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About this blog: The Raucous Caucus shares the southpaw perspectives of this Boomer on the state of the nation, the world, and, sometimes, other stuff. I enjoy crafting it to keep current, and occasionally to rant on some issue I care about deeply...  (More)

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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.
What is it worth to you?


Posted by spcwt, a resident of Danville,
on Jan 19, 2014 at 3:48 pm

Americans don?t need another lecture from Tom about helping our fellow man.

Americans are generous. Last year we donated $300 billion to charity. We also donate time, 15.2 billion hours of service last year, worth an estimated value of $296.2 billion.Web Link

On top of that, we generously give in ways that aren?t counted in official statistics: Cash to strangers; Paying people for jobs we could do ourselves; Taking in family members and friends who need a place to stay., etc.

Government programs are needed too, of course. But money is tight, so we need to prioritize our spending, focusing on the truly desperate who cannot possibly fend for themselves.

Americans already pay $4 trillion per year in Fed & state taxes. And we borrow ~$1 trillion per year. That?s $5 trillion a year of total government spending. That is a staggering amount. Think about that for a minute. In other words, the govt. spends $15,000 per person. $60,000 for a family of four. Every year!

And we?re just getting started. Wait until the Baby Boomers retire and all those Medicare bills come due. And don?t forget about paying for Obamacare.

We have an unsustainable spending addiction.

Tom sounds like a South American dictator, saying we should raid ?record corporate profits? in order to give it to ?the people.? We?ve all seen what happens when governments raid corporate profits to fund social spending. Businesses invest elsewhere. Growth stagnates. Jobs disappear. American corporations continually risk being undercut by foreign competition.

Europe has figured this out. They?re all cutting their corporate tax rates in order to entice businesses to invest. The average corporate tax rate in Europe is now ~ 24%...and falling fast. In the U.S., the combined Fed & state rate is around 40%. Even Obama advocates for cutting corporate tax rates.

Sorry Tom, you?ll need to find a different piggy bank to rob.

Americans don?t need to be forced to help their fellow man. We?re doing fine.

Posted by Tom Cushing, a resident of Alamo,
on Jan 20, 2014 at 8:20 am

S-P, all you?ve done is to trot out a few unattributed gee-whiz numbers that are completely untethered to Anything that would make them meaningful. It?s a gee-whiz big country.

Further, those figures are utterly not on-point in terms of Any relationship to the plight of the long term unemployed. Perhaps such passionate rationalization makes you feel better ? I?m reasonably sure that nobody who?s suffering the deprivations and indignities of unemployment has been comforted by it, in Any way. They could use some com-passion.

You attempt to continue this mythology that Americans are over-taxed ? they are not. Rates are historically low, and loopholes abound to the point where you and Warren Buffett pay a lower % of your incomes into the common till than his assistant pays, making $60K/year. At least he?s bothered by it. And please spare us that ridiculous ?the rich pay more? meme ? that is simply a function of the fabulous wealth that has been accumulated, not the meager % of that pile paid-into the system that facilitates the accumulation. We do not have a spending addiction; we have a wealth addiction. And lousy revenue and regulatory systems that enable that obsession.

During this recovery-such-as-it-is, (overtaxed!) corporate profits have soared, the stock market has soared, productivity has soared ? wages have not even increased at all, jobs have not returned to pre-recession levels and unemployment has remained stubbornly high. What?s wrong with this picture? Forget it ? I?m asking the wrong guy.

Eighty years ago, we made a promise to each other to assist those among us who?ve lost their jobs involuntarily, while they continue to look for work. That system has worked well in every recession until this current one ? the worst one. This time, it?s not enough. That?s not a lecture, S-P, them?s just the facts.

So, do we break the promise, divert funds from elsewhere, or kick-in a little more to the funding kitty? Pretty simple set of choices, although the second one has been skewed to the point that it has lost its meaning. I understand that you?d vote with Madame Antoinette. You?re ?doing fine.?

BTW ? you could think of it this way: that money would go right back into the system (you know, for incidentals like food) ? none will be saved. Since the benefits of the system currently redound exclusively to the top end, why, it?ll come right back to you! You win again! Cha-ching!

Posted by Cholo, a resident of Livermore,
on Jan 20, 2014 at 1:50 pm

Hundreds of thousands of citizens/residents benefit from governmental programs. What matters most is that children and vulnerable adults receive needed medical/dental care and various other educational services. Proper nutrition and safe housing are a given. Homeless NOT!

Children/adults and society benefit when the unemployed receive the proper educational skills so that they can become more productive citizens. I don't care about the race/ethnicity of the recipients of assistance as long as they eventually become a part of America's work force. For various reasons, some cannot work and other will not work. I'm convinced that incarcerated populations also benefit from education/re-training out of a life of crime.

Who pay? YOU PAYS! WE PAYS! Until laws are changed, you can crow until the cows come home...PAY UP!

Income goes up but not for everybody. Your blanket statement doesn't fly.
When it's time to raise the rent, I do and thus have more income! Some renters deserve a break and they earn it. No rent increase means you do something in exchange to improve the property to get a rent break! I always work with renters and give them a fair shake. I give money back to renters who take special care of their apartments and the yard.

I do what I can do to share my good fortune and to care for fellow Americans.


Posted by Cholo, a resident of Livermore,
on Jan 21, 2014 at 6:17 pm

spcwt clearly does not understand Argentine history. The reference to a "South American dictator" is insulting to all madres who lost husbands, children, relatives, and friends. The figure of the disappeared is closer to 40,000. They didn't just die for a weekend, they are DEAD.

During the Bloody War, the facts are known. No military "dictator" offered to give anything to anybody except children/babies who were stolen from their biological parents and given to supporters of the military junta. In 2014, the pain of trying to locate blood relatives continues for the stolen babies who are now adults.

Not all baby boomers are positioned to retire. Most live below or near the poverty level. Only a minority of boomers are financially secure in 2014. Many will continue to work until they drop.

Cut corporate taxes and the rest of society will die prematurely and fewer babies will survive.

Posted by Jake, a resident of Alamo,
on Jan 23, 2014 at 3:17 pm

As I read the above comments I am convinced that you are in violent agreement with each other in the basic proposition of wanting a good and equitable standard of living for all. The passion arises when the solution to the problem is proposed. We can't help being influenced by our own experience and how things have been done in the past, however, I believe the fundamentals of societies, business and world trade have changed to the extent that the traditional ways of looking at things will not address all the issues. Automation, technology and globalization are displacing workers and moving jobs faster than societies can react to. In some ways for many the concept of relaying on employment and work compensation alone is and will be obsolete. While there can be a debate in defining poverty, the wealth is relatively easy to measure and there is evidence that there is a concentration of wealth world- wide. The most common element of gathering wealth is investing. While I offer no universal solution I propose that for some an early introduction to investing may provide the supplemental income needed for wage stagnation and possible unemployment. It would almost be like getting a pension while working. I suspect there is not one solution that fits all, however, what I proposed has worked for me, but it took time and discipline. Rich did not get rich by work alone.

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