Unemployment Benefits Should Not Be Squeezed by Fed Belt Tightening
Congress is blowing off today's deadline to extend unemployment insurance to 2 million people. These are people who lost their jobs in the Great Recession and have been bringing home an average jobless benefit of $300 a week. They do not get pay checks, health insurance coverage, paid vacations, sick time, disability pay and/or life insurance. And they have no unions to speak for them.
And just yesterday, President Obama announced that he intends to freeze salaries for 2 million federal workers for the next two years. No raises, but they still get pay checks, health insurance coverage, paid vacations, sick time, disability pay and/or life insurance. The outcry from unions could be heard across the country. Me? Sorry, must have misplaced the crying towel.The differing reaction of the two groups of affected Americans -- federal workers with jobs and the long-term unemployed -- is that the workers have unions to protest what they see as the unfairness being bestowed on them and the unemployed, well, they have nobody.
Now, I get that the country can't keep hemorrhaging money to prop up the jobless. It also really can't continue creating jobs at the snail's pace it's been operating at and not expect the nation to implode.
The government needs to curtail its spending, says Obama, who estimates a $5 billion savings over the next two years from the salary freeze. Critics say it's a drop in the bucket of the $14 trillion deficit. Still, I kind of like the gesture.
"Small businesses and families are tightening their belts," Obama said in a White House press conference. "The government should, too." By the way, excluded from the federal raise freeze are members of Congress, their staffs, defense contractors, the military, postal workers and federal court judges and workers. I like that gesture less, and save for the military, what's wrong with skipping the mailman's raise, or the rest of the raises?
Of course, the salary freeze must be approved by Congress, the same body that has missed the deadline to extend benefits to the jobless three times. Hey, they had to go home for Thanksgiving, didn't they? And July 4th weekend, you didn't want them to miss that, did you? Bottom line: If the lame-duck Congress fails to act today, unemployment checks will stop flowing tomorrow. About 800,000 people will be affected immediately and about 2 million people by January.
The state hit the hardest will be California, where about 410,000 people face a cutoff, followed by New York, Pennsylvania, Texas and Illinois.
The National Employment Law Project, a group that studies jobless trends, says that unemployment benefits cover about 50% of an average family's living expenses. That average family spends about $1,400 a month on house, $530 a month on groceries and $640 a month on transportation.
As for the federal workers who are unhappy with the news that they won't be getting raises at the taxpayers' expense for two years, I feel compelled to point out that unemployment checks are taxable income. So in effect, those raises were being paid by the jobless. Isn't there something wrong with that picture anyway?