in payroll taxes than they do in income taxes.
(3) Give small businesses a “new jobs tax credit” for every net new job created over the next year. Granted, under normal circumstances this sort of jobs credit doesn’t have much effect, and it’s difficult to separate hires that would have happened anyway from net new ones. But we’re not in normal circumstances; small businesses, which are responsible for most new jobs, still aren’t hiring. They need a boost.
(4) Dramatically expand the Small Business Administration’s lending programs and have the Fed buy up the SBA’s debt. Big banks are not lending to small businesses. TARP has been an utter failure in this regard. The SBA and the Fed should circumvent them and help small businesses get the capital they need, so they can start hiring again.
These steps, Reich writes, would be beneficial and not too tough to do.
With the next unemployment report, for October, scheduled to be released in two weeks, we should be hearing more about specific proposals to support the jobless, create new jobs and generate a real recovery here on Main Street.
I am unemployed, and have been now for a little more than three months. People like me often say “I lost my job” — as if their situation were the result of some personal failing or act of stupidity. Like “I lost my car keys” or “I lost my wallet.” No. Let me say, instead: My job was taken from me.
