House Republicans Draining at Least $600 Million a Week from the Economy

At the end of 2013, an emergency unemployment compensation extension program that started in 2008 under President George W. Bush expired, meaning 1.3 million jobless workers lost benefits that helped them house and feed their families. President Barack Obama and congressional Democrats have made it clear they want the program to go on, but House Republicans are refusing to act. Now Harvard economist Lawrence Katz says the “fiscally irresponsible” decision is costing America’s economy at least $600 million a week.

“It is actually fiscally irresponsible not to extend unemployment benefits,” Katz said. “The long-run cost to the taxpayers will be much higher from disconnecting people from the labor market.”

The program provided an average weekly payment of $305 to people who have been unemployed for longer than six months. The end of the program directly harms the economy because unemployed workers spend most, if not all, of the income they have as soon as they get it. The failure to extend the program not only is a major problem for the families directly involved and a drag on the economy, it will cost over 300,000 jobs if a solution isn’t found, according to the Economic Policy Institute.

Labor Secretary Thomas Perez explained the need for the emergency program to continue:

When Congress first passed this version of emergency unemployment compensation in 2008, and the president [George W. Bush] signed the law, the unemployment rate was 5.6%, and the average duration of unemployment was 17.1 weeks. Today, the unemployment rate is 7%. The average duration of unemployment is now 36 weeks.

The administration also noted that the long-term unemployment rate, the percentage of the workforce that has been looking for work for 6 months or longer, is more than 2.5%, well above the 1% economists say we should expect during normal times.

Reposted from AFL-CIO NOW

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Senate Passes Lopsided House Budget, Unemployment Insurance Extension Still Up in the Air

The U.S. Senate passed the House bipartisan budget agreement (64–36) last night, sending it to President Barack Obama, who has signaled he supports the package.

As we reported last week, the House budget averts another government shutdown and temporarily relieves some sequestration budget cuts but leaves long-term jobless workers out in the cold and inflicts further harm on federal workers, who have sacrificed more than enough to budget-cutting already.

In a statement earlier last week on the budget plan, AFL-CIO President Richard Trumka said the deal “provides temporary relief from sequestration budget cuts over the next two years but does not represent the clean break from budget austerity that our economy so urgently needs.”

Trumka said it is “shocking” that congressional Republicans “have refused to include an extension of unemployment benefits” in the budget agreement. At the end of December, federal unemployment benefits will expire for 1.3 million jobless workers—while lawmakers are home for the holidays.

Call 1-877-318-0483 and tell your representative to extend unemployment insurance now. 

This morning at Politico’s Playbook Breakfast with Mike Allen, Trumka said Democrats need to step up and fight for policies that help the working class like unemployment insurance and raising the minimum wage.

The video of Trumka’s interview is available here.

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Put a Stop to This: Bad Credit? No Job for You!

Today’s jobless workers face new discriminatory barriers to finding work in a broken economy. Some employers won’t consider out-of-work applicants for job openings. And more and more employers run credit checks, leaving long-term jobless workers, who have likely fallen far behind in their bills and seen their credit scores tank, on the streets.

Today Sen. Elizabeth Warren (D-Mass.) introduced a bill to stop employers from requiring prospective employees to disclose their credit history or disqualifying applicants based on a poor credit rating. Says Warren:

Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness—let people compete on the merits, not on whether they already have enough money to pay all their bills.

Even as the economy is slowly turning around, the recession and financial crisis continue to take a toll on working families. Many of whom are hardworking, bill-paying people who have seen the credit ratings damaged when they or a family member lost a job or a small business and saw the value of their homes plummet. Savings evaporate and payments get missed. Says Warren:

Most people recognize that bad credit means they will have trouble borrowing money or they will pay more to borrow. But many don’t realize that a damaged credit rating also can block access to a job.

While at one time it was common belief that a credit history could provide insight into a perspective employee’s character, Warren says that recent research has shown that an individual’s credit rating has little or no correlation with his ability to succeed at work. A bad credit rating is far more often the result of unexpected personal crisis or economic downturn than a reflection of someone’s abilities.

She also says, “This is one more way the game is rigged against the middle class.”

A rich person who loses a job or gets divorced or faces a family illness is unlikely to suffer from a drop in his or her credit rating. But for millions of hardworking families, hard personal blow translates into a hard financial blow that will show up for years in a credit report.

People shouldn’t be denied the chance to compete for jobs because of credit reports that bear no relationship to job performance and that, according to recent reports, are often riddled with inaccuracies. Click here to become a citizen co-sponsor of The Equal Employment for All Act.

The bill is co-sponsored by Sens. Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Patrick Leahy (D-Vt.), Edward Markey (D-Mass.), Jeanne Shaheen (D-N.H.) and Sheldon Whitehouse (D-R.I.).

Rep. Steve Cohen (D-Tenn.) introduced the bill in the House late last year.

Photo via U.S. Senator Elizabeth Warren on Facebook

Reposted from AFL-CIO NOW

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North Carolina Unemployment Rises As Attacks on Workers and Voters Continue

The radical policies of North Carolina Gov. Pat McCrory and his legislative allies is having the opposite effect they said it would.

North Carolina’s unemployment rate rose to 8.9 percent in July, higher than the national average of 7.4 percent. That makes it the fifth highest in the nation.

Moreover, the sectors that grew are those that have the lowest wages:

Over the past 12 months, the leisure and hospitality sector has added 21,500 jobs, more than any other sector.

[N.C. Justice Center public policy analyst Allan] Freyer said that U.S. Bureau of Labor Statistics data shows that those jobs pay an average of $8.30 an hour.

“That says the state’s growth opportunities are in ultra-low-wage jobs,” Freyer said. “That’s not the direction we want to be going.”

In recent months, Gov. McCrory and his allies enacted enormous cuts to unemployment insurance, which Bill Rowe of the N.C. Justice Center called “one of the most radical, is not the most radical proposals in the country.” They also passed a tax plan that lowers income tax and corporate while slicing the earned income tax credit for struggling families.

Gov. McCrory claimed both measures would help “job creation.” The same refrain was used by Gov. Scott Walker for his actions in Wisconsin to strip collective bargaining rights from public workers and his own tax plan that ended the state earned income tax credit. Wisconsin is also experiencing economic woes, also falling behind the rest of the country on employment.

What both governors are ignoring is that we know the path to prosperity: higher wages, public investment in infrastructure and education, and a tax plan that asks the rich to pay their fair share. Not the exact opposite.

But as McCrory’s recent voter suppression law shows, he’s not really interested in what the people think. He’s more interested in following the Walker model of ALEC-inspired, pro-corporate, anti-worker governance. In both North Carolina and Wisconsin, hundreds have gone to jail in recent weeks for protesting the state’s leadership.

If you’re in North Carolina, join our fight for working families by emailing Catherine at cmedlock-walton@workingamerica.org.

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Even Children Recognize the Impact of Income Inequality and Social Service Cuts

The latest post in the Workonomics series at Upworthy asks the question, “How Did We Get to a Point Where a Child Is Saying Sorry to Her Mom for Costing Her Money?” The video is an excerpt from the HBO documentary “American Winter,” which follows eight families struggling in the aftermath of the Great Recession. This clip shows how income inequality and cuts to social services have real consequences for families.

Reposted from AFL-CIO NOW

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What the Members of the “Pro-Hunger” House Caucus Should Know About Who Gets Food Stamps

It’s true: the number of recipients of food stamps have gone up since the start of the worst recession since the Great Depression. But it turns out that some of the loudest critics and attackers of the program represent constituents who have the most to lose from food stamp cuts.

Bloomberg reviewed 2,049 U.S. counties for food stamp usage. Among the 250 counties with the highest concentration of food stamp recipients, 227 are wholly within one congressional district, with 160 represented by Republicans and 67 by Democrats.

Many of those same Republicans voted for a farm bill this past June that cut about $2 billion annually from food stamps. Many of them also voted for a July 11 farm bill that stripped all funding for food stamps – that bill passed the House.

Rep. Hal Rogers (R-KY) voted for both bills. He represents the second poorest district in the country, Kentucky’s 5th, where 32 percent of residents receive SNAP benefits.

His district also includes Owsley County, where 52 percent of residents received SNAP in 2011, a higher proportion than any other county in America.

Reporting for Bloomberg, John McCormick and Greg Giroux found that Owsley County residents were supportive of keeping the supplemental income:

“Of all the things they could cut in America, it shouldn’t be the food stamp program,” said Marshall, 58, who received Social Security disability payments and is raising three grandchildren, ages 7 through 17, in Booneville, Kentucky, on a monthly income of $1,255, all from the state or federal government.

In Owsley County, the unemployment rate is 11.8 percent, according to the Kentucky Office of Employment and Training. Residents say few jobs are available in an area hit hard by the closing of coal mines…

“Almost everyone I know gets at least some food stamps,” said Sara Price, a Booneville resident who has used the program for about a decade and gets $333 a month for her family of six. “There used to be more stigma attached to it. There is no shame with it, if you are working and trying to make ends meet.”

Maxine Gibson, 47, said she gets $165 a month in food stamps that she uses for a grandchild and another child, ages 9 and 5, that she’s raising. With her Social Security disability and other government assistance, she said her household has about $1,500 a month in income. “I buy a lot of soup because it’s cheaper,” she said. “It really doesn’t last all month.”

But to ideological hardliners like Rep. Rogers, that doesn’t matter so much.

“If there was no deficit, they would still want to cut this kind of program,” Graham Wilson, the political science department chairman at Boston University, said of Republicans. “They have a fervent ideological belief that government should be cut back.”

Rep. Rogers was criticized in the local press for his votes. Yet just last year 84 percent of his constituents voted to send him back for his 16th term. Would they, and other SNAP recipients represented by Republicans, be so supportive if they knew what their lawmakers were up to?

Check out the Bloomberg piece, and while you’re at it, see what the Lexington Herald-Leader about Rep. Rogers’ votes.

Photo by Gage Skidmore on Flickr

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“Moral Monday” Spreads Across North Carolina

Since the end of April, Moral Monday protests have occurred every Monday in front of the state legislature in Raleigh, North Carolina.

The Moral Monday rallies have gathered thousands of supporters, and over 900 have been arrested through civil disobedience actions. These massive protests have been centered on issues of economic justice and basic fairness—cuts unemployment benefits, the failure to extending Medicaid for 500,000 uninsured people, cuts to public school funding, voter suppression, and other issues.

This Moral Monday protests have begun to spread across our state. This past Monday, in conjunction with the Raleigh protest, a Moral Monday march was organized in Greensboro. Since many people couldn’t travel to Raleigh to voice their support, activists organized a Greensboro Moral Monday rally to focus on voter ID laws and looming cuts to early voting.

Over 200 people marched and chanted, toted signs saying “Save Early Voting,” “Voter ID = Voter Suppression,” and “Keep Sunday Voting”.

“I thought it was wonderful,” said Working America member Carol Tweede, who attended. “Turnout was more than I ever expected. I feel very happy at these demonstrations, because everyone pulls together. It’s one great big body of people trying to help each other. It is so inclusive and nice to be around people who believe the same way you do, the right way.”

Across North Carolina, folks are standing up against the right-wing state legislature, not just in Raleigh.

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North Carolina Legislators Take Aim at the Unemployed, Hurt the Whole State

Across the country, it’s been a tough road out of recession, but North Carolina has had a tougher time than most: its unemployment rate is still nearly 9%, the fifth-highest in the country. Now the state is about to cripple its own economy further.

A new set of changes to unemployment benefits in North Carolina have just taken effect. With these deep cuts, the state legislature has also disqualified North Carolinians from extended federal benefits. So people who are facing long-term unemployment in North Carolina have just lost their entire income, without any corresponding increase in the number of jobs available. Indeed, cutting off benefits for so many people so abruptly is likely to slow down the state’s economy even more, as people will find it harder to buy the things they need, stay in their homes and support North Carolina businesses.

North Carolina’s state legislative majority was swept into the office in 2010 and 2012, thanks in part to clever redistricting and the investment of millions by Republican megadonor Art Pope. Now, Pope has been appointed to a key state economic office and the legislators he helped empower are going on a tear through public education, health care, voting rights and tax rates. These legislators’ attack on unemployment benefits is perhaps the clearest expression of a national agenda aimed at dismantling the safety net.

The silver lining is that people in North Carolina aren’t letting these attacks go unanswered. Weekly “Moral Monday” protests are drawing crowds of hundreds to the state capitol in Raleigh. Last week, 1,500 people came out to make their voices heard.

The changes to unemployment insurance, however, are taking place now, and that means families facing unemployment are losing hundreds of dollars every month—at a cost of millions to the state economy. It’s morally repugnant, but it’s also just stupid economics.

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Terrible, Corporate-Backed Unemployment Insurance Cuts Move Forward In North Carolina

Tell NC lawmakers to drop their draconian, hurtful, immoral unemployment insurance proposal.

Republican legislators in North Carolina are pushing an extreme package of cuts to unemployment insurance.

The Senate committee in charge of the issue, the Revenue Laws Study Committee, voted to move the proposal forward on Tuesday. It will come to the General Assembly for a vote when they reconvene on January 30.

The proposal cuts the weekly maximum benefit by 35 percent, (even though the statewide average benefit is much less). It also reduces the number of benefit to a sliding scale between 12 and 20 weeks, even though the average length of unemployment is at an all-time high of 40 weeks.

In total, unemployment benefits would be slashed by $600 to $700 million annually. The reduction in benefits would be permanent.

“No state has ever cut their maximum benefit so severely,” said George Wentworth, senior attorney at the National Employment Law Project. Bill Rowe of the N.C. Justice Center called it “one of the most radical, if not the most radical [unemployment] proposals in the country.”

Republican legislators say the cuts are needed to retire North Carolina’s $2.4 billion debt to the federal government. But if North Carolina employers paid unemployment taxes at roughly the national average, there would be no debt – and no need for cuts. Despite claims that the plan is “balanced,” the responsibility for paying down this debt falls almost completely on unemployed workers, the majority of whom lost their jobs through no fault of their own.

The real reason legislators are pushing this plan? They are doing the bidding of the N.C. Chamber of Commerce, the state arm of the national right-wing lobbying group. The Chamber cooked the plan up last year, and their political action committee donated to the campaigns of 17 out of the 20 members of the Revenue Laws Study Committee.

Chris Fitzsimon of NC Policy Watch was the hearing on Tuesday:

The most absurd moment of the public comment period came when the lobbyist for the N.C. Chamber of Commerce addressed the committee to praise the plan, a plan that he helped write in the backrooms over the last few weeks. Funny he didn’t mention the secret meetings in his remarks.

Not only The N.C. Justice Center writes:

Contrary to what has been said by some of our lawmakers, the proposed changes to our insurance system are dramatically out of line with our neighboring states, and would in fact move North Carolina toward the bottom of state rankings.

Here are more details of the proposal in question, via the News-Observer.

Stop the unemployment cuts – send a message now.

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As New Year Begins, North Carolina Republicans Considering Drastic Cuts to Unemployment Insurance

Take action now – tell the North Carolina legislators to keep unemployment benefits strong

Thankfully, earlier this week Congress fulfilled its (minimum) obligation to the long-term unemployed by passing an extension of federal unemployment benefits as part of the “fiscal cliff” deal.

But while that drama in Washington, D.C. comes to a close – for now – Republican legislators in North Carolina and their well-funded backers have a plan to drastically cut unemployment insurance for thousands of Tarheel families.

The proposal, first revealed in early December, would cut weekly benefit checks from $506 to $350. The benefit periods would be limited from 26 weeks to a sliding scale between 12 and 20 weeks. These changes constitute an overhaul of the state’s whole unemployment system:

“This is probably one of the most radical, if not the most radical, proposals in the country,” said Bill Rowe, advocacy director for the N.C. Justice Center, a Raleigh-based nonprofit.

The plan is similar to recommendations made by the North Carolina Chamber of Commerce, who, not at all coincidentally, contributed to the campaigns of 17 out of 20 members of the legislative committee that produced the plan, according to IndyWeek.

But regardless of why Republican legislators are proposing these cuts, that fact remains that they would be devastating to families in North Carolina, where the unemployment rate is already above the national average of 9.1 percent.

Even at the current 26 weeks, unemployment benefits aren’t nearly sufficient. As of November 2012, the average length of unemployment in the United States was 40 weeks, according to the Bureau of Labor Statistics. That’s the longest average unemployment length in the 60 years the BLS has been recording data.

And those statistics translate into real pain for families, even without the cuts Republicans are proposing. 1 in 10 children in North Carolina lived with a parent who was unemployed this past year. 118,000 children in the state lived with parents who were unemployed for six months or more.

Now is the time for jobs, not cuts:

MaryBe McMillan, secretary for the state chapter of AFL-CIO, says when the economy was booming in the late ’90s, employers got a tax break. “And now they want to rebuild the fund on the backs of workers,” she says. “I think that’s dead wrong.”

Unemployment benefits do not only provide crucial assistance to those most in need. They also constitute a stimulus to the local economy, as unemployed workers use the benefits as soon as they come in to pay bills, fill up their gas tanks, shop for groceries, and make the necessary purchases to keep themselves and their families afloat. Taking a chunk of that money away, as Republicans legislators are proposing, only serves to hurt North Carolina’s recovering economy.

Send a message to North Carolina legislators – tell them to drop this terrible plan and keep unemployment benefits strong.

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