Helping the Long-Term Unemployed

This past Thursday, a deal was reached by a bipartisan group of senators to renew federal unemployment benefits for those who are jobless long term. The deal would extend benefits through the end of May, and would also pay out retroactively. This would be a big help to those who came off the program at the end of December.

It is heartening to see members of Congress from both parties coming together to address an issue that has a real impact on millions of Americans. According to the March BLS (Bureau of Labor Statistics) report, the number of long-term unemployed now stands at 3.8 million people.

The deal itself is little more than a temporary band-aid. Extending this sort of help to those who are having a hard time getting re-employed for only the next two and a half months is the sort of deal that defines this Congress. And House Speaker John Boehner (R-OH) all but destroyed the deal’s chances of becoming law when he responded to questions about the agreement by saying it “can’t be implemented.”

Boehner has concerns about the feasibility of making retroactive payments. But his other concern, according to aides, is the lack of provisions that will actually help to create jobs.

This is a valid concern.

The Senate deal provides an extension of payments — but does very little in the way of actually helping to create jobs. The gist of the deal is figuring out how to pay for the approximately $10 billion price tag that accompanies a five-month extension. All that is done to actually help the jobless find employment is adding a provision that would require more “job training” for the long-term unemployed to keep receiving their benefits.

That is woefully inadequate.

Many experts from both sides of the political spectrum have long since pointed out that “job training,” while it has some importance, does not by itself help people find jobs. The real value of job training, Labor Economist Ross Eisenbrey of the (liberal) Economic Policy Institute told City Limits, is during a time “when you have a growing economy and you have labor shortages.” When that is the case, Eisenbrey, like many other economists, believes job training has value. However, he says, “If we get to the point where companies are laying off again, and employment is actually falling, on a macroeconomic level you can train all the people you want and it’s not going to really help very much.”

What is more concerning is the way the senators plan on raising the revenue required to fund the 10 billion dollar extension. As is par for the course, it is being sold as though a third party will be paying for it — with added fees on imported goods and altering the way corporations contribute to pensions. This might sound good, and have populist appeal. All it does, however, is make those goods and services provided by the companies who are made to pay more expensive for the consumer.

The right answer is an actual piece of legislation that would help create jobs. This is even truer if it would be beneficial for those least likely to gain re-employment from the ranks of the long-term unemployed.

According to a study by Professor Carl Van Horn, director of the John J. Heldrich Center for Workforce Development at Rutgers University, more than 30 percent of the long-term unemployed are above the age of 45. For them, it is much harder to find work than it is for the average person who has been out of work for a long time. The study points out that “[l]ong-term unemployed workers are also stigmatized by employers who assume that their skills have atrophied. Employers may conclude that a job applicant’s long-term unemployment indicates a characteristic that makes them less desirable employees, even when they have the same qualifications as job seekers who have never been unemployed.” These factors are only compounded when dealing with someone who is older.

Employers may think that it is more worthwhile to invest in a younger employee who can give them more years of production than to hire someone who may seem overqualified and closer to retirement. What the government can do is help level the playing field somewhat.

Republicans believe that everyone is overtaxed, while Democrats would love to add hiring quotas to solve these issues. A middle ground on this might be offering a tax break incentive for employers to encourage hiring long-term jobless.

Structuring the tax break in a way to benefit the older unemployed would also go a long way toward helping the over one million people who are over 50 and could not find work. And perhaps for those companies, they will find that hiring people with a more time” work ethic and responsibility may actually end up being in and of itself of great benefit to business.

This article appeared in print on page 10 of the March 18th, 2014 edition of Hamodia.