People@Work: Scarier Prospects Post-Election for the Long-Term Unemployed
Still, as analysts are quick to point out, the economy needs to generate many more jobs before the U.S. can begin digging itself out of its employment hole. After shedding some 8 million jobs amid the Great Recession, employers need to add more than 200,000 new positions monthly to start making a dent in the nation's stubborn 9.6% unemployment rate -- and that's not likely to happen anytime soon.
As Friday's employment report noted, some 6.8 million Americans, or 42%, of jobless workers are considered long-term unemployed. That is, they've been without work for more than 27 weeks, just beyond the standard period for which those who've been laid off can claim unemployment benefits.
Meager Amounts but Still a Lifeline
With so many people unemployed, Congress has repeatedly acted to ensure that those who can't find work can at least continue to claim jobless benefits beyond the 26-week maximum by passing benefits extensions. As meager as they may be -- an average $293 a week -- the payments do provide a lifeline, allowing unemployed workers to at least feed themselves and their families and pay utilities, even if they can't pay rent or the mortgage.
Come the end of November, however, some 2 million of those jobless folks won't be able to rely even on that measly sum unless Congress acts once more. Nov. 30 is the deadline to file for federal unemployment benefits, and unless lawmakers act to extend the deadline, some 800,000 people will stop getting checks within four days, according to the National Employment Law Project, a nonprofit advocacy group.
Federal jobless payments, which kick in after the state-funded 26 weeks of benefits expire and last up to 73 weeks, have led to charges from some conservative lawmakers that extending benefits up to 99 weeks gives people little incentive to look for work and adds to the nation's ballooning deficit. That has prompted Republicans to block previous extensions, such as one that expired at the end of May.
President Obama has already weighed in, saying it's imperative that Congress act to extend benefits. "It is very important that we're not taking a whole bunch of money out of the system from people who are most likely to spend that money on goods, services, groceries, buying a new winter coat for the kids," the president said during Wednesday's post-election press conference.
A lapse in jobless benefits also poses a threat to retailers, most of whom rely on holiday sales for as much as 80% of their annual revenues. A cutback in consumer spending will result not only in fewer sales but reduced hours for the thousands of temporary workers employed during the holiday period.
Fewer dollars spent at the mall would only imperil the sputtering economy. Economic growth would be reduced by as much as 0.4 percentage points from December through February should the benefits end, economist Zack Pandl at Nomura Securities International told Bloomberg News.
Not a Good Time for Stoicism
Still, Tuesday's elections, which gave control of the House of Representatives back to Republicans, could further embolden conservative lawmakers' efforts to stymie an extension of benefits when Congress reconvenes Nov. 15, unless a way is found to pay for them.
For unemployed workers who'll have to endure such political gamesmanship, the GOP's stoicism couldn't come at a worse time. With winter looming, the coming days and weeks won't just be colder but also filled with growing uncertainty and fear at a time of when many Americans prefer to celebrate.