Jobless Parents, Frightened Children

The New York Times reports that, in Ohio, the proportion of students receiving free or reduced price school lunches has gone from 33% in 2005 to 43% last year, and the proportion of disadvantaged students living in the suburbs has similarly increased. One suburb has gone from having 6% of students getting free or reduced price lunches in 2005 to 22% today.

That’s a lot of kids experiencing substantial deprivation, and it should serve as a real slap in the face to all the Republican politicians and pundits who’ve claimed that unemployment insurance encourages people to stay home or that jobless workers are just lazy. This is what unemployment looks like: kids asking their teachers if they’re going to have to move—while really worrying that they’ll be homeless. It’s not uncommon and it’s hitting people who had been comfortably middle class.

A few houses down from the Kehlers on Deer Creek Drive, Bill Cameron, who has three children in high school, has been out of work for two years since losing his $119,000-a-year job as a manager at American Electric Power.

Over on Eastland Court, Grace Koo and her now ex-husband, who have two children at Wilson Hill, were both laid off and went from making about $160,000 a year to zero. Ms. Koo, who had been a store design and construction director for Limited Brands, attributed the divorce to many things gone wrong, including their sinking economic status. “For months, both of us were home together, unemployed,” she said. “We’d fight over money.”

On Buck Trail Lane, the Hymers went from $150,000 a year to zero. Their son, Zachary, a second grader, and their daughter, Kennedy, who’s in fourth, qualified for reduced-priced lunches. The Hislopes on Friend Street also qualified for reduced-priced lunches, but as things worsened — the father, Mike, a shop foreman, has been out of work two years — they qualified for free lunches.

Many of these families may never get back to the lifestyles they once had:

While several parents interviewed for this column eventually got jobs, no one was making anything near their old salaries. The Hislopes, Hymers and Kehlers are making half. Ms. Koo is making a third. Mrs. Hislope’s two daughters have been able to continue playing sports because their schools waived participation fees and the sports booster clubs helped. The Hislopes were one of 10 families that the middle school picked to give $300 toward Christmas.

Those are parents who may not be able to put their children through college as they once planned; kids who will grow up with a sense of uncertainty and fear, with the memory that homelessness can seem like a real possibility.

Wall Street opposes companies hiring. But what about you? Do you really want our economy doing this to children and their hard-working parents?

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Wall Street Frowns on Hiring

Google Inc. is hiring. The company plans to hire over 6,000 new employees this year. From NPR:

The company outlined its hiring plans Tuesday with The Associated Press without providing many specifics beyond its pledge to hire more people than it did in 2007 when it added 6,131 workers. Google hired nearly 4,600 people last year to end 2010 with 24,400 employees. Based on its hiring commitment, Google’s work force will increase by at least 25 percent this year.

Wow! A big company, doing so well that they want to hire thousands of new employees! This is great news, right?

Uh…not so much….

But Google’s push to further expand a work force that grew by 23 percent last year may not be as well received on Wall Street, where the Internet search leader’s spending has annoyed some investors who would prefer a more frugal approach in hopes of fatter returns.

Wall St believes that as long as the rising tide lifts the luxury liner, the rest of the boats can founder.

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Labor Secretary Responds to the State of the Union

Everyone seems to have an opinion about the State of the Union. Tuesday night alone, political junkies tuned in for the Republican Party’s rebuttal speech, as well as Rep. Michele Bachmann’s Tea Party response. The next day we were inundated with opinions from columnists and pundits. They loved it, hated, or something vaguely in between. However, one of the most honest and sincere responses came from Labor Secretary Hilda Solis.

Sec. Solis spoke about the importance of investing in good jobs and the opportunities that lie ahead for the American workforce:

Two years after the worst recession in our lifetimes the stock market is roaring back, corporate profits are at an all time high, the economy is growing again, and in each month last year the private sector added jobs. That’s progress. But we don’t measure the progress of our nation simply by looking at the bottom line. Our progress, our prosperity, must also be linked to the opportunities available to us. In that regard there remains much work to be done.

Our nation and especially our workers face big challenges and strong competition. But isn’t rising to the challenge what has defined our nation throughout history? Isn’t that spirit what continues to make this country a beacon of opportunity?

That promise of opportunity is certainly what drew my parents to each seek a better life in Los Angeles. It’s also what led them to instill in me a belief that when faced with big challenges, you don’t shrink away from the fight, you think boldly, and you do big things.

That’s what I heard from the president last night — bold ideas and a plan to do the big things that will keep the American workforce leading the world not only in our lifetimes, but for generations to come.

Creating the jobs and industries of the future will require America doing what it does best — investing in the creativity, imagination, and ingenuity of our people. No nation has workers more productive than ours. No country has more successful companies, inventors, and entrepreneurs. So when the president says that 80 percent of America’s electricity will come from clean sources by 2035, I know we will meet that goal.

I believe it because I’ve seen the promise of clean energy technology, and I’ve seen the impact of green jobs. Take Kwanasia Smith, a young woman in Oakland, CA. Thanks to the Recovery Act, she attended a summer jobs program studying solar paneling, mounting, and wiring. Her dedication and desire impressed her employer, and she was able to launch a career as a result.

These new industries and new jobs require new training and a strong educational foundation. To compete for these jobs we must win the race to educate our current and future workforce. Adding 100,000 science and math teachers to provide our students with the skills they need for the jobs of the future is the very type of big thing that will allow us to continue our competitive edge.

We’re also working to revitalize the community college system and permanently extend the American Opportunity Tax Credit, making a college education more accessible and affordable than ever.

I was first attracted to public service because I saw a need to speak up for the most vulnerable in my own community. That belief provided the foundation of my career in the House of Representatives, and it drives my work as your Labor Secretary.

Mixed Messages

How’s this for a mixed message?

Obama premises our national strategy on education and research. That strategy is premised on hiring 100,000 new teachers. Instead, we are firing up to 300,000 teachers. And Obama’s answer to closing up to a 400,000 teacher gap – essential to the success of his entire strategy – is to encourage students to become teachers. What he doesn’t propose is anything that would give the school districts the money to retain and hire the 400,000 teachers. One of Obama’s applause lines was: “We do big things.” Yes, that is part of what has made America great. Indeed, we do giant things. Obama’s address was his chance to set out the big things he would do. We got instead an aspiration: “we want to prepare 100,000 new teachers….” Budgets are policies made real. If you don’t have a plan to get the money, what you “want” doesn’t happen. Obama isn’t even trying to get the additional money to the states and localities. He’s freezing those kinds of federal expenditures.

Education is important, we’re told. But not important enough to fund adequately. Teachers are important, we’re told. But their livelihoods are under attack. And so on.

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Jobless Claims Rose Last Week

From Bloomberg:

Applications for jobless benefits increased by 51,000 to 454,000 in the week ended Jan. 22, Labor Department figures showed today. Economists forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls rose, while those collecting extended payments fell.

and

The number of people continuing to collect jobless benefits increased by 94,000 in the week ended Jan. 15 to 3.99 million. Economists forecast the number would increase to 3.87 million.

The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.

In the state of the union address, President Obama said that extending the tax cuts would create more jobs to add to the million jobs created by the private sector last year. I’ve pointed out that math isn’t my strong suit in the past, but one million jobs is barely a drop in the bucket, when one thinks about either the official unemployment number of 9.4 percent or the real one, which is closer to 20% of the country being out of work.

Still, this kind of unemployment is never presented as any sort of an urgent crisis, despite the fact that it’s affecting local, state, and federal revenue. This is the language of obfuscation:

Economic expansion in the U.S. is “continuing, though at a rate that has been insufficient to bring about a significant improvement in labor market conditions,” the Federal Open Market Committee said yesterday in its statement after a two-day meeting in Washington.

Unemployment is too high to be consistent in the long run with policy makers’ congressional mandate of full employment, the Fed said, repeating that progress toward its objectives has been “disappointingly slow.”

It’s disappointing that we seem to be wedded to policies that aren’t working.

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“There Are Just No Jobs”

The Washington Post profiles unemployed Working America member Ethel Cherry:

Like many people in her neighborhood, Cherry, 44, has been out work for more than a year. She is barely getting by with $250 a week in unemployment benefits, food stamps and the generosity of her mother, five siblings and friends.

Her husband died suddenly early last year. They were married just three years, and there was no insurance. Her car was repossessed last summer. She was almost evicted in September. Yet, somehow, she manages to keep two kids in college and two younger ones – including a daughter with special needs – from losing their way.

The former job coach and retail clerk never made more than $25,000 a year when she was working. But, as she prepared to watch Obama lay out his policy agenda for the year, she was hopeful.

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White House to Overhaul the Corporate Tax Code

In last night’s State of the Union, President Obama briefly mentioned the problems with America’s current corporate tax code. Most notably, the code is packed with so many loopholes and tax breaks for specific industries like the Oil Industry and Big Banks, that a large chunk of the tax code burden falls to small businesses. Misguidedly, businesses are given incentives to ship jobs overseas, instead of hiring struggling Americans.

It is time for a change. The National Journal reports:

The issue could offer a rare opportunity for collaboration with Republicans in Congress. But while there is considerable consensus about the appeal of reform, the administration doesn’t want the effort to widen the deficit. Some officials said they are worried that bringing any tax reform proposal would end up more as tax cuts than tax reform.

“That was a big point of debate and pushback,” explains a source familiar with a meeting between Geithner and a number of corporate CFOs on January 14. “A number of the CFOs said, ‘If you want to achieve objective No. 1, which is developing a competitive system, there shouldn’t be a heavy emphasis on doing so in a deficit neutral and deficit reducing fashion.’”

White House officials say the annual cost of “tax expenditures” — special tax breaks — is already $1.1 trillion. That’s more than the government actually collects in personal and business taxes under the current code. “It’s more holes than cheese,” one White House official said last week. Given the challenge of taming the government’s trillion-dollar budget deficit, Obama’s team isn’t willing to make the problem even worse while Republicans clamor for deep spending cuts.

Rather, the administration seems to prefer a strategy akin to its approach to health care reform: By convincing concerned private interests to buy into the White House approach, or at least not oppose it publicly, officials hope the political lift will be easier. During the health care fight, insurers gained millions of new customers while agreeing to restrictions on their behavior. Now, the administration is offering support for a variety of corporate tax reforms in exchange for backing on fiscal responsibility.

America needs a corporate tax structure without loopholes for irresponsible businesses like the Big Banks, which caused the current economic meltdown, or the Oil Industry, who was responsible for the BP spill last April. We need a tax structure that provides incentives for hiring Americans, not for shipping jobs overseas. Hopefully, President Obama and the current Congress will work to make this a reality.

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Miracles, Real and Otherwise

Until recently, we were supposed to believe in the Texas Miracle—that allegedly the recession had passed Texas by, with, as Paul Krugman described it, “the usual suspects claiming that it proves the virtues of capitalism red in tooth and claw, or something.”

Only it wasn’t actually so immune to unemployment problems or budget problems.

But the so-called Miracle gave Gov. Rick Perry the opportunity to do a lot of posturing about how Washington should stay out of Texas’ business, because things were just great. And the stimulus was a waste of money. Blah blah blah.

Well, color me shocked.

Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.
Texas, which crafts a budget every two years, was facing a $6.6 billion shortfall for its 2010-2011 fiscal years. It plugged nearly all of that deficit with $6.4 billion in Recovery Act money, allowing it to leave its $9.1 billion rainy day fund untouched.

So to recap: There wasn’t really a Texas miracle, and the illusion that there was was created in large part by federal recovery funds.

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Interesting Things Around the Internet

  • Wow.

    > Federal agents recovered $2.5 billion from health care fraud judgments in the budget year that ended in September, a record-breaking amount they credit to whistle-blowers and a renewed effort from the Obama administration.

    Health and Human Services Secretary Kathleen Sebelius plans to announce today the money won in cases under the False Claims Act, as well as ways last year’s health care law will prevent fraud in 2011. Overall the government recovered $4 billion, including $1.5 billion in administrative findings, rather than court action.

    “Our aggressive pursuit of health care fraud has resulted in the largest recovery of taxpayer dollars in the history of the Justice Department,” Thomas Perrelli, associate attorney general, said in a statement to USA TODAY. Whistle-blowers received about $300 million in 2010 — from 15% to 25% of the amount recovered — after turning in fraud they saw in the workplace, the government said.

  • Dying to work in Philadelphia.
  • What free health care clinics are facing today:

    Until recently, only the working poor could partake of this lifeline in an industrial park near a business that rents moon bounces. But then chief executive officer Maureen Tomoschuk began to see a strain of despair afflicting the newly – and unexpectedly – unemployed.

    “We’d have donors calling us, saying, ‘I lost my job and coverage for our family. I don’t know where to turn. Can you help’?” she recalls. “We had to change.”

  • Workers fall behind, the wealthy continue to rise.

Good News for Social Security

Apparently President Obama will not be endorsing the Deficit Commission’s recommendations on Social Security in his State of the Union speech.

From the WaPo:

Over the weekend, the White House informed Democratic lawmakers and advocates for seniors that Obama will emphasize the need to reduce record deficits in the speech, but that he will not call for reducing spending on Social Security – the single largest federal program – as part of that effort.

Liberals, who have been alarmed by Obama’s recent to shift to the center and his effort to court the nation’s business community, applauded the decision, arguing that Social Security cuts are neither necessary to reduce current deficits nor a wise move politically. Polls show that large majorities of Americans in both parties – even in households that identify themselves as part of the tea party movement – oppose cuts to Social Security.

Good. Apparently all the effort put into calls, letters, emails, and petition signing was not in vain. At least for now.

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