On March 8, the Bureau of Labor Statistics (BLS) released the February unemployment figures, and Congress passed an “economic stimulus” bill.
Newspaper headlines declared that the unemployment rate fell for the second straight month – from 5.8 percent in December to 5.6 percent in January and then to 5.5 percent in February. But the BLS was not declaring victory. “The unemployment rate was essentially unchanged” in February, it reported. The BLS attributed some of the slight gains to “special factors,” like the unusually warm weather that helped the construction industry.
We should be glad that, for now, the overall unemployment figures haven’t gotten any worse. But there is still plenty to worry about. Ask the workers at the 284 Kmart stores that are closing. Ask the students, who “face the worst job market for college graduates in nearly a decade,” according to The New York Times.
Manufacturing lost another 50,000 jobs in February, adding to the million-plus decline in the past year.
There was an increase in people working part-time despite their need for full-time work. This was balanced by a decline in hidden unemployment – people who want work but have given up looking for a job. There are 8.6 million workers in these two groups – enough to more than double the official unemployment rate!
There has been a small increase in state and local government employment. But, in the coming year, growing budget deficits will force layoffs, hiring freezes and early retirements. State and local governments will contribute to the unemployment problem, rather than to the solution.
The worst news is the increase in long-term unemployment. The number of people out of work for less than 15 weeks has been dropping (slightly) since December, but the number unemployed for more than six months is still increasing. This indicates that, while the pace of layoffs has slowed, it remains difficult or impossible to find a new job.
This is confirmed by a Center for Budget and Policy Priorities (CBPP) study showing that the 356,000 people exhausting benefits in January is the largest of any month on record. If we add figures for February, over 1.5 million have exhausted benefits since Sept. 11.
Of course, more than 60 percent of unemployed people never qualify for unemployment compensation in the first place. They have no benefits to exhaust.
The “economic stimulus” law just passed by Congress provides for a 13-week extension of unemployment benefits, at a 3-year cost of $14.4 billion. According to a CBPP study, it also provides eight times as much in business tax cuts ($116 billion). These tax cuts will cause state governments to lose $14.1 billion in tax revenue. Since state budgets are already in crisis, the result will be an average cut of 98 cents in state services for every dollar of additional unemployment benefits.
While it extends the duration of unemployment benefits, the new law does not increase benefit levels or expand eligibility. The AFL-CIO called it only a start, and calls for “comprehensive relief to laid-off workers and fiscally-strapped states.”
It took six months after Sept. 11, and huge bribes to business in the form of corporate tax cuts, to get this first step. The good news is that the Republicans were finally forced to take this first step. And they had to give up (for now) on additional income tax cuts for the rich, and on hundreds of billions in tax refunds to Enron, GE and IBM.
A real economic stimulus package would provide direct funding for jobs and emergency aid to prevent cutbacks at the state and local levels. It would provide for unemployment benefits at an adequate level for everyone who can’t find a job. And to pay the cost, it would close corporate tax loopholes and tax the rich!
How do we get there? For a start, we should work to defeat every congressperson who voted to hold unemployment benefits hostage to new corporate tax breaks!
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