Has the Federal Government Given Up on Solving the Jobs Crisis?

Washington lawmakers act like the extension of emergency unemployment benefits is about gaining political advantage, with little thought to a broader plan to put millions of Americans back to work.

Philip McGonigle stands in line at a jobs fair, after meeting with potential employers on Jan. 17, 2013 in New York City. 
National Journal
Nancy Cook
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Nancy Cook
Jan. 8, 2014, 7:11 a.m.

Har­vey Hol­brooks, the hold­er of an M.B.A. with 20 years of ex­per­i­ence in the health care field, nev­er ima­gined he’d find him­self out of a job for this long.

Janu­ary marks the first an­niversary of get­ting laid off from his po­s­i­tion at a nurs­ing-home health care com­pany, where he man­aged doc­tors and med­ic­al staff. “I’m dev­ast­ated. I spent all of this money and time to get an edu­ca­tion only to find out that it has be­come worth­less to me,” the 53-year-old says from his Pennsylvania home. “You wake up and look for jobs. Then, do you everything again.”

Hol­brooks’s frus­tra­tion is not unique this week, as 1.3 mil­lion Amer­ic­ans face the ex­pir­a­tion of fed­er­al emer­gency un­em­ploy­ment be­ne­fits, which provided an av­er­age of $300 a week. Hol­brooks’s checks stopped on Dec. 28. Now, he’s scram­bling to bor­row money from fam­ily, con­sid­er­ing cut­ting off his In­ter­net ser­vice, and driv­ing less to save money on gas. “I’m mak­ing phone calls to beg and bor­row,” he says. He’d take any job. “I will work for $7 an hour, plus tips. I’m grate­ful and do­ing cartwheels if someone calls and just says come in for an in­ter­view.”

These per­son­al stor­ies can get lost as Wash­ing­ton law­makers wrangle for polit­ic­al ad­vant­age over a pro­posed three-month ex­ten­sion of un­em­ploy­ment be­ne­fits, a move that would cost the gov­ern­ment $6.5 bil­lion and faces long odds for pas­sage. What’s even more wor­ri­some to eco­nom­ists and un­em­ployed work­ers is how far the broad­er war on job­less­ness has slipped from the Wash­ing­ton agenda.

“Sadly, I ex­pec­ted this to hap­pen. For a lot of voters and policy makers, it is out of sight and out of mind,” says Gary Burt­less, a former Labor De­part­ment eco­nom­ist. “The un­em­ploy­ment situ­ation is not re­garded as a crisis. In­stead, we have moved onto oth­er things like the stock mar­ket rising or Bey­once selling a new al­bum.”

The un­em­ploy­ment crisis is quite alive, however, for the 4.1 mil­lion Amer­ic­ans who’ve been out of work for more than six months. They com­prise about 37 per­cent of un­em­ployed people. The sur­ging stock mar­ket and oth­er re­newed signs of health in the U.S. eco­nomy only serve as re­mind­ers that they are miss­ing out on the re­cov­ery.

While ex­tend­ing fed­er­al un­em­ploy­ment be­ne­fits would pre­vent many from be­com­ing des­ti­tute in the short term, it would not solve struc­tur­al eco­nom­ic prob­lems that have kept the un­em­ploy­ment rate close to 7 per­cent. It also would not ease the stigma of long-term un­em­ploy­ment, pre­vent dis­crim­in­a­tion for older work­ers, or of­fer re­train­ing for people whose skills fall short. Fight­ing those deep­er prob­lems re­quires solu­tions that are barely on the radar in Con­gress.

“We know what it would take. It would take more job cre­ation,” says Harry Holzer, a pro­fess­or of pub­lic policy at Geor­getown Uni­versity and former chief eco­nom­ist for the Labor De­part­ment. “Those are doable things if the polit­ic­al will is there.”

Some House Re­pub­lic­ans, like Speak­er John Boehner, have ex­pressed a will­ing­ness to pass an ex­ten­sion of the fed­er­al un­em­ploy­ment be­ne­fits, provided Con­gress can find a way to pay for them. What’s miss­ing is dis­cus­sion of cre­at­ing new jobs through in­fra­struc­ture pro­jects, re­viv­ing tax cred­its for busi­nesses to hire people who’ve been out of work, or part­ner­ing with com­munity col­leges to de­vel­op job train­ing for spe­cif­ic re­gions or sec­tors.

Be­hind closed doors, the Obama ad­min­is­tra­tion has been de­bat­ing ways that it could use ex­ec­ut­ive or­ders to help the long-term un­em­ployed by work­ing more closely with loc­al and state em­ploy­ment of­fices and ca­reer cen­ters, ac­cord­ing to a former ad­min­is­tra­tion of­fi­cial and Holzer, who has at­ten­ded a few brain­storm­ing ses­sions. The only prob­lem with this plan is that any real ef­forts, not at the mar­gins, would re­quire cash, and Con­gress con­trols the money.

At least one con­ser­vat­ive eco­nom­ist is call­ing for a dif­fer­ent set of pri­or­it­ies from both the GOP and Demo­crats. In­stead of ob­sess­ing about debt and health care, re­spect­ively, they should be ex­tend­ing un­em­ploy­ment be­ne­fits and giv­ing Amer­ic­ans money to move to states with more jobs. “The No. 1 policy con­cern should not be bring­ing 30 mil­lion more people in­to the private health care sys­tem or the debt 25 years from now. It should be help­ing the un­em­ployed,” says Mi­chael Strain, a res­id­ent schol­ar at the Amer­ic­an En­ter­prise In­sti­tute. “Con­ser­vat­ives are sup­posed to be people who cham­pi­on work.”

Both pro­gress­ives and con­ser­vat­ives should care about the mil­lions of people still out of work, Strain says, be­cause it will af­fect the eco­nomy over the next few dec­ades. People without jobs pay less in taxes. Worse, many of them may end up tak­ing ad­vant­age of gov­ern­ment be­ne­fits like So­cial Se­cur­ity or dis­ab­il­ity earli­er than they nor­mally would have.

These ab­stract ar­gu­ments do not help people like 58-year-old Bar­bara Har­mony of Ohio. Just hours after the Sen­ate voted Tues­day to con­sider a meas­ure to ex­tend the fed­er­al emer­gency un­em­ploy­ment be­ne­fits, Har­mony sat in her house and wondered how to get through the next few days. After years of work­ing for the state gov­ern­ment, own­ing her own small mail-or­der busi­ness, and work­ing in sales for a util­ity com­pany, Har­mony found her­self out of work. She’d lost her job in mid-April and her fed­er­al emer­gency un­em­ploy­ment be­ne­fits in late Decem­ber.

She starts to cry a little as she con­siders how she’s go­ing to pay her elec­tric bill this week, or her rent, due on Fri­day. “The elec­tric com­pany is call­ing me to dis­con­nect me,” she says over the phone, her voice crack­ing. “Hon­estly, I’m a very pos­it­ive per­son, but today it just hit me.”

Har­mony is wor­ried about drastic meas­ures that might be re­quired to find a job — like leav­ing be­hind her eld­erly par­ents in Ohio and mov­ing to an­oth­er state. She said she also might start her own con­sult­ing busi­ness to teach people how to open and man­age a small en­ter­prise, like she did for 19 years. She’s try­ing to stay up­beat.

But when asked if she thinks Wash­ing­ton is do­ing enough to help people like her, she chokes up again. “I’m try­ing to fol­low what Con­gress is do­ing, but they don’t work on the most im­port­ant things. They work on their own agenda,” she says. “They are not con­sid­er­ing where the Amer­ic­an people are right now.”

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