Sunday, June 13, 2010

Toying with a Life-Line for Millions-

Opinion-Cody Lyon

This past Thursday, a number of media outlets were reporting on a Labor Department report that said new weekly claims for unemployment fallen by 3,000 to a seasonally adjusted 456,000. Most of those same stories included details that total unemployment benefit rolls had fallen by 255,000 to 4.5 million.

The unemployment claims drop was called the 'largest decline in almost a year.' In its story, The Associated Press reported speculation that the decline could be because more people are finding work. But then again, it could simply mean that those individuals exhausted their initial state unemployment insurance benefits. The same report said that a Labor Department analyst said state agencies didn't provide any explanation for the drop.

The news helped send the stock market up around 273 points. Reports said traders were encouraged by the 2225,000 drop in total unemployment benefit total claims the week before.

But later that day Barron's Tiernan Ray reported how East Shore Partners exec Joan McCullough had written in a memo to clients that the big drop-off in unemployment roll benefits coincides with the May 22nd cut-off date set by Congress. She noted that's the point when recipients of regular or extended unemployment are no longer eligible to receive emergency unemployment compensation, if there state even offered it.

link to Barrons -

Barron's said, McCullough's conclusion is that 46% of the unemployed have just passed the threshold of no return. They've dropped off the edge, rather than simply finding jobs, as it might seem at first.

Add to that, just over a week ago the "The Center for American Progress" lamented the fact "there were 6.7 million long-term unemployed who now account for 46 percent of all unemployed job seekers. The think tank noted that because there are nearly six job seekers for every opening available and little net hiring, the chances of getting one of those (jobs) is indeed slim."

Of course, the hope is that some sort of recovery will chip away at that frustrating statistic and offer some nuggets of hope to jobseekers and for that matter, the overall economy. Americans are rightfully confused about the state of the economy and where its headed as each day seems to bring yet another jumbled and conflicting shard of data. But, one likely and sure fire conclusion is this; thousands of unemployed Americans probably will face many more months of frustration in the job hunt.

Right now, jobseekers-to-jobs ratio, which tells how hard positions are to get, remains around 5.6 to 1.

As things stand now, of the 15 million unemployed, over 7 million have been out of work for more than six months, nearly 5 million for a year and over 1 million for two years.

That leads back to the data from last week, and the way it got reported by a number of news organizations. Reading through the lines, some news stories read like desperate PR blitzes that were seeking to offer a bit of good news in a dismal situation. After all, psychology plays a role in all this.

Still, there were stories like the one from Barron's,that in essence challenged the intial market-moving Thursday stories and the way the data got framed. For instance, McCulough aargued 255,000 unemployed individuals have now dropped out of sight from Continuing Claims. According the article, she said "And the New York Times is touting this as a positive? "

It's worth wondering, where the questions that seek a solid explanation for that huge drop in unemployment benefit rolls? That particular statistic, as evidenced by that day's market shift, is the sort of indicator that has the potential to impact perception and move Wall Street.

But all this news of being stuck in the economic mud poses tougher questions and perhaps too, challenges American society to at least rethink and look more aggressively to what a future economy and workforce can and should be, long term. ,

But, for now, the Senate is debating another emergency unemployment benefits extension, part of H.R. 4213, and once again, there are holdouts in that governing body who say the weekly checks, a lifeline to millions, are to big a cost, in these days of growing national deficit. Others take a condescending view arguing, that the continuous unemployment extensions create America's own real version of the British term, being on the Dole, that they retard job hunt motivation.

But while the deficit looms large and very real on the horizon, it seems almost cruel that the Senate would even flirt with cutting off economic lifelines to so many Americans who, in most cases, arrived at this unfortunate state existence though no fault of their own. Besides that, the benefits are basically a form of stimulus since that money mostly gets pumped back through spending., etc.

And, unless you live in place where the cost of living has plummeted down a cliff, you would be hard pressed to find a laid off American worker satisfied and secure with the amount of money one gets to live on from unemployment insurance. In most cases, the weekly sums are a small portion of what the worker made while employed. For example, in New York State, the highest weekly payment is just over $400. Other states, offer max payments lower than that, a few others, slightly higher. Usually, they provide enough to get by, pay some bills, put food on the table. If it weren't for a current 65% subsidy for COBRA plan payments, which costs roughly the same amount as a month's unemployment benefits, the number of uninsured would have spiked even higher as well. But, that's another sad story.

A study on the effect of recessions on health by Economics Professor Christopher Ruhm, found that because unemployment insurance in the U.S. does not typically replace 50% of the income one received on the job, the unemployed often end up tapping welfare programs such as Food Stamps or accumulating debt.

The sad fact is that the high numbers of long term unemployed continues growing into a scourge in America. It not only decimates consumer power, it tears at less measurable indicators like the psychology of the nation infected by labor insecurity and a large pocket of hopelessness sense born out of the frustration of millions. The hope in all this, is that United States citizens will see immediate relief, but also demand greater investment in the future. There's never been a better moment to call upon the nation's best and brightest innovators, and begin rethinking the ways, places and rules by which we work, produce and buy.

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