A Critical Economic Stimulus
Unless Congress and President Bush act quickly, more than one million Americans will soon run out of the Unemployment Insurance benefits they desperately need to survive in these perilous economic times.
The unemployment rate, already at its highest level in almost five years, seems certain to continue rising. So will the number of jobless workers who will lose their eligibility for the benefits that have kept them going while they looked for work. The number losing benefits should reach 800,000 by October, 1.1 million by year's end.
Man or woman. White or a minority. Blue-collar or white-collar. Well-educated or with less than a high school education. All groups have been hard hit.
Curing the many economic ills that have contributed to the workers' plight, and to the nation's other severe economic problems, is a very large order. But surely we can at least try to ease the suffering of those who've been denied the chance to earn a living because of economic developments beyond their control.
The vehicle for that is a bill now pending in Congress. It would extend unemployment compensation for those who've exhausted the 39 weeks of benefits - now averaging $285 a week -- that are provided by the government through state and federal taxes on employers.
The benefit payout period was raised in June from 26 weeks. But the steep and steady increase in unemployment since then to the current level of almost 6 percent or more than 9 million workers, has made further extension essential. The pending bill would extend the basic period by seven weeks, to 46. States with jobless rates of 6 percent or more would have the authority to extend benefits beyond that, for up to 52 weeks. Currently, that would include 13 states and the
Extension would not only give jobless workers and their families badly needed aid, but also would help boost the sagging economy by putting $1 billion to $2 billion a month into circulation almost immediately.
Boosting the economy was in fact a main reason for creation of the unemployment insurance system, during the Great Depression of the 1930s. For it puts money into the hands of people who must immediately spend it - for food, housing and other basic necessities.
Certainly the economy was noticeably helped during the recessions of the early 1990s when Congress extended the benefit payout period on five different occasions. Benefits also were extended with a positive effect during the recession of 2001. The latest extension, in June, had at least the apparent effect of helping ease recessionary pressures.
Congressional Democrats and their AFL-CIO allies hope to make extension a key part of an economic stimulus package that also would include an expanded food stamp program, and a public works program that would put jobless Americans to work building or repairing schools, roads, bridges and other essential facilities.
Although the main concern should be about the millions who can't find jobs, many of those who do manage to get work need help, too. They often can find only part-time jobs or have no choice but to take jobs paying less than their previous jobs and providing reduced fringe benefits. That, in turn, can put a strain on local governments, which might have to provide services, such as health care, that the workers' previous employers had financed.
But, of course, it is workers who remain jobless who suffer the most and who put the greatest burden on government. And it is they who most need help - and need it now.
Dick Meister is a San Francisco-based journalist who has covered labor and political issues for the past half-century. Contact him through his website, www.dickmeister.com.