Unemployment to re-employment: A victory for an economy built to last

Once again, I am compelled to quench the crybabies on the idiotic pretend-Left polluting the national conversation by freaking out about something President Obama did. This time, it's extending unemployment benefits. Yep, some are screeching mad at the President for extending unemployment benefits and reforming the program - because it allows for the highest number of weeks for unemployment benefits to eventually be reduced to 73 weeks from the current 99. Reading what's actually in the bill, though, has never been their forte.

Let's first get rid of the pure myth that the unemployment compensation portion of the bill hurts the long-term unemployed. The facts are almost entirely to the contrary. First of all, the bill the president signed into law does not reduce the extended period immediately. 99 weeks of benefits (92 weeks of federal plus 7 weeks of extension by some states) will still be available until May. The exact calendar is as follows:
The authorization of the Emergency Unemployment Compensation (EUC) program is extended through January 2, 2013 at:
  • Up to 89 or 99 weeks through May, depending on the state.
  • Up to 79 weeks through August.
  • Up to 73 weeks through December.
Keep in mind that this extended 99 week benefit was enacted in December of 2009, when the unemployment rate was 10%, and we were still losing jobs. Quite a different story from today's economic and jobs climate, which, while still leaves a lot to be done, is far better than the end of 2009. By June, when the first reduction in the period of time extended benefits would be available takes place, our economy is poised to get stronger along with the job market. The economy and the job market is also likely to improve for the rest of the year.

In other words, by all estimates, the president and the Democrats have protected extended benefits throughout the entire period of the greatest trial of this economy since the Great Depression. They are protecting it further through the middle of this year, and then reductions take place in steps, coming down to 73 weeks.

Still, there would be a legitimate argument of hurting the long term unemployed if the bill just signed by the president did not include reforms to help exactly those Americans. Through re-assessment and re-employment assistance programs - funded to the tune of $46 million, there is serious effort to turn our unemployment insurance system to a re-employment system. Under this law, the state employment offices will have funding to assess those collecting extended benefits, assist them with their job search by directing them to tailored opportunities that fit their experiences and skillsets, provide training services for marketable skills, and to conduct demonstration projects to help bring down the number of long term unemployed.

In addition to providing employment assistance and job training, the bill establishes a $30 million fund to encourage the long term unemployed set up their own small businesses, and provide assistance to them while they are doing so. Even if relatively few successfully do it, the benefits won't just be in taking those specific people off the unemployment rolls, but also adding more jobs to the economy when they are able to hire others.

Job training, self-employment help and being directed to opportunities tailored to their skills are major and substantial goods for the long term unemployed. Along with the current improving economic conditions, these services can prove invaluable to not just those who receive them but to society at large by actually re-employing the long term unemployed. The next step for Congress should be to pass a law prohibiting employers from discriminating against the long term unemployed, as the president has proposed.

There is one other crucial thing the bill does: it takes pro-active step to prevent unemployment rather than only providing benefits after the fact. It allows employers contemplating layoffs to participate in a program through which they would instead reduce the hours of some employees. If that happens, these employees would be able to collect pro-rated unemployment benefits for the hours of work they would lose. This is something the president proposed in his American Jobs Act in September. This is monumentally important for the worker and the economy for a few reasons:

  • It keeps the workers working. This means that keep their skills and knowledge up-to-date and industry specific.
  • It allows those employees to participate in employer or state sponsored (and state approved) skills training programs, further enhancing their skills or gaining knowledge or retraining in a different, useful skill.
  • It makes for losing a relatively small amount of earning amounting to a fraction of their actual lost hours, since they would be able to collect pro-rated unemployment benefits. The economic benefit of this provision have great implications - first, the employees do not have to go into deep debt or worse, be put out on the streets. They get to keep their homes. Second, as their incomes are affected far less than would be if they got laid off, consumer spending remains relatively unaffected. And we need growing consumer spending to continue to bring our economy out of the tailspin the GOP put it in.
This, by the way, is the key reason why the worldwide recession barely affected Germany. They have an unemployment compensation system that looks an awful lot like this. So their employers laid off fewer people, their people kept working, consuming, and their economy emerged one of the most prepared to deal with crisis.

Rather than weakening our unemployment insurance system, the reforms actually strengthen it. The reforms turns our unemployment system into a re-employment resource. It's now a social safety net with a hand up. It is now a system that will be crucial to rebuilding the American economy - an economy that must be, as President Obama says, built to last.


Like what you read? Chip in, keep us going.