The jobless recently got a bit of a reprieve when Congress — begrudgingly and with much rancor — approved a temporary extension of unemployment benefits.
But the respite ends, and financial uncertainty for millions of Americans returns, when Congress convenes this month and again debates whether extending federal payments helps or harms the unemployed.
Some House Republicans argue that any long-term extension lets the jobless turn down work, keeps the unemployment rate high and costs taxpayers billions of dollars.
Some Democrats scoff at the notion that a meager weekly stipend — typically one-third of a person’s previous salary — keeps the jobless from taking a job, especially with 6 million Americans out of work for more than half a year.
“I was glad to hear about the extension, but it’s blindingly obvious that it will again be a very contentious issue,” said Matt Leger, a laid-off Atlanta printer who receives a $227 weekly unemployment check. “A lot of people feel that at least they have a little breathing space for financial reasons. But anybody who’s paying attention to the political arena knows that it’s only temporary.”
Unemployed Americans in 21 states, including Georgia, are eligible for up to 99 weeks of jobless benefits. House Republicans sought to limit the amount to 59 weeks, yet they ultimately capitulated and agreed to a two-month extension of benefits with the agreement that Congress would revisit the issue early in the next session.
President Barack Obama signed off on the plan which included an extension of payroll tax breaks and Medicare doctors’ fees. House and Senate negotiators will revisit all issues — in the midst of a politically charged election year — after Congress returns in mid-January.
The recession technically began four Decembers ago. Eighteen million Americans have since received federal unemployment benefits — more than 640,000 in Georgia alone. Hundreds of billions of dollars have been spent on jobless benefits that cover rent, utilities and food.
More than 1 million long-term unemployed Americans would’ve lost their payments by the end of January if Congress had failed to extend the program. By year’s end, another 5 million jobless would have exhausted them.
In Georgia, with a 9.9 percent unemployment rate, more than 162,000 people would have run out of benefits in 2012, according to the U.S. Department of Labor.
U.S. Rep. Jack Kingston, the Savannah Republican, says many of the long-term unemployed have “no incentive to get a job.”
“It’s counterintuitive, but when their unemployment runs out, they get a job,” he said in a recent interview. “I know that in politics you don’t believe that, but in economics it seems to be reality.”
Many, though, don’t get a job. Millions of Americans no longer receive unemployment benefits and still can’t find a job. They aren’t counted in unemployment figures.
Leger, a pre-press operator laid off four months ago, said he has interviewed for a dozen jobs and trolls the Internet for freelance or tutoring positions.
“If businesses aren’t finding the employees they want, it may be in large part because people are not qualified for the positions they’re offering or the employers are not offering a rate of pay high enough for people to sustain themselves or their families,” Leger, 48, said. “I suspect that the congressman’s views on unemployment compensation derive from his ideology rather than any actual experience of people on unemployment.”
Kingston said he has talked to “hundreds of employers” who say they can’t fill vacancies because the jobless would prefer to remain that way. When pressed by The Atlanta Journal-Constitution, Kingston offered two Savannah companies as examples.
Ray Gaster owns three building supply companies and employed 85 people before the recession. Today, he counts 29 workers and looks to hire a garage door installer.
“There are people out there that have the talent, but a lot of them are sitting on the sidelines because it’s fairly comfortable,” Gaster said. “Some people who worked for us before are doing odd jobs and getting paid $10, $15 an hour with no taxes. So they have an income stream [in unemployment benefits] and also have the underground economy.”
Americans laid off through no fault of their own can apply for state unemployment benefits that typically last up to 26 weeks. (In Georgia, payments last, on average, 13 weeks, according to the state Labor Department.) Once state benefits are exhausted, they can apply for federal compensation which can last up to 73 additional weeks. Recipients must actively look for work.
“They are not freeloaders,” Labor Secretary Hilda Solis said during a recent conference call with reporters. “They are hard-working people who spend all day every day filling out applications, sending out résumés and looking for work.”
Not all of them do. Obama’s Council of Economic Advisers reported last week that “unemployment compensation can potentially be a disincentive for some workers to search intensively or to accept an offer if they receive one.”
Economists at Rutgers University tracked more than 2,000 unemployed Americans between 2009 and 2011 and discovered that those who did not receive unemployment compensation were more likely to get a job within a year than those who did receive benefits.
“History shows that the longer you extend unemployment insurance, the longer unemployment is extended as well,” said U.S. Rep. Tom Graves, a Republican from Ranger. “It’s very clear, talking to employers, that it’s manipulating the marketplace and not allowing or incentivizing individuals to go back to work sooner.”
But the president’s economic council noted that “any possible disincentive effect is muted because the average state benefit is not large, only about $300 per week.” In Georgia, the average weekly payment is $231, according to the U.S. Labor Department.
Solis and many economists add that the payments get spent, not saved, and fuel local economies while keeping the unemployed from burdening other federal programs, like food stamps and long-term disability.
Leger, who is updating his computer skills and contacting temp agencies, says now is not the time to curtail benefits.
“The economy seems to be picking up steam, but it’s still nowhere near to replacing the jobs lost since 2008,” he said. “If we can just keep people going a little longer they might be able to find work. The [benefits] would help them get over the last few months of the bad patch.”
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