Democrats and Republicans in Congress have reached a national budget deal, which included a rollback on scheduled sequestration cuts. Unfortunately, however, this deal did not include an extension of emergency unemployment insurance benefits. Congressional Democrats backed away from that budget demand with the hope of pushing it in a separate measure. What that separate measure would be is unclear, and its likelihood of success is even murkier. As anyone currently receiving extended unemployment insurance knows, Emergency Unemployment Compensation benefits are slated to end by Jan. 1, 2014. No phase out, no gradual reduction, just kaboom -- that's it.
The implementation of federally funded extended unemployment insurance to deal with the fallout of the recession has been accompanied by a steady attack, primarily from conservative politicians and conservative-leaning economists. The latest salvo comes from Kentucky Senator Rand Paul, who was recently quoted as saying re-extending emergency unemployment insurance is a bad idea, ostensibly because it creates a disincentive to work. I wonder if Senator Paul said this to one of the estimated 160,275 long-term unemployed in New York City, what reaction he would get.
Get them off the dole, this argument goes, and they'll get off their butts. What these (mostly) guys are really saying, if you read closely between the lines -- because they won't say it outright -- is that extending unemployment insurance fosters laziness. Could this line of argument be any more insulting? Nope, but it was nevertheless effectively used to push large-scale welfare reform in the 1990s -- remember the racist perpetuation of the "welfare queen" image?
The long-term unemployed have more realistic things to worry about then being dis-incentivized to work, such as deterioration of skills, exhaustion of savings and/or retirement plans, and employment discrimination against the long-term jobless. Regarding the latter, earlier this year the City Council of New York recognized that employment discrimination against the long-term jobless was enough of a problem that it warranted legislative action.
Even as the nation's unemployment rate has come down to 7 percent, New York City's unemployment rate has barely budged from a much higher 9 percent -- at last count, the city's unemployment rate stood at 8.7 percent in October. This figure is not too far from where unemployment stood in the city not only a year ago, but two years ago.
Four and a half years after the end of the recession, the pre-recession days of 5 percent unemployment in the city seems a figment of our imagination and, what's worse, out of our reach. The last time Congress extended emergency unemployment insurance, the nation's unemployment rate was still over 8 percent, so now that it's down to 7 percent their impetus to act on another extension is dampened. But they are only seeing the forest, not the trees.
At a minimum, our national policy makers must recognize that the lower national unemployment rate is not equally distributed across the country -- there are still areas lagging behind in the recovery. New York City is one such area. While the number of unemployed in the U.S. is 50 percent higher than before the recession, the number of unemployed in New York City is still at nearly twice the level it was before the recession, driven in part by jobseekers coming to the city during the recession with the hope of finding better job prospects. What this instead resulted in was increased competition for work in an economy gaining back jobs lost, but not necessarily expanding.
Half of unemployed persons in the city have been unemployed long-term, defined as being jobless for more than six months. Currently, Latinos are the demographic group most impacted by long-term unemployment in New York City -- 58 percent of unemployed Latinos have been out of work more than six months.
Hopefully, whatever measure Congressional Democrats plan to take to get emergency unemployment insurance re-extended will recognize that long-term joblessness has not yet been conquered during this tepid recovery. The long-term unemployed may become discouraged -- understandable given the failure of their representatives to act effectively on their behalf -- but what they are not is lazy.