http://danvillesanramon.com/blogs/p/print/2014/01/18/but-for-grace-


Local Blogs

By Tom Cushing

But For Grace

Uploaded: Jan 18, 2014

What's your monthly budget? How much do you pay for food, gas/electric/water and cable, for your car, its insurance, gas and maintenance, your rent or mortgage? And which of those would you do without, if your household income fell to $1200 per month (about $15,000/year)?

That's the dilemma faced by more than half-a-million of your fellow Californians and the families they serve today -- and every other day of every week. That number includes 36,918 souls even closer to home, in Contra Costa and Alameda counties. It's the number of unemployment assistance recipients among your friends and neighbors, fellow citizens with whom we-all rub elbows. They qualify for those safety net payments because they were employed, are now involuntarily unemployed, and they are continuing to seek new work. Payments vary according to lost income -- $300/week is the state-wide average, against a $450 maximum. For what it's worth, these receipts are taxable income (S-P bait).

But wait – there's more. There is an entire spectrum of unemployment periods among those recipients: from a few weeks, to every week since the Great Recession hit, in 2008. Roughly one-third of them, the so-called "long-term unemployed," just lost their eligibility for benefits entirely, as the federal fraction of this program of interim assistance was allowed to expire at year's end. What would your budget look like with No money coming-in?

Drilling down further, who are these folks who are now beyond the reach of assistance provided by the rest of us? First, they are older – unemployment among young workers is higher, but they tend to find new jobs faster, or drop-out of the labor force and go back to school for retraining and career reinvention. Older workers 'qualify' for fewer jobs (they 'over-qualify' for lots of others), they seek jobs consistent with their former positions (many of which have disappeared permanently), and age discrimination remains a cruel, if illegal, reality. Still, they continue to seek work, often desperately.

The long-termers are also overwhelmingly white. It's true that blacks and Hispanics are over-represented among the group, just as they were over-represented in the industries, like manufacturing and construction, that have been hardest-hit by the continuing economic unpleasantness. The discrimination scourge continues for them, as well. Still, more than 70% are Caucasian men and women.

And, as a group they are both financially depleted from subsisting on vastly curtailed incomes, AND incredibly frustrated. Statistics bear-out the notion that the longer you are without work, the harder it is to get new work. 25% of newly unemployed workers quickly get new jobs, whereas only 8.6% of those jobless for a year-or-more find employment. Average time to find a new job has also doubled – from 19 weeks in 2007 to 38 weeks today. Link And Link.

Still, they persist in looking. The first article linked above demonstrates that the long-term unemployed doggedly continue to pursue new employment: the percentage of those leaving the labor force out of fatigue, frustration, going back to school – or indolence – remains basically constant in the low 20% range, regardless of duration. [Disclosure: I had a year-long bout with unemployment in the first half of the 1990s. In retrospect, I had placed an exceptionally risky career bet. I can vouch for the immense frustration, depression and interpersonal turmoil inherent in those situations. In my case, I had to drop back, re-establish professional credentials for CA circumstances, redeploy my career at its mid-point and climb back up the income ladder.

As a bit of history, this type of aid was never meant to be a permanent dole. It was and is intended to act as a bridge – a pool of money we pay-into together, and draw from as needed to forestall individual financial catastrophe. It was established in this country in 1935 as part of the New Deal, and is financed by state and federal taxes. It may be denominated as "FUTA" on your records, as employers pay-into a specified fund based on their numbers of employees and the stability of the employment they provide. States administer the assistance, and can borrow from the feds when their own funds are depleted.

Until recently, the system was sufficient to meet the needs of most temporarily displaced workers. It was established and is funded, however, to cover the circumstances of another, healthier and more stable economy, as well as a less calamitous recession. Current circumstances have simply overwhelmed those assumptions, and yet more help is needed.

CA has borrowed some $10 billion from the federal fund, to-date – it simply can't be repaid at current rates, even if the economy magically takes flight – and yet the need persists. 1.8 million long-unemployed Americans have lost their meager checks as of January 1, several thousand in our counties – and, as above, they are the folks Most in need of more help.

So how do we, as a society, respond? One option is to do nothing. This notion holds some appeal for those who have never tasted these bitter circumstances. It allows them to speak gravely of the 'moral hazards' of long term dependence on 'government' assistance (as if we hadn't all paid-in to the insurance pool together).

They also call this assistance program only a symptom cure, and deflect focus from the suffering by opining that, instead, we need to improve the economy. Remember that old saw about the alligators interfering with draining the swamp? This kind of thinking suggests that the 'gators and the swamp are the same problem – but they're not. I'm all for improving the economy, but not by ignoring the immediate plight of the jobless. It's not an either/or proposition, and neglect will not put food on anybody's table.

Another option is to extend the assistance, but require that it be "paid-for." This seems to be a responsible approach in its broad-brush theory. In practice, however, it comes with a very limited menu of funding sources – all of them comprising other elements of the social safety net. Defense, which accounts for a large share of the federal budget and a larger share of its waste, is somehow off-limits. This option also assumes a 'fixed pie,' in that any new funding is also assumed-away.

In its actual, cynical details, therefore, it's a "rob Pauper to pay Poor" strategy that is unhelpful, at best. If you want to open the defense-side to cuts involving, say, the $32 billion Littoral Combat Ship that even the Navy wishes it could scuttle, please be my guest. But if you want to take it out of Granny's Medicare, you'll deserve your introduction to the business end of her walking stick.

Finally, we could recognize that unemployment aid is an important part of the social compact we've made with each other. Further, that it needs to last as long as it's needed, as defined by actual circumstances abroad in the land. And if we need to collectively dig a little deeper – say, into record corporate profits to fund it through a FUTA increase – then so be it. I'm aware of the counter-argument/theory that this would only convince employers to reduce their exposure by jettisoning jobs I just think that's precious nonsense.

Like the perennial dire predictions about the consequences of minimum wage hikes, it has some Econ 101-level appeal – but it never actually happens in the real world because other factors out-weigh its effects. And like the minimum wage, there are some things that are social imperatives – promises the members of this national community have made to each other about the minimum decencies of life in these United States. Those commitments need to be kept.

This promise of assistance is made not only out of goodwill and community, but out of self-interest, as well. At the end of the day, there -- in that unemployment line – but for Grace, goes each of us.

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