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The Jobs-Killing, Unemployment-Insurance-Eliminating "JOBS Act"
May 12, 2011 - by Donny Shaw
One of the final acts of the last session of Congress was passing legislation to keep extended unemployment insurance benefits for the long-term unemployed available into 2012. Their reason for doing so was, of course, to ensure that the hardest-hit victims of the ’08 economic crisis would have some form of financial support while the jobs market remains weak. Well, the jobs market is still weak, but Republicans in the House are moving to scale back the extended unemployment insurance benefits with a new bill they are calling the “Jobs, Opportunity, Benefits, and Services Act of 2011,” or the “JOBS Act.”
The bill would turn the $32 billion that would be made available for unemployment insurance programs under current law into flexible block grants for states to spend in other ways. States could continue to use the money for unemployment insurance, but they would also have the option to reduce or eliminate the extended unemployment insurance program, which is financed by money loaned from the federal government, and instead use the federal money to pay back their debt obligations (PDF) to the federal unemployment trust funds. Some states with particularly high unemployment rates and particularly deep financial troubles, like Florida and Michigan, have already begun the process of scaling back benefits once the current federal law expires. You can be sure that if the JOBS Act becomes law they’ll take the opportunity to scale back almost immediately.
Without the JOBS Act, states would have to find other ways of paying back the funds. That would likely mean some form of tax increase. Under the JOBS Act states would be able to avoid putting this burden on corporations and individual taxpayers and instead put it on the unemployed who have been unable to find work through no fault of their own. From that angle, it can be seen as a sharp political move — limit the burden on the wealthy who have money and time to invest in political campaigns and shift it to the middle class and poor who don’t have as many resources to reward politicians.
What’s especially ironic about this bill, given its title, is that economic impact studies show, very clearly, that spending on unemployment insurance creates more jobs than just about any other investment a government can make. The liberal-leaning Economic Policy Institute explains:
The $40 billion in economic activity generated by the EUC and EB programs under current law would create around 322,000 jobs.
Spending on unemployment insurance programs gives the economy its biggest bang for the buck in terms of job creation because the GDP multiplier effect of unemployment compensation—which CBO estimates in a range from 0.7 to 1.9—is greater than any of the other possible uses under the proposed Act. Putting cash in the hands of unemployed workers generates more economic activity than any other option: it results in more consumption of goods and services produced by private-sector businesses, generating more economic activity by their suppliers and contractors.
But if the states choose not to spend the money on EUC and EB, some funding options will be better than others. For example, if a state uses its share of the $31 billion to pay down its debts to the federal UI trust funds, it will remove that amount of money from the economy, generate no new economic activity, and create no jobs at all. Likewise, if a state chooses to eliminate EUC and EB and instead deposit its share of the federal funds into its UI trust funds to improve their balance, the money will be removed from circulation and create no jobs at all.
The bill was passed out of the House Ways and Means Committee yesterday by a 20-14 vote and will likely hit the full House soon. Frustratingly, the House Ways and Means Committee does not published roll call details, so there’s no way to know for sure how individual members voted. But extrapolating from the committee membership and the vote total, it looks like the vote followed party lines very closely. That suggests that the bill doesn’t stand much of a chance in the Democratically-controlled Senate.
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Comments
Displaying 1-30 of 76 total comments.
I do not have a problem with the ‘scale back" of UE benefits. In the long run, states which are already in debt will benefit from the move. How? It removes the option to continue sitting on one’s ass and collecting money rather than formulating an activeplan of action rather than a passive one. the jobs market is still hurt in many regions of the country. There are, however, regions of the country which have plenty of opportunity. So, you may have to rethink how you have been geeting paid and move on to another state. Or maybe its time to learn something new ( so what if you are 50 plus years of age). The use of the funds in a different direction is the use of them in the original direction as they were used during the time of FDR: the revamping of our Railway system , Preservational Constuction of the “old landmarks” etc. Complaining is not going to help, but creative thinking will. Let every state discern & assess the state and condition of its flocks and herds accordingly.
I do not have a problem with the ‘scale back" of UE benefits. In the long run, states which are already in debt will benefit from the move. How? It removes the option to continue sitting on one’s arse and collecting money rather than formulating an active plan of action in place of a passive one. the jobs market is still hurt in many regions of the country. There are, however, regions of the country which have plenty of opportunity. So, you may have to rethink how you have been geeting paid and move on to another state. Or maybe its time to learn something new ( so what if you are 50 plus years of age). The use of the funds in a different direction is the use of them in the original direction as they were used during the time of FDR: the revamping of our Railway system , Preservational Constuction of the “old landmarks” etc. Complaining is not going to help, but creative thinking will. Let every state discern & assess the state and condition of its flocks and herds accordingly.
So….my taxes go up so my neighbors can get paid? Yeah, I don’t think that’s the direction I’d want to go.
If you’ve been out of work for 3, going on 4 years, something more than just your age is at play, and it’s time to take some personal responsibility for the situation.
How about the option of never taking the money from me in the first place?! There’s a lot more workers than unemployed, so if they hadn’t taken the money from the workers to begin with, wouldn’t more businesses have enjoyed more spending and higher economic activity? Why not give the money back to us instead of the unemployed?
I support scaling back unemployment benefits. However, I also support addressing the trade agreements that have caused millions of jobs to flee the USA. It takes more workers to manufacture products then it does to move them from a ship to store shelves. Getting manufacturing back in the USA is essential to reducing unemployment and balancing our budget.
You clowns (Bonhoffer & fakk2) crack me up. What don’t you two don’t seem to understand about todays job market is that there are (at least) 5 people for every available job? McDonalds much ballyhooed recent hiring gimmick of hiring 50,000 (something they do every spring) people turned out to be hiring 62,000 people. However…1 million people applied for those 62,000 jobs. If my math is correct, that’s about 19 applicants for every available job. Get it into your foolish heads…THE JOBS AIN’T THERE FOR THE UNEMPLOYED. We earned the right to collect unemployment benefits by working…period. Now scummy ’pubs are trying to slide another fast one into law under the name of “Jobs, Opportunity, Benefits, and Services Act of 2011,” or the “JOBS Act.”
Jobs have nothing to do with this deceitful bill. Robbing the unemployed does, EOS. Just another gift to corporate America
Spam Comment
Look legion, other than your blatant disrespect for anyone who doesn’t agree with you, here’s the facts: You earned nothing. There’s no “right” to living off someone else’s money. There’s no “right” to having someone else support you. And if there’s not a job available, then why not make a job? Oh yeah, I forgot, when we last talked it was said that taking a minimum wage job was closer to slave labor than anything else. And I’m sure with being out of work for 2+ years, any job you create would be at or less than minimum wage.
BTW, if it’s not your money to begin with, then who is robbing whom “Little John”?
Spam Comment
It is so unfortunate that working people cannot understand the plight of the UNEMPLOYED. (1) PEOPLE ENTITLED TO UNEMPLOYMENT WERE WORKING!! They kept their credit scores up, they are educated, they saved in their 401-Ks, they had job stability, etc. They contributed to our capitalistic society. Workers prepared for their rate of income by education and job stability. At 50+ should people work for a minimum wage ($8) that DOES NOT PAY for their basic needs and lose everything they acquired in their lifetime? Most are willing to take ANY job (when they can find one)? BUT employers are not willing to hire seasoned workers. Without social services (state funds) many would PERISH! Unemployment does not provide a lavish lifestyle!! American’s welfare should take priority!! It provides a life line in a society drowning in debt.
It is so unfortunate that working people cannot understand the plight of the UNEMPLOYED. (1) PEOPLE ENTITLED TO UNEMPLOYMENT WERE WORKING!! They kept their credit scores up, they are educated, they saved in their 401-Ks, they had job stability, etc. They contributed to our capitalistic society. Workers prepared for their rate of income by education and job stability. At 50+ should people work for a minimum wage ($8) that DOES NOT PAY for their basic needs and lose everything they acquired in their lifetime? Most are willing to take ANY job (when they can find one)… BUT employers are not willing to hire seasoned workers. Without social services (state funds) many would PERISH! Unemployment does not provide a lavish lifestyle!! American’s welfare should take priority!! It provides a life line in a society drowning in debt.
It’s easy for you to say “move to another state” and get “re-educated/re-skilled,” both of which cost PLENTY of money!!! It is unlikely for an unemployed person to have the funds to make the move happen. Also your life needs to be stabilized when you are going to school (and not in a state of flux). If employers will not hire seasoned workers (who have more health issues), why then, would older workers get good jobs down the road when they have gained new skills? Your ideas do not make sense and are not thought out.
It’s easy for you to say “move to another state” and get “re-educated/re-skilled,” both of which cost PLENTY of money!!! It is highly unlikely for an unemployed person to have the funds to make the move happen. Also your life needs to be stabilized when you are going to school (and not in a state of flux). If employers will not hire seasoned workers for whatever reasons and in part because they have more health issues, why then, would older workers get good jobs down the road when they have gained new skills? Your ideas do not make sense and are not thought out.
Spam Comment
Spam Comment
“wouldn’t more economic activity have been created if those 50 million had kept their money? Even more so, wouldn’t more charity have been created?”
No to both questions. Their is no shortage of investment money in an advanced capital economy. Pretty much all of the economic opportunities that have a net positive return have been taken, and through charity most of the economic opportunities that have small negative returns have also been taken.
The problems left over (unemployment, health care for the poor, etc) have a large negative return rate and are not within the capacity of the private investment to handle as private investment REQUIRES as positive return. Nor can charity handle the issue and charity can only handle situations of small negative return rates.
Without unemployment maintaining the buying power of those 6million people many many more of those in the 50 million would be joining the ranks of the unemployed.
I have a hard time believeing that American citizens have a hard time understanding that there are not enough jobs for their fellow American citizens so they bash them and degrade them. When in all reality its Washington that needs to be looked at closer. There is enough money. There is enough money for 3 wars, off shore relief (Why help off shore when you are too arrogant to help you own), there was 26 trillion stolen from us that we still don’t have back, corporate walfare, ponzi schemes, and black projects, and you are going to let millions upon millions, of decent people suffer? It’s disgusting and alot of people and politicians should be ashamed, but that would require a concious and some humanity.
Here’s what I’m thinking luminous, and maybe I’m wrong, but here’s what makes sense:
UI has to be first taken from a company. Becuase the majority of companies are small businesses, that means most UI is paid by companies with under 500 or 100 employees depending on the type of business it is. This means that someone, somewhere, is not receiving a bonus because of the extra tax (not all the important, but that’s how I see it relating). Once UI is taken from a company, it is given to someone who doesn’t work at the company. That person then spends it in his/her community.
My reasoning is that if it had never been taken from the companies, the buying power wouldn’t have been less, but actually greater, because FEWER people would need to rely on government services, which lowers the burden for all. And it’s possible the companies would’ve saved the money, or still laid off 1 or 2 people, but it’s also possible they would’ve spent it instead on keeping those 1 or 2 people.
I agree. People who have been out of work for 3 to 4 yrs are looking for work at a pay they use to have instead of looking at the reality of what they don’t have. I know someone who applied for jobs after jobs and did not get hired. Each job said your resume shows you are over qualified. We kept saying DUMB down your resume and finally that worked, but the job did not pay as much as the previous job nor was it as nice. BUT IT IS A JOB. If you try to find a job every day you sit on your rear end you would have one.
Spam Comment
You boys are ignorant THERE’S NO WORK . . . and the republican haven’t done shit to
create any either. And there not going too. So take your options and shove it, if I had you in front of me I’d slap the shit out of all of ya.
this job market sucks … that’s all there is to it. You can’t even work a minim wage job because of the price of gas.
Stuff it.
craines, your comment is a prime example of why people are willing to live off UI instead of working, even if all they can find is a minimum wage job: because “it’s not worth it”. I’m not willing to support the idea that a minimum wage job is below anyone who doesn’t have a job. Hopefully, Congress will not support your line of thinking either. It may be time to call my Representative again.
“People who have been out of work for 3 to 4 yrs are looking for work at a pay they use to have instead of looking at the reality of what they don’t have.”
Unemployment lasts 99 weeks, that is little under 2 years, those who have been unemployed for 3 to 4 years have long sense lost everything and become a drain on the economy. Second those 99 weeks are not available in all states, Only the States with the highest unemployment rates have this term(most places it only lasts for 58 weeks).
You can’t make house payments with a minimum wage job, the ex $25hour factory worker taking the Mcd’s job over unemployment is no different then simply declaring bankruptcy and losing everything( home, family, health insurance) and defaulting on all other obligations(student loans, credit cards, the vehicle necessary to do job searching etc).
That little extra “bonus” from the non-collection of UI taxes isn’t going to do anything for you when you have less customers and higher interest rates, to say nothing of the increased crime rate from desperate people who have nothing to lose, and the lost opportunity cost from the following restriction of credit due to increases in bankruptcy.
Spam Comment
Regarding: The Jobs-Killing, Unemployment-Insurance-Eliminating “JOBS Act”
May 12, 2011 – by Donny Shaw
Am I reading this correctly: if so, it’s REVERSE ROBINHOOD – steal from the poor, give to the rich — where are the REAL people trying to help society and the economy without a personal, self-profiteering agenda? @cnn, #cnn, #help_anybody
dianambowman,
how can the poor be stolen from if they don’t own the money to begin with?
Spam Comment
Good question, here’s how: Fees and Investments. I’m assuming you’re talking about higher interest rates for the defaulted borrower or variable rates on credit cards, and lines of credit, since someone locked into a non-variable APR cannot have their interest rate changed arbitrarily.
Only if you’re not willing or not able to live a VERY low lifestyle. Millions of people every day live on minimum wage. It is possible. Albeit, for a lot of people, that would not be ideal or a possibility for their specific situation.
Spam Comment
Should we forcefully take money from “Mom&Pop Company A” to pay “Mr. Non-Worker”, or should we replenish depleted funds, or maybe something great like grow job growth by giving block grants to developing businesses?