LABOR FORCE
Changes in labor force participation, in five-year increments:
1978: 63.2 percent
1983: 64 percent
1988: 65.9 percent
1993: 66.3 percent
1998: 67.1 percent
2003: 66.2 percent
2008: 66 percent
2013: 63.2 percent
Source: Labor Department
A cutoff of benefits for the long-term unemployed has left more than 1.3 million Americans with a stressful decision:
What now?
Without their unemployment checks, many will abandon what had been a futile search and will no longer look for a job — an exodus that could dwarf the 347,000 Americans who stopped seeking work in December. Beneficiaries have been required to look for work to receive unemployment checks.
Some who lost their benefits say they’ll begin an early and unplanned retirement. Others will pile on debt to pay for school and an eventual second career. Many will likely lean on family, friends and other government programs to get by.
They’re people like Stan Osnowitz, a 67-year-old electrician in Baltimore who lost his state unemployment benefits of $430 a week. The money put gasoline in his car to help him look for work.
Osnowitz says a continuation of his benefits would have enabled his job search to continue into spring, when construction activity usually increases and more electrical jobs become available.
He says he’s sought low-paid work at stores like Lowe’s and Home Depot. But he acknowledges that at his age, the prospect of a minimum-wage job is depressing.
“I have two choices,” Osnowitz says. “I can take a job at McDonald’s or something and give up everything I’ve studied and everything I’ve worked for and all the experience that I have. Or I can go to retirement.”
Unemployment benefits were extended as a federal emergency move during the 2008 financial crisis at a time of rising unemployment. The benefits have gone to millions who had exhausted their regular state unemployment checks, typically after six months. Last month, the extended-benefits program was allowed to expire, a casualty of deficit-minded lawmakers who argue that the government can’t afford to fund it indefinitely and that unemployment benefits do little to put people back to work.
Outside Cincinnati, Tammy Blevins, 57, fears that welfare is her next step. She was let go as a machine operator at a printing plant in May. Her unemployment check and a small inheritance from her father helped cover her $1,000-a-month mortgage and $650 health insurance premium. Now, with her benefits cut off and few openings in manufacturing, she dreads what could be next.
“I’m going to have to try the welfare thing, I guess,” Blevins says. “I don’t know. I’m lost.”
Others plan to switch careers. After being laid off last summer as a high school history teacher, Jada Urquhart enrolled at Ohio State University to become a social worker.
Urquhart, 58, has already borrowed against her house, canceled cable TV and turned down the thermostat despite the winter chill. Without an unemployment check, she plans to max out her credit cards and take on student loans to complete her degree by 2015.
“I’ll be 60 when I graduate,” she says. “If I do one-on-one or family counseling, I can work forever.”
One sign of the persistently tight job market: The percentage of Americans either working or looking for work has reached its lowest monthly level in nearly 36 years, the Labor Department said Friday. The unemployment rate fell in December to 6.7 percent from 7 percent. But that drop occurred mainly because more Americans stopped looking for jobs, many of them out of frustration. Once people without jobs stop looking for one, the government no longer counts them as unemployed.
Jesse Rothstein, an economist at the University of California, Berkeley, who has studied the long-term unemployed, has found that extended benefits help both the recipients and the economy — by fueling consumer spending.
“A Band-Aid doesn’t heal a serious wound, but that isn’t much of a reason not to use one,” Rothstein says.
But some congressional Republicans argue that guaranteed unemployment checks that go on for more than a year lead many workers to take excessive time to try to land an ideal job, instead of settling for whatever they can find.
Senate Democrats and President Barack Obama have pushed to restore the program. But they need to agree on how to pay for it— a key demand from Republicans concerned about a potential $20 billion hit to the federal budget deficit.
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