A Little Common Sense and Economic Literacy Required

The GOP filibuster of the bill to extend unemployment insurance benefits for “long term” unemployed people was broken by a 60-37 vote in the U.S. Senate [vote 2] with both Nevada Senators voting in favor of the cloture motion.  The bill will now move over to the House side where passage is less certain.

While Senator Heller (R-NV) is anxious for us to know that he’s “still a conservative,” [WaPo Fix] he’s also representing a state with a heavy 3.9% long term unemployment rate.  [BusinessInsider]

How They Voted – States with 3% or higher long term unemployment

Rhode Island  4.1%   Reed (D) Whitehouse (D) Yes

Nevada 3.9% Reid (D) Heller (R) Yes

New Jersey 3.9%  Booker (D) Menendez (D) Yes

Illinois 3.7% Durbin (D) Yes Kirk (R) No

California 3.7% Boxer (D) Feinstein (D) Yes

Mississippi 3.6% Cochran (R) Wicker (R) No

North Carolina 3.6% Hagan (D) Yes Burr (R) No

New York 3.5% Gillibrand (D) Schumer (D) Yes

Georgia 3.5% Chambliss (R) Isakson (R) No

Florida 3.3%  Nelson (D) Yes  Rubio (R) No

Michigan 3.3% Levin (D) Stabenow (D) Yes

Pennsylvania 3.0%  Casey (D) Yes  Toomey (R) No

South Carolina 3.0% Graham (R)  Scott (R) No

These “no” votes make no economic sense.   First, we ought to look at some of the statistics related to unemployment in this country.  The BLS report for November 2013 on characteristics of those unemployed show that of the 10,271,000 unemployed persons in the U.S. 5,400,000 were those who had been laid off or who had finished temporary jobs.   For some 4,448,000 these were not temporary lay offs.  3,329,000 were permanent job losses.  1,160,000 were those who had completed temporary jobs.

Secondly, we should look at where the jobs are increasing.  The last comprehensive report issued in November shows some pockets of economic activity which aren’t promising.  For example, in the health care and services category showed increases in most subcategories, approximately 4,000 nursing home care jobs were lost. [BLS]   While mining and logging showed general growth, support services for mining were down 3.1%.  The manufacturing sector slugged along, with significant employment up for motor vehicles and parts, up 6.7%.  Transportation equipment manufacturing was up 4.9%, and fabricated metal products related employment increased by 3.1%.

In the retail sector of the U.S. economy there was more mixed news.  Employment in electronics and appliance stores down 3.6%, in food an beverage stores down 5.4%, in health and personal care stores down 3.4% in a sector which showed an overall 22.3% increase Oct/Nov 2013.  [BLS]

The mixed news created the chart below, indicating that while employment levels were generally higher, this wasn’t necessarily good news for those who were among the long term unemployed (longer than 26 weeks.)

Duration Unemployment 2013Looking at some of the other labor data could indicate some of the employment sector weakness facing the long term unemployed.  Unemployment rates in the construction sector, while far better than in 2012, were still at 8.6% as of November 2013. [BLS]  The unemployment rate in the leisure and hospitality sector was still above the national average at 9%, and unemployment in the agricultural sector was at 9.7%.

Given a situation in which there hasn’t been enough job creation in significant sectors, and in which while employment has generally improved, there remain pockets of losses, and what we don’t want to create are more “discouraged workers.”

BLS Table A-16 puts paid to the conservative theme that the unemployed are sitting on the stoop swilling beverages of choice and “taking” a living from “hard working Americans.”

Discouraged Workers 2013The number of Americans “marginally attached” to the labor force declined from 2,505,000 in 2012 to 2,096,000 in 2013, meaning that there was a decrease in the number of persons “who want a job, have searched for work during the prior 12 months, and were available to take a job during the reference week, but had not looked for work in the past 4 weeks.”

There was also a decline in the “discouraged worker” category, from 979,000 in 2012 to 762,000 in November 2013.   Discouraged workers  are categorized as “those who did not actively look for work in the prior 4 weeks for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination.”  These people obviously didn’t drop into the infamous “other category” because those numbers also declined.

Others is a category which “Includes those who did not actively look for work in the prior 4 weeks for such reasons as school or family responsibilities, ill health, and transportation problems, as well as a number for whom reason for nonparticipation was not determined.”  Those numbers dropped from 1,526,000 to 1,334,000 between November 2012 and November 2013.   It’s truly hard to argue that people are willing to avoid work when even at a point at which there are three applicants for every single job available those who have only the most tenuous connection to the labor force are demonstrating a reduction in their numbers.

When the numbers of “marginal, discouraged, and ‘other'” workers are dropping people are obviously NOT willing to accept “dependency” on the government for their income.

If we are truly interested in improved economic growth then we’d be well advised to take both some long term and short term measures to develop it.

Short term activities should include extending unemployment insurance benefits so that people have the wherewithal to continue to seek work.  No one is giving away gasoline to get to job fairs and interviews.  Further, (once more will feeling) such benefits act as a automatic stabilizer for the economy, keeping spending levels from gyrating wildly in times of economic instability.  DB’s been on this topic at least since April 2011.

Long term investments in infrastructure rehabilitation and construction would go a long way toward providing employment to meet short term needs in the construction sector and long term necessities for economic activity.

However, there may be little hope that the 233 Republicans in the House of Representatives (112th Congress) will manage to throw off the shackles of ideology.  We know that Trickle Down Economics is a hoax.  We’ve had thirty years of it.  We know that tax cuts don’t “boost the economy;” had this been the case the Bush Administration would have been wildly successful.  We know that deregulation produced one amazing financial sector collapse. And, we can see from the BLS statistics that unemployed people are leeches on the body politic.

However, all this information and experience didn’t prevent 37 Republican members of the U.S. Senate from voting to sustain their filibuster of the bill to extend unemployment insurance benefits to the long term unemployed — including some from the states which could have definitely benefited from the legislation.

Common sense and a modicum of economic literacy are in order.

1 Comment

Filed under Heller, Politics, Reid

One response to “A Little Common Sense and Economic Literacy Required

  1. Actually, it’s NOT headed to the House. The vote today was a vote as to whether to bring the bill to the floor for debate/amendment …. with a vote on the resultant bill to come later. The Republicans in the Senate have some doozies for amendments to the bill that could make it damn near impossible to pass at all — one such amendment McConnell would like to put to a vote is to delay/defund the Affordable Care Act. I swear the Republicans currently in office all suffer from serious cases of Obsessive Compulsive Disorder … is that a requirement to serve in the Republican selection process?