NELP Reports: Healthy March Job Growth Buoys Optimism, But UI Rollbacks Threaten Recovery

NELP: National Employment Law ProjectThe economy added 216,000 jobs in March, according to employment figures released today by the Bureau of Labor Statistics. Despite the rise in employment overall, payrolls in the public sector continued to fall, this month by 14,000. The unemployment rate, at 8.8, was little changed.

While the steady addition of jobs over the past six months is welcome news, robust job growth must be sustained if we are to alleviate the nation’s continuing jobs crisis. As of the beginning of 2011, there were still five unemployed workers for every one job opening nationally. In some regions of the country, this ratio is significantly worse: in the Midwest, for instance, there were 5.7 jobless workers for every one opening. The absence of jobs for the overwhelming number of unemployed workers—currently at 13.5 million—has translated into an ongoing jobs deficit that continues to plague the nation’s labor force.

“Last month’s employment growth is definitely encouraging, though we have to remember that the job rebound must be much more aggressive and sustained to end the jobs crisis,” said Christine Owens, executive director of the National Employment Law Project. “Since the start of 2010, we’ve only recovered nearly 1.5 million of the 8.7 million jobs lost during the Great Recession. When we factor in the additional jobs needed to account for population growth during this period, we need over 11.1 million new jobs in order to return to pre-recession employment levels. Moreover, despite the gains, a number of unemployment indicators remain alarmingly high, and there are significant concerns about the quality of the jobs that have been added since growth resumed,” said Owens.

Of the 13.5 million unemployed, fully 45.5 percent, or 6.1 million people, are long-term unemployed who have been out of work for six or more months. Yet another 8.4 million are underemployed, meaning that they are working part time but would rather be working full time. Taken together with workers who are marginally attached to the labor force (i.e., those who are out of work and available to work, and have sought employment during the past year), the real unemployment rate stands at 15.7 percent.

With the unemployment crisis far from over, legislative developments such as that which occurred in Michigan earlier this week are all the more troubling and incomprehensible. State lawmakers there cut the maximum number of weeks available through the state’s unemployment insurance program to 20, making it the only state in the nation offering less than 26 weeks of benefits.

In signing the bill, Michigan Governor Rick Snyder suggested that cutting the 26-week duration to 20 weeks—which has been in place since 1954—was the only way the state could continue distributing federal Extended Benefits, which offer the long-term unemployed a final 20 weeks of coverage and are paid for by the federal government. The governor did not address why 11 other states, faced with the same situation this year, were able to adjust their laws to continue offering the federally financed Extended Benefits without needing to cut basic unemployment benefits.

“It is unfathomable that lawmakers in Michigan—a state that is currently grappling with a 10.4-percent unemployment rate, and which has the longest stretch of double-digit unemployment of any state in the nation, at 27 consecutive months—would decide to recklessly cut its unemployment insurance program when the recession is so far from over for Michigan’s working families,” stated Owens. “The deal Michigan lawmakers struck is a false trade-off: There is no reason why permanent cuts to the state’s program are needed to justify the ongoing distribution of a federally funded unemployment insurance extension.”

Unfortunately, other states that are struggling with high unemployment rates are considering the same radical proposals. A bill brought to the Arkansas governor’s desk this week shaves off one week of state benefits for workers. Lawmakers in Florida, the first to introduce such measures, are proposing cutting the maximum number of weeks from 26 to 20; as the state’s unemployment rate drops, so, too, would the number of weeks, to as few as 12. Several other proposals on the table in these states impose more restrictive eligibility requirements in efforts to shrink the pool of workers who can receive unemployment insurance. At the same time, lawmakers in Missouri this week are on the verge of cutting off current and future recipients from the federal Extended Benefits program by blocking a bill to continue the program.

“States have undeniable fiscal woes, but trying to restore their UI trust funds on the backs of jobless workers, who are hanging by a thread, is seriously wrong—and misguided. Cutting benefits when unemployment remains high and the job hole is deep not only threatens economic security for families sidelined by job loss, it also jeopardizes economic recovery overall,” said Owens. “As the economy slowly adds jobs, state legislators should complement this progress with sensible measures that help sustain consumer spending, which will keep businesses running and communities afloat. Gutting unemployment insurance at the very moment the recovery may be taking hold amounts to a dangerous U-turn that will hurt families struggling with unemployment and undermine a broader recovery that includes more robust job creation down the line.”

“No doubt, states will need to reform how their unemployment insurance trust funds are financed in order to eventually return to solvency, and there are some serious proposals out there already. But deep cuts targeted at our nation’s most vulnerable workers and their families—formerly middle-class Americans who are on the verge of falling into poverty and homelessness—are simply uncalled for, unnecessary, and ultimately counterproductive,” concluded Owens.


 

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